TennCare director: managed-care model, shared-savings have funded new services including rural and behavioral health investments

Summary

TennCare Director Steven Smith told the House Health Committee that managed care and the TennCare 3 shared-savings waiver have improved program stability, produced nearly $900 million in shared savings in the waiver’s first three years and funded targeted investments such as a diaper pilot, adult dental coverage and rural health grants.

TennCare Director Steven Smith told the House Health Committee on Feb. 1, 2025, that TennCare covers approximately 1.4 million Tennesseans, accounts for an $18 billion-plus budget and has used a managed-care model and a shared-savings waiver (TennCare 3) to finance new services and provider investments.

“TennCare is more successful today than at any point in our 30 year history,” Smith said, describing a multi-year shift from an “unpredictable and unsustainable” financing model to one that captures and reinvests federal shared savings. Smith said the TennCare 3 waiver produced more than $900 million in shared savings in its first three years and that the program has reinvested those funds in initiatives including adult dental coverage, elimination of waiting lists for some home- and community-based services, rural health investments and behavioral-health funding.

Under TennCare’s current structure, Smith said the program covers about 20% of the…

TennCare director: managed-care model, shared-savings have funded new services including rural and behavioral health investments

Summary

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