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TennCare director says $980M in shared savings are flexible and largely obligated
Summary
TennCare Director Steven Smith told the Finance, Ways, and Means Committee that TennCare 3 has produced nearly $1 billion in shared savings and that roughly $180 million has been spent to date while remaining funds are committed across multi-year initiatives, including Strong Families and long‑term care.
Steven Smith, TennCare director, told the Finance, Ways, and Means Committee on Oct. 30 that Tennessee’s waiver known as TennCare 3 has yielded nearly $1,000,000,000 in shared savings that the agency is deploying across multiple years.
"In just the three years of this waiver, we've achieved nearly $1,000,000,000 in shared savings that we can then reinvest back into the program," Smith said during his opening remarks. He described a multi-year sequencing of investments — year 1 focused on Strong Families, year 2 on rural and behavioral health, and year 3 on long‑term care — and said the state has flexibility to spread spending over time rather than being required to spend within a single fiscal year.
During questioning, Chairman Williams asked whether the savings carry forward if the waiver ends and whether rebasing could reduce the shared savings amount. Smith replied that the funds are claimed and included in TennCare's budget and "they will stay with us" if the waiver ends, while acknowledging negotiations with the Centers for Medicare & Medicaid Services (CMS) remain part of the rebase process.
Committee members pressed for specifics about how much of the $980 million has been spent. Smith said roughly $180,000,000 has been spent to date, while much of the remaining amount is obligated across future budgets. "We have a lot of flexibility with those dollars," Smith said, adding that the administration and the General Assembly committed to using the savings to benefit TennCare members.
The committee's discussion also touched on program outcomes the administration links to the shared savings, including expanded postpartum coverage and investments aimed at behavioral health and rural access. Smith framed the savings as evidence of TennCare’s improved fiscal management and emphasized the need for continued oversight and collaboration between the agency and the legislature.
Looking ahead, Smith said TennCare will seek to extend successful waiver provisions but cautioned that future federal negotiations and the scheduled rebase could alter future savings trajectories. The committee did not take formal action on the shared savings during the hearing; members requested follow-up materials on obligations and expenditure timing.
