[2][3][4] Tennessee sought and obtained waivers from the federal Health Care Financing Administration that allowed the state to conduct a five-year demonstration program.
[6] In its first year of operation, TennCare enrollment quickly grew, leading to concern that it would exceed the number for which the federal government would share cost.
[citation needed] After becoming governor in 2003, Phil Bredesen hired the consulting firm McKinsey & Company to evaluate the financial sustainability of TennCare and make recommendations for future actions.
A follow-up report in January 2004 identified options that ranged from returning to the original Medicaid program to setting limits on enrollment and benefits.
[9] In 2016, Deloitte Consulting was hired to finish the work, which was completed at a total cost of $400 million in 2019, when the new system was launched under the name TennCare Connect.
[9] In 2020, a class action lawsuit was filed on behalf of 35 adults and children in Tennessee, who alleged that they were illegally denied Medicaid and other benefits by the TennCare Connect system.
[10] In August 2024, US District Court Judge Waverly Crenshaw Jr. ruled in the plaintiffs' favor, finding that the algorithmic system built by Deloitte and other contractors failed to load appropriate data, assigned beneficiaries to the wrong households, and made incorrect eligibility determinations.