Tennessee Petitions Court to Place Access MedPLUS in Receivership, Liquidate Assets

The Tennessee Department of Commerce and Insurance has filed a court petition to put the insurer Access MedPLUS into receivership to liquidate its assets and repay creditors, the Nashville Tennessean reports (Snyder, Nashville Tennessean, 10/18). Filed Oct. 17 in Davidson County Chancery Court, the petition says that Access MedPlus' "financial condition justifies liquidation by demonstrating hazards to enrollees, providers and creditors without any recognizable ability to improve" (Park, Chattanooga Times & Free Press, 10/18). The petition also seeks an injunction to prevent the sale or transfer of company assets and destruction of company records (Nashville Tennessean, 10/18). The move comes one day after the state terminated Access' contract with TennCare, the state's Medicaid managed care program. A state audit of the health plan found that as of June 30, Access MedPLUS, which provides care for about 279,000 TennCare beneficiaries, had a $54 million negative net worth -- "well below" the $12.5 million the state requires for participating TennCare plans. Access MedPLUS has been under state supervision since May 2000 because of its failure to pay providers "accurately or on time." The contract will end on Oct. 31, and members will be transferred to other health plans (Kaiser Daily Health Policy Report, 10/17). At this time, Access' "total debts" are unknown (Chattanooga Times & Free Press, 10/18). If the health plan is placed in receivership, all lawsuits against it would be "put on hold" (Nashville Tennessean, 10/18). Impacted suits would include one filed last week by the Tennessee Medical Association alleging that Access MedPLUS had "attempted to excuse itself from paying just debts by unilaterally crediting [its] records" for amounts that company officials "assert were overpaid to providers" (Kaiser Daily Health Policy Report, 10/10). However, Marilyn Elam, a spokesperson for the Department of Commerce and Insurance, said that creditors "would still be able to pursue their claims through the liquidation" (Nashville Tennessean, 10/18). A hearing date for the petition has not been set.

Creditors' Response
While Access officials did not comment on the petition, health care providers "were happy" about the decision. Dewayne Belew, director of marketing at Bradley Memorial Hospital, said Access owes the facility an estimated $1.5 million. "That's a significant amount of money to us. We are anxious to see what the state and Access MedPLUS are willing to do to meet those obligations." The Times & Free Press reports the state will cover Access' "outstanding debts" from May 2000 to February 2001 (Chattanooga Times & Free Press, 10/18). Russ Miller, a spokesperson for TMA, said he "hopes the state honors" its pledge to "stand behind and back up" its TennCare plans. "If the physicians are defaulted on, the ripple effect could be devastating for health care for everybody," he said.

Possible Protests
Access is one of Nashville's largest minority-owned companies, and in response to the state's decision to terminate the insurer's TennCare contract, Rev. Enoch Fuzz of the Corinthian Missionary Baptist Church plans to organize a campaign "to stop racism and economic violence against blacks, poor whites and all economically oppressed people," the Tennessean reports. Such a campaign might include "selective" boycotts. State Rep. Larry Turner, chair of the legislature's Black Caucus, said he attempted to "intervene" on behalf of the company. "Even though I can't argue with the insolvency, I feel they have been treated different from many other (plans). Therefore, they were forced into the situation." Access officials have "complained" that were given "large numbers" of patients with expensive conditions and not reimbursed sufficiently. State officials, however, said they "bent over backwards" to help the plan. Elam said, "We petitioned the court months ago to put (Access MedPLUS) into rehabilitation. The company was able to convince the court that it was solvent." She added, "Legally we think we've done everything we could up to this point. This is the next step. One of the purposes of liquidation is to make sure all creditors are treated fairly" (Nashville Tennessean, 10/18). For further information on state health policy in Tennessee, visit State Health Facts Online.