Tennessee Health Care Innovation Initiative

Governor Haslam

“Over the next 5 years, the Tennessee Health Care Innovation Initiative will shift a majority of health care spending, both public and private away from fee for service to three outcomes based payment strategies…With these efforts, it's our hope that Tennessee will be at the forefront of a national trend that is expected to gain momentum in the coming years.”

-Governor Haslam's address to the National Governors Association, July 2014

Governor Haslam launched Tennessee's Health Care Innovation Initiative in February 2013 to change the way that health care is paid for in Tennessee. We want to move from paying for volume to paying for value. Our mission is to reward health care providers for the outcomes we want including, high quality and efficient treatment of medical conditions, and help maintaining people's health over time.

The Tennessee Health Care Innovation Initiative's three strategies - around primary care transformation, episodes of care, and long-term services and supports - are bringing together health care providers and clinicians, employers, major insurance companies, and patients and family members to reform the health care payment and delivery system in our state.

Tennessee is leading by example with our TennCare program and our state employees benefits administration, and we are asking other stakeholders to join us in statewide payment and delivery system reform.

Contact us at payment.reform@tn.gov for more information.

Three strategies

The Tennessee Health Care Innovation Initiative has three strategies –primary care transformation, episodes of care, and long-term services and supports.

  • Primary care transformation focuses on the role of the primary care provider in promoting the delivery of preventive services and managing chronic illnesses over time. The initiative is developing an aligned model for multi-payer Patient Centered Medical Homes (PCMH), Tennessee Health Links for TennCare members with Serious and Persistent Mental Illness, as well as, a shared care coordination tool that includes hospital and Emergency Department admission, discharge, and transfer alerts for attributed providers.
  • Episodes of care focus on the health care delivered in association with acute healthcare events such as a surgical procedure or an inpatient hospitalization. Episodes encompass care delivered by multiple providers in relation to a specific health care event. More information on episodes of care is available below.
  • The long-term services and supports (LTSS) component focuses on improving quality and shifting payment to outcomes-based measures for the QuILTSS program and for enhanced respiratory care.

In December 2014, Tennessee was awarded a $65 million State Innovation Models (SIM) grant from the Centers for Medicare and Medicaid Services. This grant award will further support the goal of the initiative: to make health care in Tennessee a value-based system focused on efficiency, quality of care, and the patient experience. The State submitted an application for the SIM testing grant in October 2014.