TennCare: Tennessee's answer to runaway Medicaid costs

TennCare was implemented in Tennessee on January 1, 1994, as the state's replacement program for Medicaid. Created through a demonstration waiver under Section 1115(a) of the Social Security Act, TennCare is unlike any other state Medicaid program in the nation because it includes coverage of uninsured and uninsurable Tennesseans. By contracting with managed care organizations (MCOs) to administer the Medicaid benefit package to TennCare enrollees, the state virtually privatized the program and dramatically shifted the state's responsibility from one of total administration to an oversight function only. Amid provider lawsuits, MCO contract controversy, and general chaos surrounding the new program, the implementation of TennCare created one of the most significant health care events in the state's history. This article provides an overview of the TennCare program and its impact on enrollees, providers, and the state budget.