Posted on 08/22/2002 9:45:56 AM PDT by GailA
Budget overrun faces TennCare despite cuts Director blames higher drug costs
By Paula Wade wade@gomemphis.com August 21, 2002
NASHVILLE - TennCare is likely to overspend its $5.7 billion budget by $256 million this year, even if the state cuts 159,000 people from the program's rolls by Dec. 31 as planned, TennCare Director Manny Martins told legislators Tuesday.
Martins said the cost overrun is due mainly to higher-than-expected pharmacy costs, and the fact that federal court orders have entitled TennCare recipients to name-brand drugs their doctors prescribe rather than generic equivalents.
Martins said that if his estimates hold true, he will need to exhaust the state's TennCare reserves in order to complete the budget year. But he said that even with the cost overrun, the state will spend less on TennCare this year than it did last year because of the restructuring of the program.
Members of the legislature's TennCare Oversight Committee seemed troubled by the implementation of TennCare's massive restructuring, which calls for 600,000 non-Medicaid TennCare members to come into the state's Department of Human Services offices to be screened for enrollment in the revamped program. Martins's budget counts on 159,000 of those enrollees being culled.
Some committee members echoed TennCare advocates' fears that some of the state's most vulnerable citizens, including the mentally ill and those with catastrophic illnesses, will end up cut from the program even though they qualify under the new rules.
Once they are removed from TennCare, they are unlikely to get back on the rolls because TennCare is closed to all new applicants indefinitely, except those who qualify for Medicaid or are deemed uninsurable and earn less than the federal poverty level.
"I knew people were going to get slammed, but today it just all hit home," said Sen. Roy Herron (D-Dresden).
"When we considered the waiver, there were so many flaws and problems that the committee discovered that they hid still other flaws and problems we didn't catch. The upshot of it is that if you're working to try and provide for your family, you're no longer eligible to get on TennCare no matter how desperately you need health care," Herron said.
Prior to TennCare, the state ran a catastrophic health insurance pool for uninsurables, but it was abolished when TennCare was created.
Lawmakers acknowledge that the details of TennCare's rewrite, new federal waiver and its implementation were almost completely ignored during the last legislative session's all-consuming debate over the state's fiscal crisis. And because many blamed TennCare for the state's financial problems, there was considerable zeal to cut the program's membership rolls and benefit levels.
Of the 140,000 non-Medicaid enrollees who've been notified by letter so far that they must be interviewed and offer proof that they qualify under the new "TennCare Standard" program rules, only 14,000 have scheduled appointments with DHS as required.
Martins, peppered with questions about people who might not receive their notices at all, finally answered lawmakers by using their own words: It's part of a get-tough TennCare Reform bill passed this year.
That law requires that all TennCare enrollees must be re-verified at least annually, and that a mailing to the person's last known address is presumed to be adequate notice. An enrollee's failure to receive a re-verification notice, the law says, doesn't matter.
Contact Nashville Bureau reporter Paula Wade at (615) 242-2018.
Director: TennCare must use reserve funds By The Associated Press August 22, 2002
NASHVILLE, Tenn. - Tenn-Care will have to dip into its reserve funds for about $132 million this fiscal year, director Manny Martins says.
Martins told a legislative oversight committee the program expects to overspend its budget by $287 million in the bookkeeping year ending next June even if, as the budget assumes, 159,000 people are eliminated from the rolls through tougher eligibility standards.
Martins said the increase is driven largely by higher-than-anticipated pharmacy costs.
Martins also said he expects to use all the TennCare reserves to complete the budget year. Even so, he said, the state still expects to spend less on Tenn-Care this year than it did last year because of the restructuring of the program.
The remainder of the anticipated shortfall - $154 million - would be paid for by the federal government, which provides about two-thirds of the program's $5.7 billion budget.
Most of the reserve fund comes from money carried forward from previous years.
It is not unusual for the reserves to be tapped at the end of a fiscal year. That's one of the reasons the fund was created. TennCare spokeswoman Lola Potter said the program took $77 million out of its reserve funds last year.
Members of the TennCare Oversight Committee said they are concerned about the massive restructuring of the program under a new waiver between the state and the federal government.
The effort to verify eligibility requires about 600,000 non-Medicaid members to go to a Department of Human Services office to be screened. Martins' budget assumes 159,000 of those enrollees will be declared ineligible.
Of the 140,000 non-Medicaid enrollees who've been notified they must offer proof that they qualify under the new TennCare Standard rules, only 14,000 have scheduled appointments with DHS so far.
The courts have ruled with some very liberal and expensive opinions (prescription drugs, free drugs if one appeals any prescription) and the politicians are trying to win votes.
Everyone is happy except the increasingly poor Tennessee tax payers.
They put the politicians in power.
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