Medicaid Benefits in Tennessee

TennCare, the state of Tennessee's Medicaid program, is a demonstration program. This demonstration program is a test program to see if administration of Medicaid works under a managed care system. TennCare operates under a waiver from the Centers for Medicare and Medicaid Services through the U.S. Department of Health and Human Services (HHS) allowing managed care.

Demonstration Program

TennCare demonstrates that a Medicaid program can be organized by the state under managed care. By doing so, TennCare generates enough savings to allow coverage under Medicaid to persons who may not be eligible otherwise. Also, the quality of care is not compromised, according to the website. TennCare is the only managed care Medicaid program in the United States that encompassed the entire state in 2010. The oldest managed care Medicaid program in the US, TennCare began in January 1994 and was later re-approved by HHS as TennCare II in July 2002 extending through June 2010.

Managed Care Organizations

Services under TennCare fall under managed care entities throughout the state called Managed Care Organizations (MCO), according to the website TennCare participants choose their MCO from the area in which they live, unless qualified for TennCare Select. TennCare Select is designed for special enrollees such as Tennessee residents temporarily living out-of-state and children in state custody. Prescription drugs are covered under the Pharmacy Benefits Manager. Dental care for children under 21 is covered under the Dental Benefits Manager. The primary care provider of the Medicaid participant's MCO is responsible to coordinate care through the different entities.

Long Term Care

Commencing in the spring of 2010, long-term care services were incorporated into the TennCare managed care Medicaid program. Prior to 2010 long-term care services for the elderly and infirmed were provided by intermediate care facilities and nursing facilities, in addition to home and community-based services for those who would normally require long-term care. Funds for these services were on a fee-for-service basis, with the funds actually "carved out" of the TennCare program.


TennCare is administered by a state agency called The Bureau of TennCare and is part of the Tennessee Department of Finance and Administration. This bureau oversees contracts with the MCOs and is also responsible for paying Medicare premiums, deductibles and/or coinsurance for qualified low-income persons on Medicare.