Federal Court Allows TennCare to Drop Ineligible Individuals; Tennessee Legislators Apply Pressure to BlueCross

Tennessee officials announced Feb. 9 that they have "taken a 'big step'" toward resolving a federal lawsuit that has "tied" TennCare, the state's Medicaid managed care program, "in knots," the Nashville Tennessean reports. During a news conference, Gov. Don Sundquist (R) announced that a U.S. District Court in Nashville approved an agreement that will lift a restraining order prohibiting the state from terminating TennCare coverage for those not eligible for services -- including state prison inmates, those who have moved out of state and residents with access to private insurance. The restraining order resulted from a three-year-old federal lawsuit that claimed TennCare "improperly dropped people from its programs" and left them "no way to appeal those decisions." While state officials declined to provide details or estimate the number of individuals affected by the agreement, Sundquist called the ruling "a significant first step to putting TennCare 'on the road to recovery.'" TennCare Director Mark Reynolds added, "This really is the first step in the right direction ... both in terms of trying to settle the lawsuits and also ... making sure people on TennCare really are folks that are eligible for the program" (Snyder, Nashville Tennessean, 2/10).

'Direct Attack' on BlueCross
Meanwhile, several bills introduced in the Tennessee Legislature that would "strong-arm" BlueCross into "changing its relationship" with the TennCare program have left company officials "fuming." The legislation, filed by state Sen. Roy Herron (D), would prevent BlueCross from covering state employees "as long as it is not an 'at risk' provider" in TennCare; increase the tax burden on BlueCross; expose BlueCross to liability for damages to enrollees if the insurer exits TennCare; and provide the governor and advocacy groups with the power to appoint members to BlueCross' board of directors. The bills "are an outrageous, direct attack on our company," BlueCross Vice President of Communications Ron Harr said, adding, "This is totally out of the blue, and we're offended by it." Herron said that the legislation "seeks to provide incentives for [BlueCross'] continuing to serve the public as they have in the past. I hope they'll understand the legislation is filed because a lot of us appreciate just how important they are to Tennessee." However, according to state Sen. Ward Crutchfield (D), the bills may die in the face of Sundquist's efforts to "men[d] fences" with BlueCross officials. "There are some ongoing conversations, they're not hostile anymore, they're working and talking," Crutchfield said, adding, "If BlueCross is real unhappy about them (the bills), there's a good chance the administration won't be happy either, and they won't go anywhere." BlueCross officials hope that the bills will "die quickly" in the Legislature, but they "aren't taking anything for granted." Harr said, "We think the bills are so outrageous they have little or no chance" (Fortune, Chattanooga Times & Free Press, 2/9).