Tennessee Code Title 71. Welfare § 71-3-1108

(a) The department may administer the program directly or contract with insurance companies, managed care plans or other entities to provide services to enrollees. Payments for services to contracted entities may require the contractor to assume full or partial risk for the cost of services provided under the contract.

(b) The department may contract directly with health care providers to provide services to enrollees and establish appropriate rates of payments for services.

(c) The department may enter into contracts or interagency agreements with an outside entity or other state agency to assist in the administration of the program, including performing eligibility determinations and appeals.

(d) The department shall establish periodic reporting requirements and audit requirements for contractors. Contractors and subcontractors shall maintain complete and detailed records as specified by the department regarding the operation of the plan, and shall provide the department and the comptroller of the treasury's office with access to records under the terms defined by the department.