Tennessee Lawmakers ‘Fight’ Plan to Use Tobacco Settlement to Cover Budget Deficit

A group of state lawmakers have vowed to "fight to the death" any efforts to "plug" Tennessee's budget shortfall with funds from the state's share of the national tobacco settlement, the Nashville Tennessean reports. Tennessee expects to receive $4.5 billion from the tobacco settlement by 2025. Gov. Don Sundquist (R) favors using about $50 million of the $380 million already collected by the state to help alleviate the budget deficit, with the remainder of the money set aside in the "rainy day fund" to be used as a "financial buffer" for future spending plans. But legislators want to see the tobacco funds split evenly between anti-smoking efforts, such as youth education, smoking cessation and treatment programs, and educational and economic development programs for agriculture. Proponents of this plan cite rising tobacco use among teens as an indication that the state needs to finance public anti-smoking educational campaigns (Johnson, Nashville Tennessean, 6/7). Last week, lawmakers proposed using part of the tobacco settlement money to fund TennCare, the state's Medicaid managed care program, stating that the program covers the cost of medical care for beneficiaries with smoking-related illnesses (Kaiser Daily Health Policy Report, 6/1).

Hospital Sues Access MedPLUS
Cookeville Regional Hospital has brought a $35 million lawsuit against TennCare payer Access MedPLUS for "systematically fail[ing] to pay claims on time," the AP/Tennessean reports. The lawsuit, which was filed June 6 in federal court in Nashville, asks for $8.6 million in compensatory damages and $25.8 million in other damages. The lawsuit alleges that "[a]ll defendants either intentionally devised a scheme to deny valid claims, or in the alternative knowingly failed to properly train and supervise the defendant's employees and agents regarding the appropriate processing and payment of health care providers claims" (AP/Nashville Tennessean, 6/7). Access MedPLUS, the second-largest MCO in the TennCare program, in April settled a lawsuit over alleged nonpayment of claims with hospital group West Tennessee Healthcare (Kaiser Daily Health Policy Report, 5/10).

TennCare Odds & Ends
In other TennCare news, St. Thomas Hospital has announced it will drop out of Xantus Healthplan of Tennessee, the third-largest TennCare health plan, as of July 31, the Tennessean reports. Citing low reimbursement for its decision to leave Xantus, St. Thomas has signed up with a new TennCare plan, Universal Care (Snyder, Nashville Tennessean, 6/7). Meanwhile, Tennessee officials are holding meetings in 10 cities across the state during June and July to solicit public comment on "major changes" in TennCare that a commission proposed last fall. The recommendations include decreasing TennCare rolls by helping low-income people purchase private, employer-based health insurance coverage and creating a new insurance plan that would provide coverage to individuals who were previously uninsured or who had been denied private insurance because of a pre-existing health condition. Children and individuals who qualify for TennCare under Medicaid eligibility would not be affected by the changes (Snyder, Nashville Tennessean, 5/18).