APNewsBreak: TennCare gives notice on $300M cuts

Posted: Monday, January 31, 2011 8:01 pm
By: AP

NASHVILLE (AP) — The state is preparing to cut $300 million in TennCare spending by limiting doctor and hospital visits, according to a public notice to be published in newspapers this weekend.
The proposed cuts provide a first glimpse at how Republican Gov. Bill Haslam may begin to close what he has estimated to be a $1 billion budget gap in Tennessee.
TennCare proposes to reduce state spending by $103 million, mostly with a cap of eight doctor and hospital visits a year for poor patients enrolled in the expanded Medicaid program.
The state cuts would erase $203 million more in federal matching funds.
The bulk of state cuts, or about $73 million, would be made by limiting adults to eight days each of the following:
• Inpatient hospital or psychiatric hospital services.
• Non-emergency hospital services.
• Office visits to physicians and nurse practitioners.
• Lab and X-ray services.
The move would also eliminate coverage of physical, occupational and speech therapy, and adult enrollees would no longer have coverage for podiatrists or physicians’ assistant services.
Adults make up about one-third of the 1.2 million people enrolled in TennCare.
The benefit cuts were originally planned by former Democratic Gov. Phil Bredesen last year, but they were delayed through a combination of federal stimulus money, prescription refunds and a temporary fee on hospitals.
“The cuts were in last year’s budget, they were just brought back,” said TennCare spokeswoman Kelly Gunderson. “They just weren’t implemented because of the one-time funding.
“At this time, there’s no recurring funding source for those items.”
Any changes would have to be approved by the governor and the Legislature.
The public notice was obtained by The Associated Press on Friday before it was published in state newspapers. TennCare was required to give public notice 30 days before submitting program change proposals to the Centers for Medicare and Medicaid Services.
TennCare will also have to do without the combined $564 million in federal reimbursements for prescription coverage for people who had been enrolled in both Medicare and Medicaid, and the last $20 million from the federal stimulus package.
Haslam is scheduled to hold public budget hearings next week, including on TennCare’s spending plan. A spokesman did not have immediate comment on Friday’s notice.
Lawmakers last year enacted a fee on hospitals that restored $210 million in state TennCare funding — and a federal match of about $717 million.
Craig Becker, president of the Tennessee Hospital Association, said the group is working on renewing the assessment fee to generate more than $400 million.
But most of that money will be needed to avert a 7 percent cut in reimbursement rates for hospitals and physicians that might otherwise decide to stop treating TennCare patients, Becker said.
“If the physicians get cut, then you really don’t have a program,” he said.
Bredesen in 2005 cut 170,000 adults from TennCare and reduced benefits to thousands more to bring spending under control. TennCare costs dropped by about $1 billion between 2005 and 2009, but still make up about 25 percent of the state budget.
Haslam has retained Bredesen’s TennCare director Darin Gordon. Before Gordon’s appointment in 2006, TennCare had had 10 directors in the 12 years of the program’s existence.
Published in The Messenger 1.31.11