TennCare officials told lawmakers earlier this week they have no choice but to initiate significant cost-savings measures to the state’s Medicaid program.
The planned program-reductions include capping annual in-patient hospital-stay reimbursements at $10,000, and limiting the number of lab and X-ray services a person can seek per year at eight.
“We tried to put forth as best recommendation we can under an incredibly ugly set of circumstances,” TennCare Director Darin Gordon told the legislature’s TennCare Oversight Committee. “The alternative would be cutting direct services to offices and hospitals, and I’ve already gone into that well fairly deeply.”
Gov. Phil Bredesen has said there’s little alternative but to trim around 9 percent, or about $201 million, from of TennCare’s budget to balance the state’s books in the coming fiscal year. The agency is trying to reduce its total state-and-federal budget from about $7.6 billion to $6.8 billion.
Gordon said the decisions as to what to cut have been based on trying to “affect the least amount of people.” None of the proposed cuts would affect children or pregnant women, which he said make up the majority of the program’s enrollment, he said.
The proposed cuts could be softened somewhat by a federal Department of Health and Human Services decision last week to re-work a formula used to determine how much money the state owes the federal government in “clawback” funds, which are reimbursements for prescriptions by certain people in the program.
“It equates to about $120 million,” Gordon said. “I’ve already shot off a recommendation to the governor on how to appropriate those funds.”
Lawmakers nonetheless expressed concern that the cuts are going to hit many Tennesseans hard at a time when TennCare enrollment is increasing as a result of the prolonged recession. Scott Pierce, TennCare’s chief financial officer, said there were a few months last summer during which the program grew by over 8,000 enrollees per month.
Tennessee is not alone in its struggles with its Medicaid program. According to Gordon, 43 states have already implemented reductions in the program.
A Kaiser Foundation study found that “nearly 3.3 million more people (in America) were enrolled in state Medicaid programs in June 2009 compared to the previous June. It was the biggest ever one-year increase in terms of absolute numbers, and boosted the June monthly Medicaid enrollment by 7.5 percent to 46.9 million people nationally.”
Another TennCare cost-cutting proposal on the table, a potential 7 percent reduction in reimbursements to health care providers, is going potentially put some of them out of business, said Sen. Charlotte Burks, D-Monterey.
“Then my people are going to do without hospitals,” said Burks.
Dr. Wendy Long, TennCare’s chief medical officer, said the agency has already done all it can to reduce costs in other areas, including closer case management for patients, more pharmacy controls, and an increased emphasis on the prevention and detection of fraud and abuse.
“It’s not going to create immediate budgetary reductions we need to balance this year’s budget, but they are very important to minimize expenditure growth over time,” she said.