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Notice of Change in Medicaid State Plan

The Commissioner of the Tennessee Department of Finance and Administration is providing official notification, pursuant to 42 CFR § 447.205, concerning intent to file an amendment to the Medicaid State Plan.  This amendment will be filed with the Centers for Medicare and Medicaid Services (CMS).

The subject of this amendment is a change in the rate at which ambulatory and long-term care pharmacies participating in the TennCare Pharmacy Network are reimbursed for dispensing brand-name drugs to TennCare enrollees.  Currently, the reimbursement rate for drugs and drug products authorized under the program is the least of five factors, one of which is the Average Wholesale Price (AWP) of the drug minus 13%, plus a dispensing fee.  Under the proposed amendment, this factor would remain the same for generic drugs but, for brand-name drugs, would change to AWP minus 15%, plus a dispensing fee.  This change is being made pursuant to the Tennessee Appropriations Act of 2014 (Public Chapter No. 919). 

The proposed effective date of the amendment is July 1, 2014.  For State Fiscal Year 2014-2015, the amendment will result in a reduction in aggregate annual expenditures of $15,600,000 in state and federal funds.

Copies of this notice will be available in each county office of the Tennessee Department of Health.  Written comments may be submitted by email to or may be mailed to Mr. Darin Gordon, Director, Bureau of TennCare, 310 Great Circle Road, Nashville, Tennessee 37243.  Persons wishing to review copies of written comments received may submit their requests to the same email and/or physical address.