TennCare's end shocks few local reps

By Thomas Wilson
star staff
twilson@starhq.com

  A proposal made Wednesday morning by Gov. Phil Bredesen to dissolve the beleaguered TennCare program and return the state to the Medicaid program came as little to no surprise to Northeast Tennessee lawmakers.
  State Rep. Jerome Cochran said numerous lawsuits and consent decrees issued from federal court gave the governor few options.
  "It is the only viable option we had I think," said Cochran, R-Elizabethton, on Wednesday afternoon. "It was either do this or bankrupt the state."
  The governor's proposal will replace TennCare with a traditional Medicaid program similar to what's currently offered in more than 40 other states. The move would knock at least 430,000 people off TennCare's existing enrollment. The conversion from TennCare to a traditional Medicaid program would likely be completed by mid-2005.
  The governor kept a window of seven days open to work out an agreement with legal advocates who have won several court decisions about health care provisions for enrollees in the program.
  TennCare provides health care coverage for the poor, uninsured and disabled, covering 1.3 million Tennesseans, or about 22 percent of the state population. TennCare began in January 1994 as an experiment to expand Tennessee's Medicaid program by using managed care principles to deliver health care to a larger number of people for the same amount of money. Over the course of a decade, TennCare's costs have grown significantly where the program now consumes roughly one in three dollars in the state budget.
  "TennCare is a noble and worthwhile initiative that has made significant contributions to public health in Tennessee," Bredesen said. "Over the past year, we've made every possible effort to preserve the program. But persistent lawsuits have tied our hands.
  "It pains me to set this process in motion, but I won't let TennCare bankrupt our state."
  New fiscal projections indicate TennCare "as is" will require $650 million in additional state revenue in order to sustain it in the 2005-2006 fiscal year -- approximately $200 million more than the state anticipates collecting in total new revenue.
  The Tennessee Justice Center, a legal advocacy group that has won several legal cases to keep TennCare provisions in place, has not agreed to modify consent decrees.
  Bredesen said the Grier Consent Decree, which prohibits the state from placing limits on the use of prescription drugs, was a key factor driving the 26 percent annual growth in TennCare drug costs versus average growth of 17 percent in neighboring states' health care plans. Bredesen administration found the total cost of TennCare's pharmacy benefit in the wake of Grier ($2.11 billion) is greater than the cost of Tennessee's higher education system ($1.89 billion).
  "At this point, the process to return to Medicaid is not irreversible," Bredesen said in his announcement from Nashville Wednesday morning. "But TennCare reform cannot work unless we get the program out of the courts immediately. Nothing short of sweeping change in the consent decrees can save TennCare."
  Gordon Bonnyman, executive director of the Justice Center, sent Bredesen a letter earlier this week asking for an additional seven days to consider the request for wholesale modification of the decrees. Unless a modification agreement is reached within one week, Bredesen said, the transition to Medicaid will proceed.
  The Legislature overwhelming approved last session Bredesen's plan to overhaul the program, and it had been presented for approval from federal officials. The reform would have cut some benefits and required co-payments from some of the expansion population while slowing growth in costs.
  "I think what the governor is trying to do is send a message to advocacy groups that TennCare is not going to be sustainable in its present form," said Rep. David Davis on Wednesday. "If they are willing to work with him and the legislature, we can continue the program."
  Davis, R-Johnson City, said the Medicaid program would continue to provide health care to economically disadvantaged state residents and the very ill under the federal Medicare requirements. He also said that the present TennCare program would undergo reform regardless of whether or not program advocates relented on legal decrees.
  More than 15,000 Carter County residents are presently enrolled in the TennCare program, according to the most recent data from the state.
  Cochran said Bredesen's reform plan needed o have a chance to see how effective it would be. He said he hoped program advocacy groups would evaluate their options over the next seven days and help the state make the program "fiscally sound" for the future.
  "They need to evaluate what they are doing and judge whether they are really helping the people who need help with TennCare," he said.
  Mountain States Health Alliance (MSHA) vice president of marketing, Ed Herbert, said 20.5 percent of patients treated in the MSHA network are TennCare patients. He also said over 50 percent of patients treated at some of the network's emergency departments including Sycamore Shoals Hospital in Elizabethton are TennCare enrollees.
  He praised the efforts of Bredesen and former Gov. Don Sundquist who attempted to reform the program's expenditures and added the state appeared to have few alternatives to Wednesday's proposal.
  "We feel the governor has made valiant efforts to reform TennCare," Herbert said. "We believe he is left with little option."
  He said network hospitals received roughly 60 cents payment on every dollar of cost from TennCare patients. He noted, however, that if TennCare enrollees are dropped from the program hospitals will also face an influx of uninsured patients who have no way to pay for treatment.
  "That would put more burden on hospitals throughout the state," Herbert said. "Most people would not seek health care until absolutely necessary."