Lawmakers Get Early Opportunity to Grill Haslam Officials on ‘Insure Tennessee’

For the better part of two years, Gov. Bill Haslam has been bargaining with the Obama administration over a way the state could access billions of dollars in federal funding available through the president’s Patient Protection and Affordable Care Act.

But Haslam, a Republican, has said all along he doesn’t want to simply add more names to the state’s existing government-financed medical-care-for-the-poor program.

Late last year, the governor announced he’d reached a deal with Washington to allow Tennessee to draw down the Medicaid expansion dollars — but not just for growing the scope of the same old TennCare program. Rather, the governor and his health policy advisers have designed a new initiative with incentives to encourage uninsured Tennesseans to get health coverage, get healthier and get more aware about how much medical care actually costs.

The program, called “Insure Tennessee,” is proposed to initially launch as a two-year pilot program. The Haslam administration, though, is hoping the program proves successful enough that it’s renewed at the end of the trial period. Their longer-term hope is that some of the incentive components that introduce “market tensions” into the mix could potentially be expanded to those already on TennCare if the federal government likes the results.

The Tennessee Legislature is scheduled to deliberate on the plan — or, more specifically, the governor’s tentative deal with the federal government — in a special session that starts Monday afternoon.

All this week, Haslam has been traveling the state speaking to small groups of lawmakers trying to convince them that the agreement he’s reached with the Obama administration won’t ultimately end up costing the state government any additional funding — and that “Insure Tennessee” will result in both better health care for, and better decision-making by, a significant swath the state’s currently uninsured.

On Wednesday, the high-ranking officials from the governor’s administration talked about the program with lawmakers at the Capitol, making their case for its adoption and trying to alleviate concerns that it could cost more and do less than Haslam is promising.

Below are some videos of the exchanges between legislators and Haslam administration officials.

TennCare Officials Outline ‘Insure Tennessee’ Costs

According to TennCare officials pitching the “Insure Tennessee” plan, the “anticipated federal revenue” to pay for the program in the first six months of its operation will be $664 million. That’s expected to rise to $1.39 billion for the next 12 month period — Fiscal Year 2017 — with an estimated state cost of $35 million, and in the last six months of the pilot program, federal revenue is expected to be $728 million with a state cost of $38 million.

Haslam has said Tennessee’s hospitals have agreed to pay for any costs the feds pass on to the state.

State officials also expect “a steady pattern of growth” in enrollment over the two-year period, starting with an initial enrollment of 280,000 in 2016. Enrollment is expected to reach 307,600 by the end of the pilot-program period.

For the first two years of “Insure Tennessee,” the federal match rate will be 100 percent, while in 2017 that rate will decrease to 95 percent.

Wendy Long, TennCare’s chief medical officer, said that Haslam’s new program introduces some of the “fundamental changes” needed to help the state “move us away from this system that rewards volume, to a system that rewards value.” She added that TennCare’s payment reform efforts are underway to try and change the way health providers react to dealing with low-income patients. Those payment reforms “are critical not only to the success of Insure Tennessee, but to the financial health and sustainability of the much larger TennCare program.”

What Would TN Look Like Without Medicaid Expansion?

Jackie Taylor, a physician, and Mark Cate, Gov. Bill Haslam’s chief of staff — both members of a panel pitching Haslam’s “Insure Tennessee” plan to lawmakers Jan. 28 — said the long-term impacts to Tennessee should the General Assembly choose not to enact Medicaid expansion are less than optimal.

The status quo — that is, “People without access to care” — would continue, said Taylor.

While Haslam’s plan “isn’t a silver bullet,” Taylor thinks it “will help a lot.” He hopes to “see more people with access to care” to help prevent problems early on.

Absent “Insure Tennessee,” the administration doesn’t think it will have the opportunity to improve quality and decrease costs, and hospitals would likely also continue to see a strain on their resources, said Cate.

Expansion Demographics, Hospital ‘Assessment’ Explained

Memphis Democratic state Rep. G.A. Hardaway raised a couple questions regarding what the racial and gender make-up of the new government-aid recipient pool would look like.

Long, TennCare’s chief medical officer, explained that compared to traditional Medicaid, those affected by Insure Tennessee are “more likely” to be white, male, childless adults who are working. Many traditional Medicaid categories are “pre-disposed to covering females, like pregnant women,” she said.

Like a lot of lawmakers across the state who talked to Haslam this week, Hardaway wanted more information on how the hospital assessment that is supposed to pay the state’s portion of Medicaid expansion would work. Hardaway also wondered — as have said many lawmakers — just what guarantees there are that the hospitals won’t pass along new Medicaid expansion costs to patients.

Casey Dungan, TennCare’s chief financial officer, said the state has “a firm commitment” from the Hospital Association who believes that use of the assessment “will be sustainable for the foreseeable future.”

Dungan added that hospitals see a benefit in participating in this program because of an ongoing issue with “a reduction in uncompensated care payments that hospitals have received through the federal government.” Looking forward, the hospitals “see it’s in their best interest to try to provide this coverage,” he said.

Kelsey: Emergency Room Visits Up as a Result of Obamacare?

State Sen. Brian Kelsey, chairman of the Senate Judiciary Committee and an outspoken critic of Medicaid expansion in Tennessee, said there’s been suggestions from other states that Medicaid expansion hasn’t resulted in fewer unnecessary emergency room visits, as promised when Congress was deliberating the Affordable Care Act.

Taylor acknowledged that he, too, has has heard ER visits are on the rise. He said, though, that the proposed $8 copay for using emergency care would make a difference, because it would make people think and be “better consumers.”

Addressing the inessential-emergency-room-visits issue is one reason the governor’s not proposing a traditional Medicaid expansion, said Dr.  Long.

“In addition to the co-pays associated with that, we also envision that in the Healthy Incentives account, we will incentivize and reward individuals who do not use the emergency department inappropriately.”

Mark Cate, Gov. Haslam’s chief of staff, said the governor’s office was “very familiar” with the study, and that was “exactly why” they were pushing for their specific version of Medicaid expansion. “We’ve got to be moving in a direction that actually sees outcomes that are healthy outcomes.”

Cate also stood behind the $8 co-pay for ER use as “a start,” because to the population being affected “$8 is a big deal.”

Kane: Where is Hospital ‘Assessment’ Coming From?

Knoxville Republican state Rep. Roger Kane questioned the panel about who’s paying the hospital assessment fee that the state Hospital Association proposed increases in to cover any state cost incurred in expanding Medicaid. He asked if it was the insured who were paying that cost.

“The assessment is levied against total patient revenue” and the hospital pays that, said TennCare’s Dr. Long.

Kane — who said the insured or those paying cash were “obviously” the ones paying the assessment — asked Long where the money raised by the fee was currently being used, and if those programs being paid for by it would “cease to exist.”

Long said there was language in the assessment that “prevents it from being passed on to patients,” and what the assessment should be used for is determined when it’s passed each year by the General Assembly. And the state has room to raise that assessment fee to bring in additional revenue to cover Insure Tennessee.

The current assessment rate is 4.52 percent, and the hospital industry can determine — with the Legislature’s approval — what the rate should be set at each year when they bring the bill, explained Will Cromer, the governor’s director of policy. The federal cap on the assessment fee is currently 6 percent.

Kane also questioned how a Supreme Court decision finding the subsidies are unconstitutional would affect the governor’s plan.

Cromer said while he can’t anticipate how the Supreme Court will decide on the matter, he didn’t believe the issue they were deciding was “related” to the Insure Tennessee proposal.

Dunn: Can We Get Obama’s People Down Here?

Cate, the governor’s chief of staff, said the Obama administration has offered to have someone with authority from HHS come down to Nashville and appear before Tennessee’s legislative body and explain the verbal agreement if lawmakers would like

Rep. Bill Dunn, a Knoxville Republican, said for good reason a lot of people don’t trust the federal government. An opportunity to question a well-placed Obama administration official could help allay the fears of some legislators. Otherwise, if the feds go back on their word, the blame will come back on the Haslam administration, potentially making it look like they’ve misled the Legislature, said Dunn.

Will Insure Tennessee Drive Up National Debt?

State Sen. Kerry Roberts, R-Springfield, asked members of a panel of Haslam administration officials if the federal dollars associated with the “Insure Tennessee” proposal and Medicaid expansion were earmarked from the extra taxes paid by Tennesseans as a result of Obamacare. If not, Roberts asked, Would the money Tennessee spends in fact increase to the national debt, which stands at about $18 trillion?

Cate said it’s not likely the money’s been earmarked. “There’s not a bucket that says ‘This is Tennessee’s bucket’ and it’s just sitting there,” he said. But the state is already being taxed and this gives them the opportunity to take that money and help “correct some of the health care system issues that we have.”

Will Cromer, Haslam’s director of policy, said one of the biggest issues with the ACA was that it didn’t address cost, and the administration feels like they’ve “got to have this payment reform” to address the cost issue.

As to the issue of whether or not Insure Tennessee would increase the debt, Cate said they can’t “answer that definitively either way.”

‘Healthy Behaviors’ Incentives in Insure TN Explained

Initially, “Insure Tennessee” aims at instituting incentives to encourage more responsible patient behaviors by providing credits for actions such as finding a primary care physician, going for physicals, taking a health risk assessment, not utilizing the emergency room during a previous six-month period and other basics, said Long.

She added that they would also add targeted incentives as the state gets “more sophisticated with the model.”

Individuals won’t be dis-enrolled for not participating in incentivized activities, but they also won’t gain any credits to help offset co-pays, Long said.

Future of ‘Insure TN’ Beyond 2-Year Pilot Program Discussed

Rep. Tilman Goins, a Morristown Republican, wanted to know what happens after the two-year pilot program for “Insure Tennessee” is complete.

Long replied that they’ve already used actuaries to develop projections already, and those actuaries used information from states who have extended their Medicaid coverage, as well as information from the state’s own TennCare enrollees.

“So, I think we have very educated projections at this point in time, but after two years and having projections that we’ll be able to make on actual experience, I think that would be something that actuaries… would be very comfortable with,” Long said.

One reason Haslam’s administration offered up a two-year pilot program is so the governor will still be in office and would himself — not a predecessor —  bear “the burden” of making the decision to get out of the plan. Cate also assured them that they have complete oversight, and even if the governor thinks the program is successful, the legislature will have the final say on whether it continues or not.

Holt Doubts Haslam’s Medicaid Expansion Will Encourage Personal Responsibility

Andy Holt, a Republican state representative from West Tennessee, isn’t convinced the Haslam administration’s plan for expanding federally funded Medicaid is actually going to encourage more responsible personal behaviors on the part of those receiving the subsidies.

Officials for the state-run agency that administers Medicaid in Tennessee say that roughly 46 percent of the 300,000 or so likely to seek the government-financed health coverage are unemployed — and many may have mental problems that prevent them from holding down jobs.

Cate promised that the Haslam administration’s “Insure Tennessee” proposal is designed to encourage “healthier outcomes” among low-income populations. One of the goals is that they gain employment “and have private insurance.” “We are only going to get where we need to be in running government programs if we can try some of these things out, and show that they can work,” said Cate, referring to the various incentives within the governor’s “Insure Tennessee” proposal that the administration says will encourage more personal responsibility.

Cate said the goal is to apply the incentives that they’re planning for the Medicaid expansion population to the state’s traditional TennCare population as well, if they prove successful.

Holt indicated he’s pretty skeptical about the whole thing.

“I don’t see a track record where typically government gets involved and they have that type of success,” he said. “Typically, when we give something away, at no cost, it is over-utilized and undervalued, just like any commodity. And I actually believe we are in a process of leading people to more government dependency and less independency for themselves. Ultimately, when people are more dependent, they are less accountable to themselves and to others.”