Performance Audit of Selected Programs and Activities of the Division of TennCare

Observation 1: Division management should continue educating stakeholders on TennCare III shared savings initiatives and related programs; the division has drawn down over $630 million in shared savings in the first two years of the TennCare III waiver (approximately $331 million in year 1 and $303 million in year 2). The diaper program for TennCare children under age two is described as a pilot without a recurring budget allocation.

Observation 3: The division’s information systems cybersecurity controls were reviewed with no findings; however, risks and planning remain for the MMIS modernization project, including Project Iris planning costs (~$105 million by March 15, 2024) and a target go-live of January 2027; ongoing risk management and CMS collaboration are required to ensure compliance and user needs.

Observation 4: Repeat finding from Single Audit 2023-023 – CoverKids eligibility process deficiencies resulted in $31,499 in federal and state questioned costs; corrective action plans are required and will be monitored by the federal awarding agency; prior audit finding related to episodes of care strategy for payment reform was resolved.

Observation 2: The division and the TennCare Connect call center worked together to implement the comprehensive 12-month unwinding renewal process to ensure timely member renewals, maintain health care coverage, and prevent unnecessary terminations; renewals were initiated for about 1.5 million of 1.7 million members; call center staffing and volume increased during the unwinding; delays affected about 2% of HCBS members during the transition, with reimbursements issued and contract changes implemented to mitigate future risks.

Emerging Issue: Behavioral health provider network adequacy amid rising demand, with national and state data showing gaps in active provider capacity and several counties with low provider ratios; the division has invested heavily in behavioral health providers but faces ongoing challenges in maintaining an adequate, accessible network and addressing inactive providers.

Continue to provide transparency and accountability to the General Assembly and the public regarding shared savings and future TennCare III initiatives.

Monitor and document the unwinding renewal process; provide the overall unwinding results to stakeholders, including the public and the General Assembly, and continuously improve call center wait times and outreach materials.

Continue identifying risks and monitoring the MMIS modernization project to ensure the new system meets user needs and complies with CMS requirements; maintain collaboration with CMS and vendors during design, development, and implementation phases with go-live targeted for January 2027.

Assess and strengthen the behavioral health provider network to address growing needs; monitor network accessibility standards, reduce inactive providers, and proactively expand the network across rural and urban counties.

Mitigate transition risks in HCBS by ensuring data sharing between FEAs, maintaining records for 10 years, monitoring the Electronic Visit Verification system, and providing data dashboards to stakeholders; address delays experienced during the 2023 FEA transition and apply contractual changes to prevent recurrence.

Develop corrective action plans for CoverKids eligibility deficiencies identified in the 2023 Single Audit (finding 2023-023) and submit to the federal awarding agency; implement corrective actions and provide updates to CMS; ensure full corrective action is achieved.