A plan that would make Tennessee the first state to receive its Medicaid funding via a block grant “must be carefully evaluated,” the executive director of the Tennessee Health Care Association / Tennessee Center for Assisted Living told McKnight’s Senior Living on Wednesday.

Under the proposal, announced Tuesday, the state would accept a lump sum of money, calculated based on projected costs, to cover all of its Medicaid expenses rather than accepting an amount equal to a percentage of healthcare costs for eligible beneficiaries.

The change for Tennessee’s Medicaid program, called TennCare, would need federal approval before it could become operational, and state officials plan to seek that in November, according to the Associated Press. President Trump, in his budget proposals, and Centers for Medicare & Medicaid Services Administrator Seema Verma previously have expressed support for the approach.

Jesse Samples, executive director of THCA / TNCAL, told McKnight’s Senior Living Wednesday that the organization was still evaluating the proposal.

“THCA / TNCAL’s position is that any alternative Medicaid proposal must provide and ensure sustainability for the state’s most vulnerable elderly population while preserving that population’s choice to have nursing facility services or assisted living services when they are needed and appropriate,” he said.

Some provisions in the plan “could lead to positive changes,” Samples said, citing a per capita spend, wage index adjustment and protection of dual eligibles.

“However, the waiver by its very nature requests an unprecedented exception from existing federal regulations, some of which are designed to protect both providers and beneficiaries alike from managed care practices that are detrimental to patient care,” he added. “We certainly believe that flexibility is needed in some areas, but it must be carefully evaluated in sufficient detail to show how providers and patients will continue to be adequately protected within the Medicaid program.”

Block grants present several challenges, according to Families USA. Chief among them, according to the organization, is that, should a state’s costs exceed the amount of the block grant, it would have to use its own funds to make up the difference or, more likely, cut services.

Representatives for LeadingAge and the American Health Care Association / National Center for Assisted Living on Wednesday said they did not have any comment on Tennessee’s plans. In the past, organizations representing providers have expressed concerns that major reductions in Medicaid funding to states could affect assisted living communities that provide home- and community-based services to their residents through Medicaid waivers. With limited resources, states could cut HCBS funding because it is not mandated, they have said.