Committee advances bill asking TennCare to consider health-reimbursement option for Katie Beckett Part A families

The House Insurance Committee voted 14–0 to advance House Bill 1158, which would ask TennCare to pursue authority so that families enrolled in Katie Beckett Part A could access a health-reimbursement account to help pay for home- and community-based services.

Sponsor Chair Liddy Lin (Chairwoman Liddy Lin) told the committee the measure responds to family concerns that Katie Beckett Part A enrollees — the most medically fragile children served by the state program — do not always receive the same ease of access to home- and community-based services available to some families in Part B. "These families feel that they are not getting all that they need," the sponsor said.

The nut graf: TennCare officials said the apparent shortfall is driven by program design, existing utilization patterns and federal rules; they warned that a Part A-only HRA could raise equity issues across Medicaid and might require a federal waiver or other CMS approval.

Drew Staniewski, deputy director at TennCare, told the committee Katie Beckett Part A is budgeted at $25,000,000 for full capacity of 300 slots and that actual average annual Medicaid utilization for Part A enrollees is about $76,000 per member. "There is a misconception in the testimony that it is an allotment of $15,000 per year for that family to use, but that is actually not the case," Staniewski said. He described the $15,000 figure as a benefit limit for certain home-and-community services (HCBS), not a prepaid allotment.

Staniewski also said TennCare had moved $20,000,000 from Part A to Part B in recent years to expand Part B capacity because demand for Part B was higher; that transfer opened roughly 2,000 additional Part B slots without new state dollars, he said.

Katie Evans, TennCare’s director of long-term services and supports, described program checks on vendors, including a requirement for competitive bids (a minimum of three bids for home-modification projects) and MCO oversight. She said TennCare monitors claims and can remove vendors from networks or refer suspected fraud to program-integrity investigators. Evans noted HCBS project limits: a project cap of $6,000, a lifetime limit of $20,000 and a per-year cap of $10,000; TennCare said it has requested a CMS amendment to remove the project cap because rising materials costs have tightened access.

Advocates and family members told the committee they routinely face cumbersome MCO processes and difficulty securing needed equipment and services; committee members described specific cases brought to their offices, including contested DME (diaper) coverage and requests for portable oxygen devices.

On the bill’s equity concerns, Staniewski said providing an HRA to Part A members but not to similarly situated children elsewhere in Medicaid could raise fairness questions and could complicate federal approval. "If you do the HRA, no other Medicaid population is getting an HRA benefit," he said.

Committee members pressed TennCare officials on budget handling and reversion. Staniewski explained the agency’s approach: earlier conservative budgeting (the program was initially budgeted at $150,000 per member), observed per-member costs below that expectation, and reallocations within the Katie Beckett budget to meet demand in Part B. Several members urged TennCare to work directly with families to resolve urgent equipment issues and vendor disputes.

After questions, the committee voted to advance HB 1158 to Finance, Ways and Means (clerk recorded 14 ayes, 0 nays). TennCare told the committee that implementing a Part A-only HRA would likely require federal review and that fiscal and equity implications would need further study.

The committee also heard staff contact details from TennCare and was told the agency maintains member advisory groups and technical advisory groups to collect feedback from families and advocates.