Federal Judge Rules Tennessee Not Required to Use Tobacco Funds On TennCare

A federal judge ruled March 27 that Tennessee is not required to use more than $100 million of its tobacco settlement funds to pay for smoking-related injuries through TennCare and was within its rights to use the additional money to balance the state budget, the AP/Nashville Tennessean reports. The decision stems from a lawsuit filed by two members of TennCare, the state's Medicaid managed care program. The suit claimed that the program was required to compensate the members for tobacco-related medical expenses before lawmakers could appropriate tobacco settlement funds for other budgetary purposes. While the state had originally planned to split tobacco funds between health programs and subsidies for tobacco farmers, lawmakers instead used $560 million -- four years' worth of payments from the settlement -- to balance the 2001-2002 budget. The lawsuit argued that such a move would cause "irreparable harm" to the patients and sought a preliminary injunction to force the state to deposit the tobacco funds into an escrow account until the lawsuit was settled. Ruling on the preliminary injunction request, U.S. District Judge Aleta Trauger said, "The state and the public ... would be harmed if the state is denied the use of the funds." She added that beneficiaries with tobacco-related illnesses were free to sue tobacco companies for medical expenses. The AP/Tennessean reports that the plaintiffs' attorneys plan to request class-action status for the lawsuit to represent the estimated tens of thousands of TennCare beneficiaries who have been treated for tobacco-related illnesses. A judge has not yet ruled on that request (Gerome, AP/Nashville Tennessean, 3/28).