This just in – as previously discussed, on January 4, 2021 CMS Administrator Seema Verma sent a letter (available here) to State Medicaid Directors requesting they sign a Letter of Agreement “as soon as possible” establishing new procedural rights for any future waiver withdrawals by CMS.

Acting CMS Administrator Elizabeth Richter on Friday February 12th sent a letter to states that had signed the Letter of Agreement (including Tennessee) advising them that CMS is now retracting these additional procedures, citing the need for CMS to maintain regulatory flexibility in light of the COVID-19 pandemic and resulting economic environment. Per the February 12th letter:

CMS needs to remain able to exercise its authority under the Act and implementing regulations to maintain continued oversight of demonstrations in order to ensure that they remain likely to achieve the statutory purposes. (see 42 U.S.C. 1315(d)(2)(E); 42 C.F.R. 431.420(d)(2)) Therefore, CMS is rescinding the January 4, 2021 letters, along with the specific provisions in the attachments to those letters, including those signed by states, and will not accept signed attachments from states based on those letters. Instead, CMS will adhere to the regulations and STCs, which generally provide that States will receive notice and an opportunity to request a hearing before a determination to suspend, modify, or withdraw a demonstration project becomes effective.

Notably this letter does not retract approval of the TennCare III waiver, although we suspect this is likely the next step and should occur shortly. Whether or not Tennessee will file suit in response remains to be seen. We will update more when we have additional information.