TENN: SHILLARY CARE LITE: TennCare chief cites cost overrun of $258 million

The Commercial Appeal ^ | 1/16/03 | Paula Wade

[GailA]

TennCare chief cites cost overrun of $258 million

By Paula Wade wade@gomemphis.com January 16, 2003

NASHVILLE - The TennCare program is running $258 million over budget, TennCare Director Manny Martins told lawmakers Wednesday, chiefly because the state overstated the potential cost-savings of last year's TennCare reforms.

Martins said that even if the state wins its federal court appeal and can continue to trim TennCare's rolls and reduce the program's health benefits as called for in Gov. Don Sundquist's reforms, state lawmakers still will have to find an estimated $258 million to balance the TennCare budget by July 1. If the state loses that appeal, he said, "you can add another $260 million to $300 million to that number."

Martins addressed the entire state House of Representatives Wednesday morning at the request of House Speaker Jimmy Naifeh to help bring House members up to speed on TennCare, the controversial and troubled Medicaid expansion program that insures 1.3 million Tennesseans. The news of the cost overrun comes on top of the litany of familiar TennCare problems, including financially troubled managed care organizations, ongoing lawsuits, and operational snags.

"We believe we will exhaust every TennCare reserve (fund) we have, and then some," said Martins. "We used some aggressive budget assumptions that just didn't pan out."

Martins said the state had calculated savings of about $150 per person per month for every enrollee cut from the TennCare rolls, but that cost figure has ended up being about $100 per person instead. In addition, the state has had to delay other cost-saving measures, including the move to shrink the program's benefits.

TennCare's future is in limbo while a federal appeals court takes up U.S. Dist. Judge William J. Haynes's December order reinstating 150,000 to 200,000 people to TennCare's rolls and effectively halting the state's reform of the program.

Haynes ruled that TennCare's massive "re-verification" of enrollees - a process set up to determine who would still be eligible for the scaled-back program - was so badly flawed that it had to be halted and the cut enrollees reinstated. The state has won a stay of that order pending the appeal.

Another factor in the cost overrun is that the federal government has capped the amount it will pay into the TennCare program this year, meaning that any cost overrun will have to be paid for solely with state dollars, Martins said. State officials are in negotiations with the federal government to increase that federal ceiling.

Asked how they intend to deal with the potential budget problem, Naifeh and other House leaders demurred, saying they will wait for word from incoming Gov. Phil Bredesen.

"I think he's going to realize that it's a lot worse than he thought it was," said Rep. Lois DeBerry (D-Memphis). "It's going to take a miracle on his part."

Bredesen, who takes office Saturday, has been briefed on the projections, said spokesman Lydia Lenker.

"They underscore for him the terrible shape TennCare is in. One of the first things he plans to do is to arrange a meeting with Senators (Bill) Frist and (Lamar) Alexander and the rest of the state's delegation in Washington to explore the options of help from Washington."

It is unlikely the program could be cut again in time to eliminate the current-year deficit, Martins said. "When you cut a program like TennCare, it's like pushing a balloon - the cost is going to show up somewhere else."

So far, the state has removed 150,000 people from TennCare's rolls and is preparing to remove another 51,000. Another 168,000 are still in the process of having their status decided. In April, the state plans to split the program into two health plans, another cost-cutting move within the TennCare reforms that was held up by Haynes's order.

Naifeh was asked whether he felt he was misled by the Sundquist administration's representations of the TennCare reforms and their potential cost-savings. "I can't comment on that right now," he responded. "Gov. Sundquist deserves credit for trying to keep it afloat."

"We knew those projections were wrong at the time," said hospital lobbyist Craig Becker, who said hospitals are worried that state officials will use the $75 million set aside for special hospital payments to help fill the $258 million gap. "Those hospitals have made their budgets and are counting on that money."

The $6 billion TennCare program, which also incorporates the state's mental health program, nursing home program and related health services, gets $1.9 billion of its funding from state taxpayers, and the rest from federal funds, premiums and drug rebates.

Contact Nashville Bureau reporter Paula Wade at (615) 242-2018.

[GailA]

We were PROMISED it was FIXED with the last infusion of $400+M last year. We were PROMISED it the year before when they infused yet another $400+M.

This is the vehicle to impose a STATE INCOME TAX on Tennesseans. They knew from the start that it would bankrupt the state with out MASSIVE new revenues.

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[Little Bill]

Gail

Time for a "wiff of grape shot?"

[steve50]

A meeting with Frist? I thought his family was one of the winners from medicare fraud in the state. Haven't they paid something like $1.5 billion to stop investigations into two seperate cases?

[Blood of Tyrants]

I still don't know it Bredesen will take an honest look at Tenncare and conclude the obvious; that the system is hopelessly screwed up and the only solution is to eliminate it, or will he revert to his lifelong Rat training and start claiming that if it weren't for the GREEDY anti-taxers, this problem would magically have disappeared years ago.

[buffyt]

Back before the government and health insurance companies tried to turn this into a nanny state, it cost me $7 to go to the doctor. I paid it. Now it costs $100.00 - I pay $20.00 of it, my insurance pays the rest. Once our company started paying so much through insurance the local doctors raised their prices and hired more people to handle all the insurance paperwork and phone calls to insurance co. Now the company is cutting back on the percentage it will cover on med. bills - but the doctors aren't lowering their prices. I can no longer afford to go for some of the med. tests my doctor would like for me to have. The prices are jacked up so high, and insur. has cut back, and I can't afford it. It used to be much cheaper BEFORE insurance came into play. Everyone has to get his profit, his "cut".

Plus I took my son for a shot at MedStaff, our doctor doesn't keep meningitis serum on hand. They asked if we have Medicare. I said no, but I have Dow Chem. insurance. They said, "We don't take insurance, you will have to pay $70. for a shot" I pay for the people on medicare to get free shots PLUS I have to pay for my shots. I think the med. industry is pricing themselves out of existence. Eventually my doc. won't give me my high blood pressure prescriptions and thyroid prescriptions if I don't get the blood tests to see how my med. is working, but I can no longer afford them. My husband had some tests and my son had a trip to emergency room and it cost me THOUSANDS. Back when insurance was ONLY for emergencies, regular tests and office visits were affordable. now they are through the roof. And my husband is in the top ten percent of salaries in USA. But I have three in college, no loans/grants/scholarships.

[GailA]

He's said it is in a worse mess than spendquist said it was. Whether he can do a better job will be seen. The court rulings will play a big part of that equation I would imagine.

What must be kept in mind TennCare was and is the Income Tax vehicle. So don't look for real fixes any time soon.

[GailA]

So true. My thyroid script needs renewing. Which means another $400 test plus the $75 for the doctor. Hubby is among the long termed unemployed, so we don't have health insurance. We don't have the $475 to spare either. I will try and see if they will renew the script but if they don't I'm out of luck and will have to go back to having severe leg cramps and the other health problems of a low thyroid.