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TennCare Cuts Expected, Haslam Wants Feds To Release Funds

by Mike Morrow on October 24, 2011

On a day when he met with his health and wellness task force, Gov. Bill Haslam on Monday lamented the predicament the federal government has put Tennessee in on $82 million in TennCare funds.

First, the feds said they goofed and owed the state the money due to an accounting error. Now, they say they owe the money but that it might take an act of Congress to release the funds, creating a delay.

Haslam isn’t happy.

“We were really disappointed,” Haslam said. “They had told us. They said, ‘We owe you that money.’ There was no question about that.

“The question was how they were going to refund it to us, and now they said, ‘Well, we do owe it to you, but we can’t pay it back to you without some specific legislation,’ which doesn’t seem right to me.”

The Haslam administration originally had planned for an 8.5 percent reduction for certain providers in TennCare in the state budget. But while a 4.25 percent reduction was put in place beginning this July 1, the rest was postponed to Jan. 1, 2012, since the state expected the funds to come from Washington. Paired with better-than-expected revenues at the time, the state was able to dodge a financial bullet when it amended the original budget plan this year.

But now, with the delay, the other 4.25 percent in cuts will apparently be applied. Haslam referred twice to the amount Monday as about “4 and a half percent,” but an aide pointed out it is the 4.25 percent.

“It’s just wrong that they say, ‘We owe that to you, but we can’t pay you ‘till we pass new legislation,'” Haslam said.

Further, Haslam isn’t confident the state will get its money.

“I’m really not. I wish I was,” he said. “What they had told us last spring was, ‘Definitely we owe it to you. We’ll figure out a way to get that money to you.’ And then the message came back last week, ‘Well, actually, we don’t think we can get it to you without specific legislation.’

“And I think in today’s Washington, specific legislation to send money away out of the federal government to us, even though it’s owed to us, I think will be difficult.”

TennCare officials announced last week they believed it is “highly improbable” the legislation could be introduced and passed in Congress by Jan. 1. So the cuts, which would affect nursing homes, managed care administrative rates, transportation providers, lab and X-ray providers, dentists and home health providers, are expected.

Haslam was asked if the state had any recourse.

“I don’t know that. That’s a really good question. We don’t know that we do,” he said.

The funds are caught in a mix-up involving two federal programs, Medicaid and Medicare. Over 35 years, about 300,000 people applying for disability payments were involved. Federal officials had mistakenly considered the applicants under Medicaid when they should have been covered by Medicare. States have to pay for a share of Medicaid coverage while Medicare is covered by the federal government. TennCare is Tennessee’s version of Medicaid.

But while the state grapples with the federal government, a group tasked with coming up with a plan to improve Tennesseans’ health had its first meeting Monday.

Haslam welcomed his health and wellness task force to Conservation Hall at the Tennessee Residence and formally issued a release announcing the 16 members, who are health care leaders from across the state.

The governor made the case that health is related to education and economic development, and the state has a lousy record on health and wellness in national rankings.

“We have to face facts,” Haslam said. “In Tennessee, we rank 42nd in terms of health and well-being. Some of those are preventable, addressable issues.

“We’ve brought together, I think, some of the finest people from across the state who work on this every day, from different aspects, to see if we can address this.”

Haslam said he wanted a clear strategy that has “measurable outcomes” from the group. He noted that about one-third of the state budget goes to health care costs.

“When we bring back up this budget next year you’ll see again how much involvement we have in health care,” he said.

The task force is chaired by Dr. John Lacey III, chief medical officer for the University of Tennessee. Haslam said he would like to see an outline of a plan from the group in the first half of 2012.

Haslam did say the state has made some recent progress but that the state is still in the 40s when ranked nationally. In a slideshow presentation, Ben Leedle Jr., CEO of Healthways, headquartered in Franklin, said the state had climbed from the ranking of 42nd in 2009 that Haslam mentioned to 40th in 2010.

“To your point, we’re making progress,” Leedle said. “But I want to point out something really important in this data.

“The mid-year 2011 well-being data shows Tennessee has slipped from 40th to 45th. Anybody see what’s probably driving that? Look at the ‘healthy behavior’ line. Dead last in the U.S.”

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  • Amy Liorate

    It seems that if our federal government stuck to what is outlined in Article 1 section 8 of the US Constitution then there wouldn’t be a point for the US to owe $82 Million dollars to the State of Tennessee for medical care.

    The federal government was designed to deal with international matters and not directly interact with millions of citizens unless they are soldiers, in federal court, or working as in the case of a postal worker.

    The states should be doing all these other things.

    Haslam doesn’t seem to understand or advocate that this simple problem has a very workable solution. Not about the one time $82M deal, but all the other gotcha’s just like it.

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