August 14, 2006
Lessons From Tennessee's Medicaid Waiver Program
By Faye Frey
Nashville Bureau for NCSL
NASHVILLE – Legislators and legislative staff learned lessons Tennessee’s experience with its "unstustainable" Medicaid waiver program TennCare during the National Conference of State Legislatures’ 2006 Annual Meeting.
Launched in 1994, TennCare was unique in at least two ways: It covered families who either had no access to group insurance or individuals who were “uninsurable” because of medical conditions. The program shifted virtually all enrollees into managed care. At its height, TennCare covered 23 percent of the state’s population.
As years passed, costs continued to grow until the program became, in the words of Gov. Phil Bredesen, “unsustainable.” The state reduced benefits and dropped some 200,000 adults from the rolls. Today, TennCare continues to restrain costs while improving the quality of care by adopting such mechanisms as disease management.
The session, "Critical Health Topics: Lessons from Tennessee," reviewed the transition from the original TennCare model to the current network of safety net programs. Panelists took a forward look at the state’s Medicaid program and examined the lessons learned in the areas of workforce, substance abuse and mental health services, and disease management. They were:
Registered nurse Susan Cooper, director of Tennessee’s Health Care Safety Net;
Richard H. Dougherty, Ph.D., president of DMA Health Strategies in Massachusetts; and
David Hollis, M.D., the chief medical officer of XL Health’s Tennessee Chronic Care Improvement Program, now known as the Medicaid Health Support Program.
Cooper, of Tennessee's Health Care Safety Net, kicked off the session. She listed the pitfalls TennCare faced in its 12 years: changes in leadership, court decrees, insolvency of three managed care plan operators, diminishing funds from the federal government, and escalating pharmaceutical costs. Between 2001 and 2005, prescription drug costs tripled. This, she said, was the final straw that “broke our backs.”
Today, Cooper oversees “Cover TN,” a partnership between the state and private employers to offer guaranteed, affordable, portable, basic health coverage for working uninsured Tennesseans.
Cooper also discussed other forms of health coverage put in place by the Bredesen administration, including Cover Kids SCHIP program that was not part of the 1994 Waiver; AccessTN, which is a high-risk insurance pool that provides health insurance coverage for seriously ill adults who have previously not been able to obtain private insurance coverage; and, Project Diabetes, a program to teach students from kindergarten through eighth grade about healthy lifestyles and to expand options to reduce Type II diabetes and obesity.
Cooper encouraged states to focus on primary care, rebuilding its infrastructure and using donated-care models like faith-based clinics and federally qualified health centers (FQHCs). Cooper also stressed the importance of wellness programs and disease prevention.
Dougherty, of DMA Health Strategies, talked about the need for change within states’ mental health systems. He reviewed the turbulent history of mental health services under TennCare, which focused on drug treatment rather than rehabilitation. The effects of not treating substance abuse as a social problem significantly increases health care, criminal justice and child welfare costs, he said.
Dougherty advised attendees to look to Massachusetts and New Mexico as good examples of how to change mental health treatment.
Hollis, of the Medicaid Health Support Program, discussed the “tremendous impact” of chronic disease on both patient health and the costs to Medicaid and Medicare. He said studies show tht patients enrolled in disease management programs report fewer hospital admissions and bed days, improved medication adherence, dietary improvements, increased activity levels, and greater satisfaction with care. Cost savings were also evident.
Hollis noted that chronic diseases drive a huge portion of Medicaid spending. Dual eligibles (patients who qualify for both Medicare and Medicaid) are particularly difficult to manage because of complexities in the financing system. Disease management offers opportunities to genuinely reduce costs and improve quality. States can leverage Medicare disease management programs that use federal dollars to manage Medicaid expenditures.
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This summary is provided for information purposes only. NCSL does not endorse any views it contains.
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