Summaries of health policy coverage from major news organizations
TennCare Signs Three Plans To Replace BlueCross, but Critics Fear New MCOs Lack Clout
TennCare, Tennessee's Medicaid managed care program, has contracted with three new managed care organizations in preparation for an impending
pull-out by BlueCross BlueShield of Tennessee, which currently covers roughly half of the program's 1.3 million enrollees, the Nashville Tennessean reports. Last December, BlueCross, the state's largest insurer, announced it would leave the program, citing projected losses of $80 million. The addition of the three new MCOs -- Better Health Plans Inc., Healthcare Solutions of Tennessee Inc. and Universal Care of Tennessee -- "means that we're going to have nine managed care organizations in Tennessee," TennCare spokesperson Lola Potter said, adding that all three plans "have experience in managing care for the Medicaid population." But some "advocates for
low-income enrollees" fear that the new MCOs, all of them smaller plans, will not together maintain the purchasing power and broad provider networks that BlueCross could provide the program. "The idea was that TennCare would recruit large national players and that those would fill the void left by BlueCross," Gordon Bonnyman of the "watchdog group" Tennessee Justice Center said. But, Bonnyman added, "[T]hree small plans is not the equivalent to one large plan. ... You can do the math and say you've got three plans that can do 200,000 a piece and say that adds up to 600,000. It's not the same" (Johnson, Nashville
Tennessean, 11/22). State officials have also been negotiating with Edina, Minn.-based United HealthCare, a national insurance company with experience managing care for Medicaid populations in several states. But Potter said Nov. 21 that those discussions have "stalled" because United is only willing to participate in TennCare if the state assumes "90% of the risk" after a certain level of medical expenses is reached. Such an arrangement would "all but make United an administrative services organization," responsible for processing claims and operating provider networks but with little of the financial risk associated with managing patient care, the Chattanooga Times & Free Press reports. Potter said, "We weren't prepared to do that," explaining that allowing such a contract for United would have forced the state to "reopen the procurement process with our other MCOs, and that wouldn't have been financially smart for the state." BlueCross is expected to leave TennCare on June 30, 2001 (Commins, Chattanooga Times & Free Press, 11/22).
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