Tennessee Plans to File Waiver Request to Split Non-Medicaid Eligible TennCare Members Into Separate Program

Tennessee officials are planning to file a waiver request to divide TennCare, the state's Medicaid managed care program, into two pools, the Nashville Tennessean reports. Currently, the program covers in one pool 800,000 Medicaid-eligible enrollees and 583,000 others who cannot afford or are ineligible for private coverage. If approved, the waiver would split Medicaid-eligible members into one pool, which would operate under federal Medicaid rules. The other members would be placed in a second program, which would operate as a "traditional insurance program" and not as an entitlement, allowing the state to possibly cut benefits and charge higher premiums (de la Cruz/Cheek, Nashville Tennessean, 8/5). TennCare's current arrangement is based on a federal waiver that is set to expire at the end of 2001. With renewal "neither automatic nor guaranteed," Gov. Don Sudquist (R) convened a commission to determine how to change to program (Kaiser Daily Health Policy Report, 6/12). The planned waiver request is based on the commission's recommendations. TennCare chief John Tighe said, "The commission's recommendation and the administration's recommendation is we must put in a modification of this waiver that separates [the Medicaid and non-Medicaid] groups and treats one as an entitlement." The waiver request must be approved by the Centers for Medicare and Medicaid Services (formerly HCFA), which could take "several months" (Nashville Tennessean, 8/5).

The 'Money Pit'
Sundquist administration officials believe the program split will "save money" and reduce criticism from those who see TennCare as a "money pit for taxpayers' dollars," the AP/Memphis Commercial Appeal reports. Though TennCare enrollees are not all categorically eligible for Medicaid, recent court rulings have considered all program enrollees entitled to full benefits. A temporary restraining order issued in May 2000 prevented the state from removing people from the program, even if they were ineligible for coverage, and as the economy has slowed, enrollment figures have "jumped" by about 80,000 since Jan. 1 (AP/Memphis Commercial Appeal, 8/6). Despite criticism, Tighe noted the state pays only 15.6 cents of every dollar spent on non-Medicaid enrollees, with the federal government, premiums from members and insurers and drug company rebates accounting for the rest. He added that without the program, Tennessee hospitals would be forced to "absorb" about $663 million annually in unpaid care (Nashville Tennessean, 8/5).

Budget Cuts Impact Rehabilitation Care
In other Tennessee health news, the Nashville Tennessean reports that due to budget cuts made by the Tennessee General Assembly on July 12, up to 10,000 state residents with mental and physical disabilities may not get rehabilitation help this year. The General Assembly cut $639,000 in additional funding requested by the Department of Human Services when finalizing the state budget last month. Without those funds, the department will not receive matching funds from the federal government, which could have helped train disabled state residents to move into the work force. Now there remains "only enough" funding to train those classified as the "most significantly" disabled: those with physical or mental impairments that "seriously limit" two or more of their "functional capacities." Those classified as "significantly disabled" and "not significantly disabled" will not qualify for training assistance. "It's sort of like triage at a hospital. We're determining who needs the services the worst," DHS spokesperson Paul Ladd said. Federal law requires the DHS to continue serving those already enrolled in training programs. Because the state budget was vetoed by Gov. Don Sundquist (R), legislators are returning on Aug. 7 to consider a veto override, causing advocates for the disabled to air their concerns, the Tennessean reports. "I think we should have looked at [the rehabilitation request] before we looked at some of the other things that were in the budget, perhaps," state Rep. Mae Beavers (R) said (East, Nashville Tennessean, 8/3). For further information on state health policy in Tennessee, visit State Health Facts Online.