Tennessee Lawmakers Consider Effect of Ending TennCare; Governor Confirms Director’s Resignation

Tennessee officials on June 12 told members of the House Finance Committee that scaling back TennCare, Tennessee's Medicaid managed care program, to a traditional, fee-for-service Medicaid program would cut coverage for more than 350,000 residents, "decimate" the mental health system and cut more than $1 billion from the state's health care industry, the Memphis Commercial Appeal reports. One budget proposal lawmakers are considering would "reinstate" the traditional Medicaid program for about 950,000 residents who are categorically eligible for benefits and would create a CHIP program for children. However, the plan would eliminate coverage for 350,000 current TennCare beneficiaries, most of whom are adults unable to obtain private health coverage. The plan would be "devastating" for individuals who could lose their coverage, officials from TennCare and the Departments of Mental Health, Mental Retardation, Children's Services, Human Services and Health, told the finance committee. Without health insurance, many patients would seek care in emergency rooms, officials added. Mental Health Commissioner Elisabeth Rukeyser said that 20,000 individuals with severe mental illnesses would lose their TennCare coverage under the budget plan (Wade, Memphis Commercial Appeal, 6/13). Paring TennCare would save the state $54 million in the fiscal year 2003 budget, but much of that amount would be shifted to local governments and other state departments that would then take on the responsibility of caring for the newly uninsured. Program cutbacks also could violate federal law or court orders, which could prompt legal challenges, officials said. A final state budget plan must be in place by July 1 (Lewis, Nashville Tennessean, 6/13).

Recent TennCare Developments
In other TennCare news:

• As expected, Gov. Don Sundquist (R) on June 13 announced that TennCare Director Mark Reynolds is resigning. His resignation comes just as legislators begin debate on reforming the program. "This has been an incredible challenge, and I'm glad to have served in this function through this important period at TennCare," Reynolds said. Reynolds, who has headed the department since June 2000, was the program's eighth director. Manny Martins, an assistant commissioner in the state Department of Commerce and Insurance who regulates TennCare HMOs, will replace Reynolds. Martins formerly served as the state's Medicaid director and helped design TennCare (Office of the Governor release, 6/13).
• The state Senate Finance Committee on June 11 approved a provision that would require individuals to provide proof of residency to enroll in TennCare. The provision is part of a larger bill that would put into law changes allowed under a recently approved federal waiver. Currently, applicants must demonstrate proof of residency, but that requirement is not a part of state law. Although a length of residency is not required, applicants would need to provide a utility bill, driver's license, motor vehicle registration, voter registration or similar document to prove their primary residence is Tennessee. The homeless and applicants considered categorically eligible for Medicaid are exempt from the requirements. Senators also added into the overall bill an amendment that would abolish the joint TennCare Oversight Committee, which does not vote on legislation but rather issues comments on TennCare-related measures. Given that other committees review such legislation, some lawmakers have said the oversight panel is a "waste of time" (de la Cruz, Nashville Tennessean, 6/12).