At the start of February, specialists who treat TennCare patients will face a 14 percent rate cut that has some doctors thinking about leaving the TennCare program.
"We just can't keep going on," said Dr. Paul Brundage, gastroenterologist in Cleveland, Tenn.
He said this cut from Volunteer State Health Plan, a division of BlueCross BlueShield of Tennessee, will likely force him to stop taking TennCare patients, who have very few - if any - other options for gastroenterology services in Cleveland.
"I would like to do something to help my fellow man here and they're making it very, very difficult," he said. "Without us, patients are going to even have to go to Chattanooga or I think all the way to Knoxville" for GI care.
At the end of December, BlueCross sent a letter to TennCare specialists - not including primary care physicians and OB-GYNs - warning of the planned cut. The letter said providers have until the end of January to either agree to the new fee schedule or terminate their contract with TennCare, the state's managed Medicaid program for the poor and disabled.
BlueCross operates Volunteer State Health Plan, one of two managed care companies that contract with the state to administer TennCare benefits in the East Tennessee region. Under a new contract with the state, the company's TennCare plans, BlueCare and TennCare Select, have been losing money for months, said Mary Thompson, spokeswoman for BlueCross.
CLOSER TO AVERAGEThe 14 percent cut brings Volunteer State Health Plan's reimbursements rates closer in line with the national average, which is about 72 percent of Medicare rates, said Mary Thompson, spokeswoman for BlueCross BlueShield of Tennessee, Volunteer's parent company. She would not release specifics on the company's rates as a percentage of Medicare, but local health care billing expert Bill Taylor said TennCare reimbursement rates have historically averaged between 75 percent and 85 percent of Medicare.
"The rate reduction is not something we want to do, but it's something we have to do," Ms. Thompson said. "We cannot sustain ongoing losses and operate the program."
The cut will affect about 12,000 specialists between the company's East and West Tennessee regions, she said.
At current rates, TennCare providers already often lose money treating TennCare patients, said Rae Bond, executive director of the Chattanooga-Hamilton County Health Department.
"Although primary care physicians are not being directly hit with the cuts, the cuts will impact their practice because it will likely mean it is harder to get their patients in to see specialists," she said. "Primary care physicians may be required to continue to care for complex and time-consuming problems when specialists are not available."
Pediatric surgeon Dr. Pete Kelley said the cuts could cause a "mass exodus" of specialists out of the TennCare if Volunteer State Health Plan doesn't offer any leeway on the change to providers rates. He believes officials with Volunteer State will think twice about canceling contracts if there is a "mass exodus" looming.
"Their specialist network has always been marginal at best and, if a significant number of doctors reject the fee decrease, I don't believe they're going to totally decimate their network by terminating everybody," he said. "Then there won't be anybody left to take care of the patients."
MORE CUTS PLANNED
More cuts to TennCare reimbursements are likely on the way.
As part of the fiscal year 2010 budget, the Tennessee Legislature approved cuts of 7 percent to TennCare reimbursements across-the-board.
Federal stimulus money has delayed those cuts, but they are now likely to go into effect on July 1, said Kelly Gunderson, TennCare spokeswoman. Those cuts will go to the managed care companies that administer TennCare benefits, who will then pass that decrease along to contracted providers, Ms. Gunderson said.
The other managed care company operating in East Tennessee, AmeriChoice, a division of United Health Group, has no additional rate cuts planned, but would have to pass along the 7 percent rate cut if that goes through in July, said Eric Paul, president of AmeriChoice in Tennessee.
Dr. Kelley said publicly funded managed care programs like TennCare suffer because state funding for the programs typically can't cover all the care needed by enrollees.
"Somebody has to lose money on the deal," he said. "The state just tries to shift their risk off to the MCOs and then the MCOs shift the risk off to the providers and we're the ones left holding the bag."