Managed Care
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One Winner Could Take TennCare Bid

MANAGED CARE December 2004. © MediMedia USA
Legislation & Regulation

One Winner Could Take TennCare Bid

John Carroll
MANAGED CARE December 2004. ©MediMedia USA

John Carroll

With 11th-hour negotiations over the fate of Tennessee's once ambitious health program for the working poor and Medicaid population — TennCare — running right up to Managed Care's deadline, it was impossible to tell just what might emerge from the talks.

Gov. Phil Bredesen and patient advocates have been wrangling over either rationing care for all or simply dismantling TennCare and returning to a traditional, Medicaid-only approach. But one managed care company might emerge as a winner no matter what happens.

It's just that no one knows which one.

Currently, seven different MCOs handle TennCare patients. But Bredesen told a reporter from the Chattanooga Times Free Press that he favored putting the whole TennCare contract up for bid in a winner-take-all-approach.

"We would certainly consider as a part of these changes moving to some sort of a single payer or single processor to get a more efficient system that way," he said. And he specifically noted that BlueCross BlueShield of Tennessee, which coordinates coverage for more than 700,000 of the 1.3 million Tenncare subscribers, would be one of the favorites to take over.

Bredesen — a veteran of the managed care industry — was elected to his job promising to reform TennCare, which once championed a collective approach to handling the health of all needy residents. But with costs mushrooming far beyond the capacity of the state's budget, Bredesen triggered a furor by suggesting that recipients agree to a variety of limits on care — everything from the number of doctors' visits to caps on prescriptions — as a way of reining in the costs.

TennCare advocates immediately pushed the governor into court and quickly won a ruling that stayed the governor's hand. But Bredesen responded with a new game of hardball. At the end of November he presented his critics with an ultimatum: either accept limits or stand aside while Tennessee cut everything except basic Medicaid.

And managed care companies with a stake in the outcome are following the drama closely.

"I think he's just speculating right now," responded BlueCross spokesman Bill Steverson when asked about the unexpected endorsement. "We have been a major player with TennCare since its inception and we would like to continue, whatever direction the governor pursues. We would like to be part of that program."

States around the nation have been keeping an eye on events in Tennessee as they too grapple with fast-rising Medicaid costs in a period of flat or falling tax revenue. In most cases, such as Mississippi and Texas, lawmakers have been devising more stringent guidelines to qualify for Medicaid as a way to cut back on costs.