Tennessee Officials Revise TennCare Reform Proposal in Response to Legislators’ Concerns

Officials for TennCare, Tennessee's Medicaid managed care program, have revised a proposal to reform the program to address concerns raised during legislative hearings last week, the Chattanooga Times & Free Press reports (Park, Chattanooga Times & Free Press, 12/18). Two state legislative committees -- the joint TennCare Oversight Committee and the Senate Finance Committee -- last week reviewed reforms proposed by Gov. Don Sundquist (R) (Kaiser Daily Health Policy Report, 12/14). Sundquist's controversial proposal, to be sent to federal officials as a modification of the existing TennCare waiver, would scale back the program to a managed care plan -- called TennCare Medicaid -- for Medicaid-eligible residents. Sundquist's plan also calls for the creation of TennCare Standard, which would offer benefits similar to those under a commercial managed care plan to the following groups: adults with no access to group insurance and with incomes below the poverty level; children in families with incomes below 200% of the poverty level and no access to group insurance; and medically eligible people with illnesses that make them uninsurable. The proposal also would create TennCare Assist, which would offer premium assistance to low-income workers to purchase private health insurance (Kaiser Daily Health Policy Report, 12/12). Lawmakers and health care advocates have said that the proposal would cause the state to lose federal matching funds because it calls for the removal of 164,000 current beneficiaries who do not qualify for Medicaid. The provision is expected to save the state $142 million per year in state tax dollars, but would reduce by $337 million per year the federal matching funds that the state receives. Proposal revisions made by TennCare officials include:

• Allowing individuals who do not qualify for Medicaid to enroll in TennCare during two enrollment periods each year, rather than one period. Critics have said that allowing only one enrollment period would prevent patients diagnosed with a "serious illness" from "getting life-saving treatment quickly."
• Reimbursing "federally qualified" and rural health centers that treat a large number of TennCare beneficiaries at 100% of the cost of treatment.
• Allocating $100 million to offset losses that result from treating TennCare beneficiaries at "qualifying hospitals."
• Increasing funds for graduate medical education programs from $48 million last year to $50 million.
• Covering the cost of weekend trauma care for TennCare beneficiaries who qualify for Medicaid.