The Tennessee House of Representatives has voted in favor a controversial plan to radically restructure the financing of the state's TennCare program.

The GOP-backed plan to seek a "block grant" for TennCare passed by a vote of 68-21 Thursday, but the measure's ultimate fate remains uncertain. Although Gov. Bill Lee has signaled his support, the bill has lagged in the state's senate. A Senate committee will take up the measure next week.

The bill, HB 1280/SB 1428, could make Tennessee the first and only state to fund its Medicaid program through an annual lump sum payment instead of funding that is tied to enrollment and state spending. Currently the state receives more than $7.5 billion annually from the federal government for the program.

Concerns about cuts to funding, services

Opponents fear that a block grant could come with unintended consequences for all Tennesseans, not only the 1.3 million low-income pregnant women, children, seniors and people with disabilities on TennCare. TennCare rules come with oversight and regulations that apply to nursing homes, neonatal intensive care units and other services accessed by those with private insurance.

A block grant comes with the uncertainty of how the state could cover costs that surpass the amount of funding given by the federal government, should health care or other costs rise.

A 2017 report by the Congressional Budget Office concluded that block grants "would result in less total reimbursement than would occur under current law" and lead states to cut payments to health care providers, eliminate some services or restrict rules for enrollment.

On Thursday, the bill's sponsor, Rep. Timothy Hill, R-Blountville, said the measure would "return tax dollars to our citizens, reduce the cost of compliance and serve more people with existing dollars."

If enacted, the measure would give Lee the authority to negotiate with federal officials for a block grant. Any final deal would have to be approved by lawmakers. The proposal is short on specifics by design, Hill said, giving flexibility to the governor to negotiate with the federal government.

Medicaid expansion effort fails

An effort by Rep. Mike Stewart, D-Nashville, to include in the bill authority for Lee to expand Medicaid in his negotiations with the federal government on any overhaul of TennCare easily failed.

Rep. G.A. Hardaway, D-Memphis, criticized the measure for failing to include any guarantees that existing or additional Tennesseans would be eligible for TennCare.

"Without that guarantee I can't support legislation that essentially is going to destroy what we have now and put those who are covered at risk for the unknown," he said.

Last month, more than 30 organizations signed onto a letter expressing opposition to the measure.

Reach Anita Wadhwani at awadhwani@tennessean.com; 615-259-8092 or on Twitter @AnitaWadhwani.

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