‘Key’ Lawmakers Question Ability of TennCare Stabilization Plan To Save Taxpayer Funds
Tennessee's plan to stabilize TennCare, the state's Medicaid managed care program, will "give windfall profits" to the program's managed care organizations at the expense of taxpayers, some state lawmakers said, the Nashville Tennessean reports (Lewis/Wissner, Nashville Tennessean, 5/19). On July 1 TennCare will temporarily stop paying providers through MCOs and instead will pay them directly for services they provide to beneficiaries. The switch is meant to provide some stability to 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. The plans will also be paid an extra 2.2% for holding medical costs down (Kaiser Daily Health Policy Report, 5/17). For example, health plans will receive incentives for recovering payments from third-party insurers and increasing the use of generic drugs. However, given that the insurers will no longer "bear any risk" for the cost of care, some "key" lawmakers said the plan actually will "diminish incentives to save money." State Sen. Doug Jackson (D), said, "The insurance companies can maximize their profits by doing very little. There is reason for everyone to be concerned." TennCare Director Mark Reynolds, however, dismissed such criticism, saying that even in a worst-case scenario, costs would remain the same. He added that insurance companies will work to control costs and taxpayers could save money. "It's not as if this plan is more expensive than the alternative," he said (Nashville Tennessean, 5/19).
TennCare Overview
The Tennessean on May 19 included an overview article on TennCare, explaining the program's history, as well as the state's stabilization plan. The article is available online (Nashville Tennessean, 5/19).
