Michigan Court Ruling in Medicaid Case May Aid TennCare in Dispute Over Children’s Services

Tennessee officials are monitoring a Michigan federal court ruling that could affect a separate decision issued by a Tennessee court in December ordering that state to shift 550,000 children enrolled in TennCare, the state's Medicaid managed care program, into a separate program, the Nashville Tennessean reports. Last March, U.S. District Court Judge Robert Cleland ruled that Medicaid benefits were part of a contract between Michigan and the federal government, and that Medicaid beneficiaries "have no right to enforce the contract in court" by suing over benefits. TennCare Director Mark Reynolds said that if the ruling stands, it could change the way that plaintiffs are allowed to sue states over Medicaid entitlements. It also could affect the December federal court ruling by U.S. District Court Judge John Nixon, who ordered the transfer of the child enrollees after finding that TennCare had failed to provide adequate early periodic screening, diagnosis and treatment services to them (Loggins, Nashville Tennessean, 1/11). Reynolds warned last week that Nixon's order could end the managed care aspect of the program, effectively ending TennCare's waiver and forcing the state to return to a traditional Medicaid program (Kaiser Daily Health Policy Report, 1/10). TennCare spokesperson Lola Potter said state officials were "moving forward" to comply with Nixon's order while "watching the Michigan case." But Gordon Bonnyman, a co-founder of the Tennessee Justice Center and one of the attorney's who filed the 1998 suit against TennCare that resulted in the ruling against the state, called the Michigan ruling an "aberration," adding, "There have been numerous rulings that explicitly said poor people can bring these kinds of lawsuits" (Loggins, Nashville Tennessean, 1/11).

Impossible to Provide Services
Meanwhile, former and current Tennessee officials now say it was "inevitable" that the state would violate a 1998 agreement to provide the health screening for children enrolled in TennCare. According to state Rep. Gene Caldwell (D), the state had "good intentions" in making the agreement, but there are not enough pediatricians in the state to provide the services. "If all pediatricians did nothing else, they still couldn't get them done," he said. If the court order does eventually force the state to remove children from TennCare, it would cause the program to "collapse" and put rural hospitals and patients at risk, Craig Becker, president of the Tennessee Hospital Association, said. He added that shifting from managed care to fee-for-service Medicaid would "force" hospitals to provide "millions of dollars" of charity care and that about 600,000 TennCare beneficiaries would lose their coverage. Becker said, "Patient are going to show up at our door, and we're going to take care of them. The question is, how are we going to get paid?" (Lewis, Nashville Tennessean, 1/11).

'Special Master' Nominated
In response to Nixon's court order, Tennessee officials and attorneys in the case last week suggested Nixon name former Tennessee Medicaid Director Manny Martins as "special master" in charge of directing the creation of a health plan for children currently enrolled in TennCare. Martins now oversees TennCare managed care organizations as the program's assistant commissioner of commerce and insurance. Both sides in the case said Martins "would be an ideal choice." Nixon has the option of naming Martins or selecting someone else (Wade, Memphis Commercial Appeal, 1/12).

TennCare 'Makes Sense,' Editorial Says
"Instead of dismantling" TennCare "brick by brick" and reverting to fee-for-service Medicaid, the state needs to "leverage" its purchasing power to cover more people through managed care, the Tennessean writes in an editorial. While the program "needs reform" and the state has "done a lousy job" of holding managed care organizations accountable, previous attempts to "purge" TennCare have been unsuccessful. The Tennessean writes that although the state "must look for savings," TennCare has been successful at keeping costs down while at the same time covering more people and providing "financial stability" to hospitals and clinics. "In the search in Tennessee's budget problems, TennCare, if properly administered, can still be one of the solutions," the editorial concludes (Nashville Tennessean, 1/11).