TennCare advocates say there’s a better way
NASHVILLE — Gov. Phil Bredesen could save $325 million in TennCare spending by picking “low-hanging fruit” that would not hurt enrollees as much his reform proposal would, a coalition of advocate groups said Thursday.
The coalition, the familiar advocates for TennCare, pledged to support some manner of TennCare reform but said there are better ways than Bredesen is proposing.
Bredesen aims to reshape TennCare and save up to $1 billion a year in spending growth by 2008. TennCare’s current budget is $7.8 billion.
The advocates’ coalition outlined three broad-brush changes and said there are other ways to refine the program that also could save money.
The first proposal is to cut payments to the managed care organizations that administer TennCare but no longer have the financial incentive they originally did to control costs.
“We’re getting beans and rice and paying for filet mignon,” said Gordon Bonnyman of the Tennessee Justice Center, one of the coalition groups.
Megan Macaraeg of Tennessee Citizen Action said Tennessee was paying about 0.04 percent in administrative services before TennCare was created in 1994; if it still paid at that rate, she said, it would save about $77.5 million.
“We’re paying at rates that are relics of a past when the MCOs were at financial risk,” she said.
TennCare spokeswoman Marilyn Elam said payments to the MCOs have been frozen for several years under a “stabilization” plan. However, the federal government has made it clear the stabilization period has to end sometime.
“At this stage of the game the state is not in a position to ask the MCOs to go back to risk,” Elam said. “We need to take a look at what TennCare reform is going to look like with CMS (Centers for Medicare and Medicaid Services) approval, and then decide what sort of management structure we need. Then we’ll be in a better place to say what we need from our MCOs.”
The enrollee group also promoted “drug utilization review” as a way to cut down on prescription drug costs, the fastest-growing segment of TennCare and a problem in the state in general, not just in TennCare.
Bonnyman said the state could save $200 million by reducing the use of drugs to closer to the national per capita average.
He said the state has the technology to do a consistent drug review of users, prescribers and providers and could curb excessive usage through “peer-to-peer counseling” in the cases of doctors and pharmacies.
Elam said TennCare intends to improve its drug utilization review but that is not part of the governor’s proposal to CMS because federal approval isn’t required.
“That doesn’t mean it’s not going to happen,” she said. “We’re also looking at utilization in a prospective fashion through disease and care management, so we’re not just looking backward.”
The advocates’ third proposal is to have Tennessee join a multistate purchasing coalition for prescription drugs, which the group estimated could save up to $50 million a year.
Elam said that idea has been considered and rejected.
“TennCare would be larger than the entire pool if we joined,” she said, referring to one existing eight-state buying pool. “We already have more buying power. Purchasing power only gets you so much. We believe we have enough to maximize it as we now stand.”
Bonnyman acknowledged that some of the group’s proposals, especially this last one, conflict with what Bredesen has proposed to do.
Carol Westlake of the Tennessee Disability Coalition said Bredesen has agreed to meet with the coalition on Sept. 9. Bredesen released details of his reform plan last week, and is in the midst of a 30-day public comment period before submitting it to CMS.
Meanwhile, the state filed its latest response in a lawsuit brought by the Tennessee Justice Center over TennCare’s treatment of more than 600,000 enrollees under 21 years old.
The state argues in a response sent to federal Judge John Nixon last week that it cannot accept several conditions requested by the TJC. Bredesen has said the litigation threatens to torpedo his reform plan.