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Judge Orders TennCare Eligibility Hearings

A federal judge has ordered state TennCare managers to hold hearings for Tennesseans who, because of application processing delays, have spent months waiting to find out if they qualify for taxpayer-finance health coverage.

U.S. District Court Judge Todd Campbell issued a preliminary injunction Tuesday — effective immediately — in a lawsuit against Tennessee’s Medicaid services agency that required the department to halt its refusal to provide hearings about delays in eligibility determinations within a certain number of days after one is requested. Those making the request have to prove that they have not learned the outcome of their application within 45 days if eligibility is based on income, while those seeking eligibility for a disability have to wait 90 days.

The lawsuit was also upgraded to class-action status.

“TennCare is committed to operationalizing the Judge’s Orders at this time,” TennCare spokesman John Goetz told TNReport Wednesday in an email.

The lawsuit was brought in July by the Southern Poverty Law Center, the National Health Law Program and the Tennessee Justice Center on behalf of several Tennesseans who felt their applications for assistance were not being heard in a timely enough manner, and that the state was not providing proper in-person assistance for applicants, instead sending them to the federal exchange.

The suit was filed shortly after the federal Centers for Medicare and Medicaid Services sent a letter to the state alleging it had failed to meet several of the requirements of the Affordable Care Act.

In his order, Campbell wrote that injuries suffered by the would-be TennCare enrollees “cannot be made whole by a retroactive award of money after the litigation process is complete.”

“The plaintiff class members are economically impoverished and, without TennCare benefits, have forgone or are forgoing vital medical treatments, services and prescriptions,” the judge added.

Tennessee Gov. Bill Haslam recently brushed off criticism that the state’s been dragging its feet signing up qualified applicants. Enrollment in 2014 is on record pace for the 20-year-old program’s history, the governor indicated.

One of TennCare’s attorneys argued that because of the issues the state has been having with getting its new eligibility system online, they had been given permission to send Medicaid applicants to the federal exchanges, and federal officials had failed to send necessary information to them about the plaintiffs that would help them process the applications faster.

Darin Gordon, the head of the agency, appeared before the General Assembly’s joint Fiscal Review Committee last week, and explained that Northrop Grumman — the company who won the bid to produce the system — was very much behind deadline, and the state had contracted with a third-party auditor to determine how much longer it would take for them to produce the necessary system.

However, Campbell wrote in his order that he was not persuaded that “the State can delegate its responsibilities under the Medicaid program to some other entity – whether that entity is a private party or the Federal Government.”

If a state decides to participate in Medicaid, “it is required to ensure that applications are adjudicated reasonably promptly and that hearings on delayed adjudications are held reasonably promptly,” Campbell continued in the injunction.

Additionally, according to the order, the federal government filed a “Statement of Interest” in the case, which said that TennCare “at all times retains the ultimate responsibility to ensure that a reasonably prompt decision is made on applications, including ones that have been submitted in the first instance to the federally facilitated Exchange in the State.”

Michele Johnson, executive director of the Tennessee Justice Center, said in a press release that her organization is “jubilant” that “vulnerable Tennesseans will now get the care upon which their lives and futures depend.”

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TennCare Computer System’s Completion Date Still Unknown

Although he won’t speculate as to when the state’s new TennCare computer system will be completed, Darin Gordon, the program’s director, told members of the General Assembly he hopes a planned third-party audit will provide that answer.

Gordon gave testimony Tuesday to the Joint Fiscal Review Committee on the progress, or lack thereof, of the Northrop Grumman Corporation in developing the new “Tennessee Eligibility Determination System” for TennCare.

Tennessee has so far paid Northrop about $4.7 million of the $35.7 million it committed to the cybersecurity contractor in December of 2012, when they signed a three-year contract to develop the new system made necessary by the Affordable Care Act, Gordon said.

TEDS was supposed to go live in October 2013, and Northrop was last paid in January, Gordon added.

There are four “different tools” for the agency to ensure contractors comply with contract stipulations: penalties, liquidated damages, withholds and non-payment, in order of weakest to strongest. “We’re using the biggest tool that we have at this point to make sure that everybody is properly motivated to getting to where we want to be,” Gordon said.

Gordon said that Northrop, one of five firms to bid on the contract, made the lowest bid to produce the system. The next lowest was for $58 million, with the highest bid coming in at $109 million.

Wyoming, one of the other states to use Northrop to produce their system, is also “having challenges,” Gordon said.

Gordon told the committee that he had no idea as to when the system would be completed, because he’s “lost confidence in people’s ability to accurately predict” a timeline for completion.

Northrop is currently 99 percent done with its systems integration testing, the second phase of its five phases of implementation — but that doesn’t mean that phase is nearly done, Gordon said, because when issues with testing arise, developmental changes need to be made and the phase “can be at 99 percent for a longer period of time.”

The company is also about 80 percent complete with its third phase — user integration testing, but can’t start on the last two phases until the others are completed, Gordon explained.

“These are complex systems, there’s a lot of working in a very tight time-frame, and we want to make sure that what we do turn on, works,” Gordon said.

On Aug. 18, TennCare signed a no-bid contract with KPMG, an audit and advisory services firm, to run a 14-week audit of Northrop’s progress at a cost to the state of $1.2 million, Gordon told the committee. That report is expected to be ready sometime in late November or early December.

Following Gordon’s testimony, the committee also approved an extension of a contract with Policy Studies, Inc., the contractor who provides eligibility determination and processes application for the state’s children health insurance program. The contract, which is being extended through Dec. 2015 as a result of the delay in implementing TEDS. The contract extension is eligible for a 75 percent federal match.

The total cost to the state of the delay in getting the computer system on-line is not currently known, Gordon said.

The failure in bringing the new system online is one reason that TennCare is facing a lawsuit from the Southern Poverty Law Center, the National Health Law Program and the Tennessee Justice Center on behalf of several Tennesseans who have allegedly been denied coverage, though they claim eligibility.

“These system failures have serious impact on vulnerable Tennesseans and the health care infrastructure we all reply upon. It’s time for the state to spend less time blaming others and more time managing problems that have devastating consequences for our state,” said Michele Johnson, executive director for the TJC, in an e-mail.  Tennessee’s “lack” of a TennCare enrollment process “makes us unique in the nation,” she added.

The TJC filed the lawsuit because despite having met with TennCare officials since October of last year, “at some point it became clear that their willingness to problem-solve was not there,” and the Tennesseans they represent “couldn’t wait any longer,” Johnson told TNReport Wednesday.

Gordon was questioned by state Rep. Brenda Gilmore, a Nashville Democrat, about whether anything was being done to help hospitals cope with financial problems stemming from the inability to process emergency Medicaid applications because of the delay in TEDS implementation.

Gordon told Gilmore that because of the pending litigation the only information he could give was already included in his response to the federal Centers for Medicare & Medicaid Services, or in the briefs filed in the lawsuit.

However, the Gordon assured Gilmore that TennCare is in contact with the Tennessee Hospital Association “pretty much every week.”

Johnson told TNReport that she “thought it was interesting” the administration continued to say they couldn’t comment on anything related to the lawsuit because government agencies are required to “answer questions that the legislature has for their constituents.”

The next hearing in the federal case is scheduled for Friday.

Gordon noted to the committee that although TennCare has appeared before the legislature in the past, it wasn’t a result of computer system problems.

“Every state in the country all started from different starting points,” Gordon said. “Some had some modern technology already in place, and only had to adapt that technology to the new requirements. Other states, such as ourselves, had to start from scratch because our system was an old legacy system not capable of handling the changes that would be necessary to comply with the ACA.”

Additionally, the changes required by Obamacare have been “some of the most complicated” for the system since it began, Gordon explained.

Several other states — such as California’s backlog of hundreds of thousands of enrollees, or Oregon’s broken website and over-taxed Medicaid rolls — have had their own problems in developing a working system, Gordon said.

“These are complex systems, and are being implemented on a very quick runway, and so I think, if you look across the country, a lot of folks have had challenges with these,” Gordon said.

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Haslam: TennCare Signing Up Lots of New Enrollees

The Volunteer State’s Medicaid program, TennCare, has been criticized by the Obama administration for not providing enough assistance to seekers of government aid under the Affordable Care Act.

But Gov. Bill Haslam this week defended the program, which enables lower-income residents to obtain taxpayer-financed health insurance and medical care. He said the number of Tennesseans finding their way on to TennCare’s rolls is on record pace.

“I think it’s worthy of note, we’ve signed up more people for TennCare this year than we ever have in the history of the program since it originated,” Haslam told reporters following an event to promote his new free-community-college program.

Actually, the governor’s estimates may be stretching it some. But 2014 does indeed appear so far to be tracking among years with the highest number of new sign-ups, John Goetz, a spokesman for the TennCare program, told TNReport in an email.

First-quarter TennCare signups this year were “the third highest in the 20-year history of the program,” wrote Goetz.

Dave Smith, Haslam’s spokesman, told TNReport by email that the governor had in fact “combined two stats: the number of new enrollees added in the first quarter was the highest in at least the last four years and the third highest in the 20-year history of the program.”

According to numbers pulled about three weeks ago, TennCare added 67,411 “new enrollees” to the program in the first quarter of 2014. The program enrolled 57,737 in the first quarter of 2013, 60,325 in the first quarter of 2012 and 62,065 in the first quarter of 2011.

TennCare was criticized by the federal Center for Medicare and Medicaid Services in late June for failing to provide aid and services required under the Affordable Care Act.

The Haslam administration was told by the Obama administration to quickly develop plans for getting its still-under-construction computer system online. In the meantime, the feds want Tennessee to establish a more adequate temporary enrollment process for hospitals to sign people up for government-funded insurance.

The feds claim that in wake of ACA implementation, Tennessee stopped providing personnel to help people sign up for TennCare, and instead began directing them to use the federal health care exchange at healthcare.gov — which has had problems of its own.

TennCare officials don’t see things in quite the same light.

The director of the state’s Medicaid program, Darin Gordon, sent Cindy Mann, federal director of Medicaid, a 16-page letter saying Tennessee “must respectfully disagree” with much of the Obama administration’s criticisms. Gordon’s letter asserted that in every county in Tennessee a TennCare agent is on duty and available for face-to-face meetings with potential aid-recipients to help them negotiate the complexities of state-and-federal Medicaid bureaucracy.

As for the state’s computer system, Gordon said that Northrop Grumman, the company who won the contract to produce the computer system, has missed several deadlines. Gordon added that while TennCare will continue to work toward “successful implementation” of the system, they would not “go live with a system that has not been adequately tested.”

The letter did include an “updated mitigation plan,” but Gordon also wrote in the letter that it was only an “interim solution pending completion” of a new computer enrollment system.

TennCare is also being sued by the Southern Poverty Law Center, the National Health Law Program and the Tennessee Justice Center on behalf of several Tennesseans who say they were illegally denied coverage.

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Medicaid Expansion’s 5-Year Price Tag: $200 Million

An expansion of taxpayer-financed health insurance for the poor as prescribed by Obamacare would cost the state nearly $200 million through 2019, the state’s top TennCare official said this week.

And in each year after that, the expansion would cost $100 million or more, TennCare Director Darin Gordon said during a state budget hearing for his agency. The Haslam administration is deciding whether to enlarge the state’s Medicaid program by lifting eligibility to as high as 138 percent of the poverty level — or about $31,800 for a family of four.

The administration is also weighing whether the state should run its own insurance exchange, an online comparison tool to buy and receive subsidized health insurance, or allow the federal government to run an exchange for Tennesseans. The deadline to decide is Friday.

Both questions stem from the Patient Protection and Affordable Care Act, signed into law two years ago. Its major provisions kick in in 2014, but states are in the process of planning implementation now.

The question of state-based or federal exchanges largely turns on whether the state wants to retain control over what plans would be on the menu and the costs of administering the exchange, though officials said questions still surround the nuts-and-bolts requirements for an exchange.

Under a federal exchange, “they’re going to decide what the offering is,” Gov. Bill Haslam said, “so they could have the ability to just pick the national insurers, the six or seven folks that offer national coverage. And regionals and everybody else would never be on the menu.”

Beyond health care reform, Gordon outlined $164.8 million in cost increases to state taxpayers for fiscal year 2014. More than two-thirds of that amount is based on inflation and expected enrollment in TennCare and CoverKids, a state health insurance program for children 18 and younger.

This year, the Health Care Finance and Administration agency has a $9.6 billion budget, with $3.05 billion coming from state taxpayers. The agency oversees TennCare and certain other health insurance-related programs.