Sundquist's TennCare Plan
by Joe Sullivan
Gov. Don Sundquist's latest set of proposals for fixing TennCare try to walk a fine line between palliatives aimed at restoring its viability and clampdowns aimed at restoring its credibility with the public.
Whether he'll succeed on either count depends in large part on overcoming two obstacles that have stood in the way of overhauling the beleaguered program up to now.
One is getting approvals for his proposed remedies from the federal Health Care Financing Administration which has the final say because the program is in large part federally funded. TennCare's former director, Brian Lapps, quit in September after concluding that, "I don't believe TennCare can be fixed" because of HCVA resistance to previously proposed restrictions on eligibility and benefits under the program that provides health care coverage to 1.3 million Tennesseans.
The other is strengthening TennCare's administrative capabilities to verify the eligibility of enrollees and to curb abuses that are perceived by many of the program's critics to be rampant. Sundquist made such beefing up and cracking down a top priority in his state of the state address last February. But now it's 10 months later and his latest proposal includes an almost plaintive call to "Recruit and appoint highly competent individuals with significant management and managed care expertise to TennCare executive positions."
Sundquist said he believes much of the package will be "well received" by HCVA. And assuming that is so, it should go a long way toward forestalling the most imminent threat to TennCare's very existence: namely, the withdrawal of the managed care organizations that run the program on the state's behalf.
In a major step to allay their fears of being swamped by losses, Sundquist proposed to have the state take over responsibility for prescription drug benefits that now come out of the MCO's pockets. Although this would mean reductions in the state's monthly payments to MCOs per enrollee, state assumption of pharmacy benefits would absorb the risks of spiraling drug costs that had the largest MCO, Blue Cross/Blue Shield, on the verge of quitting the program with others almost sure to follow. Increased costs to the state are intended to be offset by a proposed limitation (to seven per month) in the presently unlimited number of prescriptions to which enrollees are entitled. But it remains to be seen whether the state can control drug costs any better than it has controlled eligibility for TennCare on the part of the 500,000 uninsured and uninsurable individuals who're on the rolls atop the 800,000 persons covered by a federal Medicaid mandate.
To his credit, Sundquist spurned demands for chopping off coverage to the 500,000 in the name of cutting the $1.3 billion state share of the program overall $4 billion annual cost. Going further, he rejected the notion that cost cutting was what his proposals are all about.
"We're going to try to 'fix' TennCare but it will not produce the savings some people expect. It will help us control the growth of the program in the future. But it is nonsense to believe that we can save hundreds of millions of dollars in the TennCare program and avoid the difficult choices required to balance our state's budget," Sundquist stated.
The most disappointing element of the governor's proposals was a renewal of a request to HCVA to allow the state to temporarily close enrollment to persons whose medical conditions make them otherwise uninsurable. While the state has undeniably been lax in verifying the eligibility of the 125,000 uninsurables already on the rolls, it has nobody but itself to blame for the laxity and has had plenty of time to put verification procedures in place. As Sundquist acknowledged, "It is important to recognize that most states have a program to offer some from of health insurance to people with catastrophic illnesses who are not eligible for Medicaid." Nonetheless, he insisted the state needed more time to strengthen its verification procedures for both existing and new enrollees before taking on any more.
Other prerequisites for reopening the enrollment window reveal the weaknesses that have jeopardized the entire program and possibly justify such a draconian step. These include: "Completion of the testing of our contingency plan to assure that we can continue services if an MCO fails or leaves the program unexpectedly" and, "Recruitment of new MCO's into the Tenn-Care program."
The shoring up process will be furthered by proposals to increase premiums charged to enrollees with incomes above 200 percent of the poverty line and to introduce co-payments for drugs and certain other benefits presently offered at no cost (to enrollees that is). These should help remove incentives for workers to get on TennCare rather than their employers" health insurance plans in order to save money.
Assuming HCVA approval, the reform plan should go a long way toward restoring the program's viability, or at least preventing a calamity. How far it goes toward restoring credibility with the public will depend on overcoming the mismanagement that has plagued the program up to now.
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