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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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Health Care NewsTracker

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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Press Releases

SPLC, Others File Federal Lawsuit Against TN Over TennCare

Press release from the Southern Poverty Law Center; July 23, 2014:

Earlier this year, a high blood pressure episode put April Reynolds in the hospital. In fact, doctors told the mother of three that she could have died if she had waited any longer to seek medical treatment.

Reynolds put off going to the hospital because she didn’t have a way to pay for medical treatment. She had been trying to get coverage through Tennessee’s Medicaid program, but the state’s policies have deprived thousands of people like her the coverage they need even though they are eligible.

Now, Reynolds owes $20,000 in medical bills and needs monthly checkups. But she has been to the doctor only once since the episode because she’s afraid of accruing more debt.

Today, the SPLC filed a federal class action lawsuit against Tennessee for adopting policies that break its decades-old promise of health care to Reynolds and other vulnerable residents.

“Tennessee officials are sacrificing the health of the state’s most vulnerable citizens just to score political points,” said Sam Brooke, SPLC staff attorney. “They’re throwing a monkey wrench into their own Medicaid program so they can demonize the federal government. People in dire need of medical care are being sacrificed.”

The lawsuit was filed in the U.S. District Court for the Middle District of Tennessee in Nashville. The complaint, which was also brought by the Tennessee Justice Center and the National Health Law Program, comes on the heels of a scathing letter the Centers for Medicare and Medicaid Services sent to state officials for failing to meet six of seven critical success factors required by federal health care law – easily making Tennessee the worst state in the nation for fulfilling its Medicaid obligations.

According to the lawsuit, the state has violated federal law by discontinuing in-person help for applicants to its Medicaid program, TennCare. Instead, Tennessee forces applicants to apply for TennCare through the federal Health Insurance Marketplace website, which was not designed for this purpose, causing some residents – including those with serious medical conditions – to go needlessly without health care. To make matters worse, the state has stopped accepting TennCare applications in person.

Under federal law, an application for Medicaid must be processed in 45 days. The decisions Tennessee has made have resulted in many applicants – including all the plaintiffs in this case – being forced to wait more than two or three times the maximum period, with serious consequences.

“I have to worry every day about how my blood pressure is doing, which just escalates the problem,” Reynolds said.

The state also is arbitrarily terminating coverage for newborns after they are carried out the hospital door – a direct violation of regulations governing its state child health plan, “CoverKids.” Many newborns are now left without medical coverage during one of the most critical periods of their lives.

One plaintiff in the lawsuit is a baby identified as “S.G.,” who was born two months premature. He was born into CoverKids coverage, but Tennessee revoked it the moment he left the hospital. S.G. has not had coverage since leaving the hospital.

As a premature child, S.G. is at high risk of contracting the potentially fatal respiratory and airway virus RSV. He requires monthly shots – at $3,000 each – to prevent this illness. His parents can’t afford the treatment.

The changes that have deprived Tennesseans of coverage began in the fall of 2013 when the state ended in-person assistance for residents applying for TennCare, removing an important service that helped them navigate the application process. The state decided instead to make the federal Health Insurance Marketplace website, established under the Affordable Care Act, the only means for applying for TennCare, leaving many residents without coverage because the site cannot determine eligibility for individuals falling within certain categories.

As for Reynolds, she hopes the lawsuit will make the state live up to its promise to provide vulnerable residents with the health care they need.

“It would be such a burden off my shoulders,” she said. “It would make life a whole lot better. I think I’d live longer.”