Some of the Unanswered Questions about TennCare Reform
July 27, 2005
During the Grier case hearing testimony and other presentations by Bredesen administration, it is evident that there are many unanswered questions concerning the Governor's changes to the TennCare program. Here are a few of these unanswered questions.
1. The Bredesen Administration does not know who will be affected by benefits limits.
Dr. Wendy Long, TennCare medical director, stated the administration does not know who will be impacted by the benefit limits, but assumes that it will be the sickest people with multiple chronic illnesses. (Grier testimony on July 8, 2005)
2. The Bredesen Administration does not know the medical impact of the cuts and does not know the downstream costs of the cuts.
Dave Goetz, Tennessee Commissioner of Finance and Administration, stated in Grier testimony that the administration has analyzed the cut's financial savings to the TennCare program; however, the administration has not analyzed the medical impact on TennCare enrollees. In addition, the state has not analyzed the downstream financial impact on the state's overall budget. (Grier testimony on July 11, 2005, and deposition testimony March 6, 2005)
3. The Bredesen Administration does know why doctors are writing prescriptions for medicines without prior approval or for medicines that do not appear on the preferred drug list (PDL).
Dr. Long stated in Grier testimony that 1,200 doctors a month write prescriptions without prior approval or for medicines that do not appearing on the PDL. However, the Bredesen Administration has never determined why the doctors are doing this. The doctors have never been contacted and the prescription data has never been analyzed. The Administration does not know if there are legitimate reasons that the physicians are prescribing these medicines or if they are prescribing improperly. (Grier testimony on July 8, 2005)
4. The Bredesen Administration does not know the prescribing patterns of TennCare doctors and the actual drug use of TennCare patients.
Dr. Long estimated that about 49% of the prescriptions written for TennCare patients are on the Preferred Drug List (PDL). However, of that 49%, only 7% are subject to prior approval. This means that more than 90% of all drugs are not subject to prior authorization.
The only way to determine the true amount of drug use and drug spending under TennCare is by DUR drug utilization review. However, it was not until May 2005 that Bredesen Administration contracted with First Health to conduct comprehensive retro DUR according to Dr. Long. (Grier testimony of July 8, 2005)
Note: The Bredesen Administration's plan to cut TennCare drug benefits was put into place without any evidence-based knowledge of actual drug usage and prescribing patterns.
5. The Bredesen Administration does not know its new definition of "medical necessity".
Although the Administration plans to change the definition of "medical necessity" under the TennCare program a crucial factor in delivering healthcare the Administration cannot yet provide this new definition or the rules and requirements under the new definition.
6. The Bredesen Administration does not know why the University of Tennessee never performed the Drug Utilization Review work that it was paid to do. (Grier testimony of Dave Goetz, Commissioner of Department of Finance and Administration).
In Grier testimony, Commissioner Goetz said that UT did not perform the DUR work because the state could not get the data that it needed from its TennCare MCOs. However, he did not offer an explanation about why the state could not get the data from its own MCOs such as BlueCross/Blue Shield and OmniCare.
7. The Bredesen Administration cannot explain why a DUR contract was awarded in May 2005 to First Health, when TennCare officials had been so dissatisfied with First Health's earlier work for TennCare.
During Grier testimony the week of July 4, Manny Martins, former TennCare director, said that more than a year ago he had discussed terminating First Health's contract because the state could not rely on any of the firm's data or systems. Martins' testimony was followed by statements from Dr. Wendy Long, medical director of TennCare, in which she conceded under cross-examination that TennCare officials discussed firing First Health. She testified that the firm had mishandled mail and data that affected TennCare's integrity and resulted in unnecessary overspending. Nonetheless, the state extended First Health's contact without competitive bidding and more than doubled the firm's fee from $15 million to $37 million.
8. The Bredesen Administration cannot explain why it blames Grier for TennCare's financial and management problems when a key TennCare official stated that Grier actually benefits the state.
During Grier testimony on July 5, Manny Martins, former TennCare Director for the State of Tennessee, admitted under oath that the Grier Consent Decree is not a management problem for TennCare and is not the cause of the program's financial problems. In addition, he stated that the Grier Consent Decree is a "benefit to the State". Martins is an expert with more than thirty years in the administering the Medicaid/TennCare programs, and who continues to work for the Governor Bredesen's administration, focusing specifically on children's health.
During cross-examination, Martins agreed that the appeals process that the Consent Decrees created provides needed data for the successful management of TennCare. He agreed that the Consent Decrees provide a safeguard to the enrollee and ensure consistency with federal law. He also agreed that having an appeal system "is a useful safeguard".
Martins testified that the Governor himself was directly involved in negotiating the 2003 changes to the consent decree with the express intent to control pharmacy costs and that the Administration thought the settlement was a success. Once the issue was addressed, Martins testified that the Grier Consent Decree was the not the cause of financial problems.
9. The Bredesen Administration cannot explain how changes to Grier will allow it to "save" 97,000 current enrollees in the Medically Needy category when the Administration wants to enact new requirements that will disqualify nearly every one of the 97,000 people in this category.
The reality is that very few -- if any -- of these 97,000 enrollees will still qualify for the Medically Needy category under the new stringent requirements that Administration wants to enact. Currently, the TennCare program allows individuals a deduction against their monthly income for any medical expenses that they owe. However, the criteria for the program proposed by Governor Bredesen would only allow medical expenses incurred within the last 90 days before the application. This 90-day restriction will make it impossible for nearly everyone of the 97,000 people who currently qualify as spend-down medically needy to retain TennCare health coverage.
To qualify for the new program at the end of their current 12-month eligibility period, the 97,000 people would have to have incurred substantial medical bills in the last month of their existing coverage. But, since TennCare will have covered most or all of their expenses during that period, they will likely be unable to meet the new program's requirements. Because they will not have had medical expenses in the 90 days prior to their TennCare coverage ending, the current Medically Needy Spend-Down group will lose their TennCare and cannot reapply until July 1, 2006. 36,000 people cannot reapply because they also have Medicare; they will lose TennCare coverage. Of those people who can reapply, some will go more than a year without health care coverage before they can reapply for TennCare.
Once enrollees are on the program, under the Governor's plan, they will only get 2 months of coverage.
