TennCare officials are eyeing what providers call "devastating" cuts to benefits that include rehab services and inpatient hospital care, all in an effort to meet state-mandated budget reductions.
"These are painful decisions that are having to be made," said Kelly Gunderson, spokeswoman for TennCare, the state's Medicaid program. "In normal circumstances, these are (benefits) we would not be touching."
The TennCare Bureau is seeking approval from the U.S. Centers for Medicare and Medicaid Services for the cuts, which would save the state $117 million in the fiscal year that begins July 1.
Declining revenues forced state-mandated cuts for all agencies, state officials said. The budget restrictions, paired with a 4.5 percent increase in TennCare enrollment, mean that bureau officials are seeking to trim $350 million from next year's budgeted expenditures, Ms. Gunderson said.
The proposed changes, most of which would not affect pregnant women and children, include a $10,000 annual cap on inpatient hospital and psychiatric hospital services; elimination of physical therapy, occupational therapy and speech therapy coverage; elimination of hospice care; and an annual limit of eight doctor's office and nonemergency hospital visits.
Those limits would almost certainly be exceeded by those with chronic conditions such as cancer that require repeated medical treatments, Rae Bond, executive director of the Chattanooga and Hamilton County Medical Society, said.
TennCare providers, already stretched financially, will face more losses for providing care, she said.
"Who's going to be responsible in the cases when patients reach their limit but continue to have health problems?" she said.
Budget Still Not finalized
Providers are holding out hope that the proposed reductions could be avoided if extra funding is freed up in the next few months. The final state budget likely won't come until later this spring.
"We're trying not to get down into that doomsday scenario," said Jim Brexler, CEO of Erlanger hospital, the area's safety-net hospital.
He noted that a single admission for a trauma patient would likely exceed the proposed $10,000 cap on inpatient hospital services.
Federal economic stimulus money allowed TennCare to delay the bulk of a mandated 15 percent cut in the current fiscal year, including a 7 percent decrease in TennCare reimbursements to doctors. That payment cut is now scheduled to go into effect July 1, Ms. Gunderson said.
Craig Becker, president of the Tennessee Hospital Association, said before making these cuts, alternatives such as using money from the TennCare reserves should be considered.
"That's what it's there for," he said. The reserve fund totals about $350 million.
The proposed cuts to rehabilitation services would be "devastating," and would hurt the state budget in the long-term, said Bob Main, president and CEO of Siskin Hospital for Physical Rehabilitation.
Rehab not only improves patients' quality of life, he said, it helps get patients back into the workforce and keeps them financially independent.
"The state doesn't really care about people getting back into the workplace and having a productive life," Mr. Main said.
Parkridge Valley Hospital CEO Brennan Francois said that while few patients would ever reach the proposed $10,000 cap on inpatient psychiatric hospital care today, the proposed limits to outside support services could result in more patients needing hospitalization.
"If we're not consistent with our medication and the support that is necessary for helping people maintain their treatment plan, that a lot of times leads to a crisis situation," he said.
PROPOSED TENNCARE CUTS - graphic
If approved by CMS and included in the fiscal year 2011 budget, these changes would go into effect July 1 and save the state $117 million in the fiscal year. (Populations who are excluded from the limits are noted in parentheses.)
* Implement a $2 copay on nonemergency transportation (pregnant women and children excluded)
* Impose annual limit of $10,000 per person on inpatient hospital and inpatient psychiatric hospital services (pregnant women and children excluded)
* Limit nonemergency visits to outpatient hospitals to eight, per person (pregnant women and children excluded)
* Impose annual limit of eight physician office visits per person (pregnant women and children excluded)
* Limit lab and x-ray services per person to eight occasions (days) (pregnant women and children excluded)
* Eliminate coverage for occupational therapy, speech therapy and physical therapy (children excluded)
* Eliminate hospice care, though patients still would get medical care such as pain management (children excluded)
Source: TennCare Bureau