TennCare Changes Take Effect Next Week; Beneficiaries Permitted to Switch Plans

Some of the changes planned under the "biggest revamp of TennCare," since Tennessee's Medicaid managed care program began seven years ago, will take place next week as more than 250,000 Tennesseans will switch their health plans, the Chattanooga Times & Free Press reports. Overall program changes were "designed to broaden ... options" for TennCare beneficiaries, as well as to "help ensure [the program's] survival," the Times & Free Press reports. Under the changes, the state is "carving up the TennCare markets into Tennessee's three grand divisions and restricting any [MCO] from covering more than 300,000 Tennesseans." The state also intends to boost payments to all participating health plans by 4.1% and will require many uninsured or "uninsurable" individuals "not poor enough to be on Medicaid" to pay higher premiums. In addition, for the first time in more than three years, TennCare beneficiaries were given the opportunity in April to change health plans. Beginning July 1, Universal Care of Tennessee and Better Health Plans Inc. will join TennCare in Middle and West Tennessee, while BlueCross BlueShield of Tennessee will phase out most of its coverage in Middle and West Tennessee. BlueCross had "threatened" to exit TennCare altogether, but will instead reduce its patient load, serving as a TennCare MCO in East Tennessee and administer a new TennCare Select plan that covers children with special needs throughout the state. The Times & Free Press reports that BlueCross probably will lose about $500 million in annual TennCare payments under its "more limited ... role." BlueCross Vice President Ron Harr said, "Frankly, we're glad to see other players come into the program and for us not to have half of the TennCare market any longer. We have been planning for these changes for some time, so even though this will reduce our caseloads considerably, we are not planning any major layoffs as of July 1." Access MedPlus, another TennCare plan, is "evaluating its options," according to President Glen Watson. He said, "We are looking closely to see if we really need and want to be a statewide group. It may be that we determine there are parts of the state where we shouldn't be. Our margins are very thin and right now we have not made those determinations. We're going to do what it takes for our company to remain viable" (Flessner, Chattanooga Times & Free Press, 6/25). The state had wanted to place Access MedPlus into state receivership, saying the insurer had repeatedly failed to pay providers and had a "negative net worth," which placed it in violation of state law. However, Davidson County Chancellor Irvin Kilcrease threw out the request because he said that Commissioner of Commerce and Insurance Anne Pope failed to adequately justify the financial necessity of such a move (Kaiser Daily Health Policy Report, 2/15).