TennCare Officials Detail Plan to ‘Stabilize’ Program By Shifting Financial Risk from Insurers to State
TennCare, Tennessee's Medicaid managed care program, on July 1 will temporarily stop paying providers through managed care companies and instead will pay them directly for services they provide to beneficiaries, state officials told the state Legislature's joint TennCare Oversight Committee on May 15, the Nashville Tennessean reports. The "dramatic chang[e]" in the program's structure is meant to provide some stability for providers, who maintain they are owed millions of dollars in unpaid services by the now-insolvent Access MedPLUS and other "troubled" health plans, including Xantus Healthplan of Tennessee and Universal Care of Tennessee. Under the new system, which will run for 18 months, the state will pay TennCare MCOs an administrative fee equal to 7% of the claims they process (Lewis, Nashville Tennessean, 5/16). The plans will also be paid an extra 2.2% for holding medical costs down (Wade, Memphis Commercial Appeal, 5/16). Previously, the state had paid the health plans a monthly fee for each TennCare beneficiary in the plan; plans used the fee to pay providers for services and kept any leftover funds. Health plans also had been liable for additional expenses if their costs exceeded payments from the state, but under the new system, the state will assume that liability (Nashville Tennessean, 5/16). TennCare officials and advocates say the change will keep the health plans in the program "afloat while [it] is restructured," the Commercial Appeal reports.
Lawmakers Critical
Physicians and advocates praised the plan, but some lawmakers criticized it, saying the state cannot afford the additional risk, given its budget deficit (Memphis Commercial Appeal, 5/16). State Sen. Roy Herron (D) said the plan might not save TennCare, adding that it is a way for the Gov. Don Sundquist (R) administration to defer blame for the program's problems (Nashville Tennessean, 5/16). State Sen. Doug Jackson (D) has called for the TennCare panel to hold hearings to determine how much financial risk the state will assume under the plan (Memphis Commercial Appeal, 5/16).
