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TACIR backs TennCare plan to draft an MCO contract addendum to allow school districts to seek Medicaid reimbursement
Summary
TACIR reviewed a draft report on a contract dispute that has prevented some Tennessee school districts from contracting directly with managed care organizations for TennCare school‑based services; staff said TennCare and an MCO have drafted an addendum to test with Knox County Schools.
TACIR staff presented a draft report Dec. 19 on school‑based health services and TennCare reimbursement prompted by a request from state lawmakers after a contract dispute kept at least one district from seeking direct reimbursement. The study responds to a request from Senator Lundberg, Representative White and Representative Cheryl and examines contractual arrangements between school districts and managed care organizations (MCOs).
Why it matters: Under Tennessee’s managed‑care model, school districts must contract with MCOs to be reimbursed directly for health services provided to TennCare‑enrolled students. Knox County Schools and Metro Nashville Public Schools have been advised by legal counsel not to sign MCO contracts as written, raising concerns about contract length, potential obligations to serve nonstudents and other liability exposures.
Staff summary and next steps: Dr. Matt Owen (presenter) said stakeholders generally agreed an addendum could address the districts’ concerns. TennCare has indicated it would work with the MCOs to develop such an addendum and test it with Knox County Schools; BlueCare has drafted an addendum and is conducting internal legal review with an anticipated sharing of the draft with Knox County Schools in early 2025. Any solution must be acceptable to all three MCOs and comply with federal and state rules and may require review by the Department of Commerce and Insurance.
Interstate comparison: The report includes a table summarizing how other states treat school‑based services; Dr. Owen noted Tennessee’s inclusion of school‑based services in managed care is relatively uncommon and that many states carve school services out of MCO arrangements so districts seek reimbursement directly from state Medicaid agencies.
Commission discussion: Commissioners asked staff to share the proposed addendum language with interested members as it becomes available. TACIR staff indicated the commission supports developing an addendum as a practicable pathway; the report contains a staff statement of support but not a formal regulatory change.
Ending: TACIR will continue to track negotiations and anticipated testing of the addendum and plans to return a final report at its next meeting.
