TennCare Halts Plans to Increase Premiums, Introduce Copayments; Sundquist’s Budget Would Give Program a Funding Boost

Tennessee officials have called off plans to increase premiums and charge mandatory copayments for TennCare beneficiaries, a move that would have brought in more than $150 million for the program this year, the Memphis Commercial Appeal reports. Since November 1999, Tennessee has sought to increase premiums and introduce copays because of "legislative pressure" to make its Medicaid managed care program "more like private insurance." Acting on "verbal approval from federal regulators to go ahead with the action," TennCare officials sent letters explaining the higher premiums and copayments to more than 450,000 TennCare enrollees who are considered "uninsured or uninsurable members." HCFA then provided written approval for the copayments, but not the premium increase. "We've decided to hold off on the copays because we wanted to do both at the same time," TennCare spokesperson Lola Potter said. Copays for those who are not eligible for Medicaid in absence of the TennCare waiver with incomes below 200% of the federal poverty level, or an annual income of $34,100 for a family of four, would have ranged between $5 and $100, while copays for those with incomes above 200% of FPL would have ranged between $10 and $200. The Commercial Appeal does not report specific premium increases, but notes that the change would have brought in $50 million (Wade, Memphis Commercial Appeal, 2/20).

Sundquist's Budget Provides Extra TennCare Funding
Under Gov. Don Sundquist's (R) proposed budget for the fiscal year starting July 1, TennCare's budget would grow from $3.4 billion to $3.7 billion, according to Nashville Tennessean. Much of the increase would raise reimbursement rates for private managed care and behavioral health organizations and cover the 80,000 people expected to join TennCare next fiscal year. The governor also has proposed "major increases" in spending for long term care and community-based care for the elderly and disabled and for services to TennCare children in state custody. The total cost of program improvements would be $160 million (Snyder, Nashville Tennessean, 2/21).

Access MedPLUS 'Struggles' With Physician Networks
Meanwhile, TennCare's second-largest MCO, Access MedPLUS, has been struggling to "shore up a deteriorating network of medical specialists." MedSouth Healthcare, a group of 19 doctors and six clinics in rural West Tennessee, recently notified Access MedPLUS that it will only care for children and some pregnant women after March 31, "primarily because of the difficulty in referring patients for specialty care." Because of that decision, more than 3,000 adults will have to find new providers. To provide a "backup network of physicians," the MCO has hired Austin, Texas-based USA Managed Care Organization (Snyder, Nashville Tennessean, 2/17).

New MCO Seeks to Participate in TennCare
Although some MCOs might consider the TennCare market "less than attractive," a newly formed MCO, Universal Care of Tennessee Inc., is looking to "buck rocky times in the state's TennCare market and emerge a winner," the Nashville Business Journal reports. Last week, the affiliate of California-based Universal Care Inc. announced it had signed a provider agreement with TriStar Health Systems Inc., HCA-The Healthcare Co.'s regional network of 11 hospitals. Universal Care President and CEO Jay Davis said TennCare's situation is "a familiar one" for his company. "We saw the way the networks were delivered was a fairly fragmented approach. We're looking at ways to group primary and specialty care physicians together ... within a geographical area, rather than having the patient drive great distances to get services," Davis said. The company has a goal of enrolling 100,000 patients in the Middle Tennessee area (Cate, Nashville Business Journal, 2/19).