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Pallone and Wyden Urge Inspector General to Vigorously Scrutinize Tennessee’s Illegal Medicaid Block Grant Request

Jan 14, 2020
Press Release
Tennessee’s request would illegally alter Medicaid’s basic financing structure, violating the plain language of the statute and clear Congressional intent

House Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Senate Finance Ranking Member Ron Wyden (D-OR) sent a letter to the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) today requesting assistance in conducting robust oversight of Tennessee’s pending request to block grant its Medicaid program, which would illegally alter Medicaid’s basic financing structure violating the plain language of the statute and clear Congressional intent.

“As the Office of Inspector General is the independent watchdog responsible for overseeing HHS, we urge you to closely monitor the Center for Medicare & Medicaid Services’ (CMS) approach to this waiver and others like it to ensure that Medicaid funds are used for their statutory purpose of furnishing medical assistance to low-income individuals,” Pallone and Wyden wrote.

Tennessee’s waiver request would cap the amount of federal funding the state receives to provide care for Medicaid beneficiaries.  It also creates a financial incentive for the state to cut coverage benefits for consumers by allowing the state to keep half of any unspent block grant funding.

“This creates a financial incentive for the state to under-invest in health care for its Medicaid population, while simultaneously allowing the state to repurpose federal Medicaid funds for non-Medicaid purposes with no apparent federal oversight or accountability,” Pallone and Wyden continued.  

In their letter, the Democratic Committee leaders note that such an arrangement would violate existing statute and that CMS does not have the legal authority to approve such a waiver request.  However, if the Trump Administration decides to ignore the plain language of the statue and approve the waiver, the Committee leaders urge OIG to exercise vigorous oversight of the Tennessee Medicaid program.  

“We strongly encourage you to exercise vigorous oversight of this and other Medicaid waiver requests that if approved would provide states vast sums of federal dollars with no accountability,” Pallone and Wyden continued.  “We also request a briefing for our staffs on your current work plan to oversee state 1115 waivers for program integrity vulnerabilities.” 

Read the letter HERE.

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