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TennCare reserve largely obligated, director says only $190 million is unobligated
Summary
TennCare told the Insurance Committee that roughly $1.4 billion sits in the TennCare reserve but about $1.2 billion is already committed to shared-savings initiatives; the agency said only about $190 million is truly unobligated, equivalent to roughly four days of state-only operations.
TennCare Director Steven Smith told lawmakers that while the agency's public-facing reserve totals about $1.4 billion, most of that amount is already committed to shared-savings investments or other obligations. "When you look at those obligations or those shared savings dollars, it's about 86% of the total," Smith said.
Smith said truly unobligated funds amount to roughly $190,000,000, which he characterized as insufficient to serve as a long-term emergency fund: "that represents only 4 days of TennCare operations if we re looking at state funding only." He added that, including the federal match, that figure translates to about 11 days of operations.
Members pressed about past reversions to the state general fund; Smith said reversion and reserve transfers are handled at the Finance & Administration level and that multi-year shared-savings commitments are often spread across fiscal years. Lawmakers asked for further documentation on how shared-savings commitments are allocated and how much of year-to-year reversions are retained in reserve.
