TennCare director details FY‑25 budget, shared‑savings investments and rising pharmacy costs to Health and Welfare Committee

TennCare Director Steven Smith and senior agency officials presented the agency’s FY‑25 budget to the Senate Health and Welfare Committee and described how funds from the TennCare 3 waiver’s shared savings would be used to expand long‑term care services, stabilize workforce shortages and address other program needs.

Smith said the TennCare 3 waiver has produced nearly $1 billion in shared savings in its first three years, money the agency is using for a mix of nonrecurring and targeted recurring investments. The agency has proposed using $100 million of year‑three shared savings for hurricane relief to impacted communities and proposed allocating $240 million toward long‑term care initiatives, including enrollment growth for Choices program participants and improvements in home‑and‑community‑based services (HCBS).

As part of the FY‑25 request, TennCare proposed additional capacity for the Choices program — including funding to serve an additional 2,000 people in Choices 3, which supports adults with physical disabilities and seniors at risk of institutionalization — and…