SHILLARYCARE: OFFICIALS SAY TENNCARE NOT WITHOUT PROBLEMS, BUT BETER THAN MEDICAID

NASHVILLE, Tenn. - The state's health insurance program is bloated, bureaucratic and wasteful, said Dr. Charles W. White Sr., a family physician in West Tennessee.

White, a former president of the Tennessee Medical Association, believes it's important to remember the motives for creating the $5.8 billion program for 1.4 million poor and uninsured people.

"The old system was a huge money losing situation," said White, who was TMA president when TennCare was developed in the early 90s. "I don't think we should go back."

White acknowledges the flaws. He runs a practice with his son and four other doctors in Lexington, about 20 miles east of Jackson. One employee spends 90 percent of her time on the telephone trying to get approval from TennCare for one thing or another.

Understanding TennCare's benefits and failures is more important than ever as state lawmakers consider changes to the program to save money. Grasping the complexity is equally daunting.

TennCare replaced Medicaid, the joint state-federal health insurance program for the poor and disabled, in 1994. The federal government pays two-thirds of the cost through Medicaid reimbursements and other funds.

The goal was to use private managed care organizations, or MCOs, to deliver health care to the Medicaid population for less money. The state intended to use the savings to expand coverage to the uninsured.

Many say the program proved successful, providing insurance to about 600,000 uninsured people.

Still, problems beset TennCare. Critics say it is too expensive, vulnerable to abuse, poorly managed, and its benefits package too rich. Some suggest the state scrap TennCare and return to the Medicaid program.

Dr. Fred Ralston, a Fayetteville physician who is chairman of the state Medical Association's ad hoc task force on TennCare, said drastic changes are needed.

"You can't conceive of how much havoc this program has put on medical offices in the state," Ralston said.

He recalls how in December 1993, one month before the program started and in the middle of flu season, the state sent letters to tens of thousands of enrollees telling them to ask their doctor which MCO they should use.

"The phones were flooded and we hadn't received the literature from the managed care companies," Ralston said. "Not only were the phone calls incredible, we couldn't help them."

Problems with MCOs continue to nag TennCare. Access MedPlus, once the largest of the program's 10 MCOs, collapsed last year. The implosion left an estimated $80 million to $100 million of debt to physicians and hospitals.

White, for example, said his small practice is owed an amount "in the six figures."

The Department of Commerce and Insurance is liquidating Access' assets, and state officials intend to make good on at least a portion the debts.

Access' demise came two years after the state took control of Xantus Healthplan of Tennessee because that MCO accumulated huge debts.

Before TennCare, there was no system to manage medical expenses. Physicians and hospitals treated Medicaid patients and charged the state for the costs.

"We didn't have a mature managed care marketplace," state Comptroller John Morgan said. "We went from being one of the states with the least managed care to one with the most managed care overnight.

"We didn't have the infrastructure in place to manage at the state level and we paid a penalty for that."

The state didn't create TennCare as a grand experiment. It developed from a fiscal crisis. Expenditures under Medicaid nearly tripled between 1987 and 1993, and were expected to grow another 17 percent in 1994, according to a 2000 report by The Urban Institute.

"Medicaid was almost like having several hundred thousand people with a credit card in hand and they could go out and consume medical services," Morgan said. "When the bill came, the state had to pay it."

Under TennCare, the state pays the MCOs a set amount to provide care, creating an incentive to control costs.

"Coverage is more aimed toward primary care and preventive care instead of care delivered in emergency rooms," Morgan said. "Under the old way, uninsured folks would get sick, wait until they got sicker and then go to the emergency room to get care. That is the most expensive way to treat people."

Tennessee is the only state that has enrolled all of its Medicaid recipients in managed care and expanded coverage so widely. It was created as the Clinton administration was working on universal health care, and it received extremely generous funding from the federal government.

Despite the problems, many believe TennCare has saved money. Morgan often tells lawmakers the program saved the state more than $2 billion through 2001, a figure he calculated using neighboring states' experiences with Medicaid.

However, with the state facing a $350 million budget deficit, the value and structure of the state's health system faces another crisis.

Gov. Don Sundquist has proposed changes to TennCare that are expected to tighten eligibility and trim up to 120,000 people from the rolls, reducing the state's cost by $142 million.

-TennCare Medicaid would have an estimated 950,000 enrollees who are eligible for the Medicaid program, the guidelines for which are largely set by the federal government.

-TennCare Standard would mirror private insurance coverage, with reduced benefits, for people above the federal poverty level and some children.

-TennCare Assist would provide a state subsidy for people with access to private insurance who can't afford the premiums.

Sundquist's, which still must be approved by the federal government, shifts more control of TennCare to the General Assembly. Some fear that with the state's ongoing budget troubles the program will be underfunded or eliminated.

"The governor's proposed changes to TennCare will have a devastating effect on local governments if the legislature does not fully fund TennCare," Eric Cole, executive director of the advocacy group Tennessee Citizen Action said. "Thousands of people will be cut off the TennCare program and local governments will be left to pick up the tab for these people's health care expenses."

"Back then I used to use the example that every headache patient does not need a neurosurgeon - but that's what they got," he said.

But there is no savings.

So, they should eliminate the coverage for the uninsured.

They can't even prove that all of the money they have spent on the uninsured has improved public health whatsoever.

TennCare recipients use their coverage to bring babies to the Emergency Room in ambulances for treatment of diaper rash.

And we pick up the tab----and are called "heartless" because we don't want to pay 4% of every dollar we earn to continue this travesty.

Telling the truth about TennCare

by Steve Gill

Steve Gill is the morning radio talk host on Nashville’s Supertalk 99.7 WTN.

For the last several years, taxpayers have been assured that the cause of the state’s financial woes has nothing to do with the spending side of the equation. “An insufficient and inelastic” revenue stream has regularly been blamed as the culprit in the state’s financial mess.

TennCare, the state’s massive health care system that was modeled after Hillary Clinton’s view of health care, “is not the problem” we have been told. But even a cursory review of TennCare, and its impact on the budget, reveals that it is indeed the culprit in Tennessee’s recent spending spree.

In TennCare’s first year of operation, fiscal year 1994, the cost of the program was $2.73 billion. For fiscal year 2001-02, according to the fact book issued by the Senate and House Finance, Ways and Means Committees, TennCare will cost the taxpayers more than $5.8 billion - an increase of well over 100 percent since its inception.

One of the reasons that spending on TennCare has increased so dramatically is the fact that so many people who are not legally eligible for its benefits continue to receive taxpayer-subsidized health care. In January 2000, TennCare’s acting director disclosed that after checking the eligibility of 41,470 of the non-Medicaid TennCare enrollees, 20 percent were ineligible. Some estimates of the number of those not eligible due to residency, access to employer health plans or other factors may actually run higher than 30 percent. In other words, more than 150,000 people may be receiving taxpayer-funded health benefits to which they are not entitled at a cost of more than $200 million a year, yet no serious effort has been undertaken to ferret out the fraud, waste and abuse in TennCare.

In fact, the state cannot even reveal how many people on TennCare have no address in Tennessee other than a post office box - a number which might indicate the extent to which people outside of Tennessee are committing fraud by simply using a bogus address.

Likewise, hundreds of thousands of others are receiving TennCare benefits who do not meet income standards. 1999 Census Bureau data indicates that Tennessee had a poverty rate of 12.7 percent. With a total state population of about 5.4 million, and with adjustments for Medicaid income eligibility, there should be about 825,000 Tennesseans qualified for health care assistance. Yet, according to the TennCare Bureau, about 1.19 million people are on TennCare due to being below the poverty level.

Apparently, about 300,000 people are under-reporting their income in order to receive some of the best health care in the country - for free or nearly free - yet Tennessee has not prosecuted a single person for misrepresenting their income level when enrolling in TennCare.

Finally, the fraud that is apparently epidemic in the mismanaged TennCare program is best highlighted in prescriptions, where Tennessee ranks No. 1 in the country with the highest per capita prescription usage - 40 percent above the national average! And TennCare usage is even more out of control - more than 87 percent higher than the national average! Something is seriously wrong in terms of cost, fraud and health risks from mixing so many drugs, yet nothing has been done.

The truth is that TennCare is an abysmal mess and the state’s budget problems will never be fixed until the problems that plague TennCare are addressed. In the meantime, hundreds of millions of dollars are slipping through the cracks that could better be spent on improving our schools, revitalizing our urban and rural areas and improving the quality of life in Tennessee. The sooner we face up to the challenge of fixing or scrapping TennCare, the sooner taxpayers will have relief from the unrelenting assault on our wallets.

Here is some of the facts the doctor left out. Medicaid was only inteneded as being for widows of deceased workers and surviving children, for the disabled worker and their children, for poor elderly as a suppliment to Medicare. That is where the problems started. Expanded here expanded there expanded to cover everyone everywhere.

Medicaid was indeed accountable to the taxpayer and was closely monitored by the Tennessee State Inspector Generals Office. They and they alone handled abuse complaints and saw to it that services were indeed rendered and payments were forthcoming.

Medicaid in Tennessee was set on a course of destruction under Ned McWherter. If you have a look now some of his Health & Human Services Directors are CEO's of Tenn Care HMO's. It was a deliberate sabatoge to bring in Hillary Care. I have been following this and have fought against Tenn Scare since before it started.

Several national name insurance companies virtually took over our state government through scare tactics. Ironically the very first ones that were almost booted from Tenn Cares rolls were indeed the disabled who had previously worked and became disabled. I say end Tenn Care and restore Medicaid to the origional program under the I.G.'s scrunity. Universal Health Care is not the answer.

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