With proposed reimbursement rates less than those offered under the old TennCare system, Gov. Phil Bredesen's new CoverTN proposal is turning out to be a tough sell among Tennessee's hospitals and health systems.
Neither Mountain States Health Alliance nor Wellmont Health System signed on to the program before the Feb. 15 provider deadline last week, meaning that if CoverTN moves forward with its current structure, patients on the program would not be able to get coverage for care at most Northeast Tennessee hospitals.
In an e-mail sent to a handful of state legislators earlier this week, MSHA President and Chief Executive Officer Dennis Vonderfecht explained, "MSHA applauds the focus of the administration on the problem of the uninsured in the state of Tennessee; however, MSHA at this time does not feel that CoverTN is adequate coverage for the uninsured or adequate reimbursement for providers."
CoverTN is only one part of the governor's five-part health coverage plan dubbed "Cover Tennessee." The other four portions are CoverKids, providing comprehensive coverage for children; AccessTN, providing comprehensive coverage for "uninsurable" adults; CoverRx, providing affordable medication to low-income and uninsured residents; and project diabetes/coordinated school health, focusing on disease prevention.
MSHA and other providers across the state are already on board with most of the components of Cover Tennessee. The plan in question is CoverTN, which would provide basic health coverage to any Tennessean who has been without health insurance for at least six months in a row. The proposed premiums for CoverTN are low, but so are the benefits, which makes the plan unattractive to providers like MSHA.
"Hospitals and doctors are not signing up for this program ... because the reimbursement rate is less than TennCare," said state Rep. Matthew Hill, R-Jonesborough. "That's just unacceptable. You can't expect to create a network of providers with a reimbursement rate that is less than TennCare. We all know about TennCare's sordid past when it comes to reimbursement rates."
According to Marvin Eichorn, MSHA's senior vice president and chief financial officer, CoverTN would reimburse about 60 percent of what it costs the hospital to provide care for enrollees, which is about the same rate as TennCare. The difference, Eichorn said, is in the duration of the benefit.
"There's a per-person cap on how much the plan is going to spend on you for the year, and once you reach that, you convert right back into being basically a self-pay patient," he said. "If you're with TennCare, we don't get paid very well, but as long as that person is in TennCare ... then we're at least going to get paid whatever our rate is."
According to state documents, the options offered under CoverTN would cover $10,000 or $15,000 of hospital expenses, depending on which plan a patient chose.
"If you have an individual with any acute problems ... it's going to eat through that money if you stay longer than two days in the hospital," Hill said.
Hospital officials also worry that the low premiums of CoverTN might entice employers to drop more comprehensive coverage, compounding the reimbursement crisis across the state.
"We are fearful that this program will be a repeat of the TennCare program, only worse," Vonderfecht wrote in his e-mail. "We are ... concerned that we will see a repeat of the TennCare experience with insured individuals and companies dropping their insurance, going ‘bare' for the required six months, and then enrolling in CoverTN. We saw this happen with the TennCare program."
When thousands of Tennesseans were removed from the TennCare rolls in 2005, health care officials across the state feared that the rate of self-pay patients would rise sharply, putting strain on hospitals. What they found instead, however, was that when the state stopped providing low-cost options, more residents obtained commercial insurance, either on their own or through employers, MSHA officials said.
"For MSHA, we have found that approximately half of our former TennCare patients that were disenrolled have found commercial insurance coverage, and for those who worked, that percentage is probably even greater," Vonderfecht wrote.
Vonderfecht expressed frustration in his letter that hospital officials were not asked by the state to be involved in the creation of the CoverTN program.
"Now we're sort of left on this side of it, saying, ‘We're not willing to sign up, and here are the reasons why,'" Eichorn said. "You're sort of left on the back end giving your views of it versus somebody involving you on the front end and at least giving you the chance to provide some input."
Hill is not surprised to find that providers are unwilling to participate in CoverTN.
"I did not vote to create Cover Tennessee, and this is one of the reasons why," he said. "You can look ahead, and last year you were able to see that the administration just didn't have the details worked out and weren't able to answer questions."
Both MSHA and Wellmont officials said Thursday they are continuing discussions with the state about how CoverTN might be changed to become more attractive to providers in the state.
"With a tweak here and a tweak there, I think we would strongly consider signing up for this thing," Eichorn said. "We certainly haven't given up on it, and we certainly haven't closed the doors for discussion."
Cover Tennessee officials could not be reached for comment Thursday.