Attorney general: Haslam's Insure Tennessee 'zero risk' to state

Gov. Bill Haslam speaks at the state Capitol in Nashville on Dec. 2, 2014.
Gov. Bill Haslam speaks at the state Capitol in Nashville on Dec. 2, 2014.

NASHVILLE -- Both state Attorney General Herbert Slatery and a top federal health official say Gov. Bill Haslam can at any time drop his proposed plan to provide 200,000 low-income Tennesseans with health insurance, without risking any financial penalties from the federal government.

In his new legal opinion, Slatery said that under Haslam's proposal the state "may unilaterally decide to discontinue coverage for the Insure Tennessee population, as long as implementation satisfies certain notice and phase-out procedures set out in the TennCare waiver."

photo Herbert Slatery speaks about his appointment as attorney general in the Tennessee Supreme Court chamber in Nashville on Sept. 15.

However, Slatery cautioned that "we lack sufficiently specific information to enable us to determine the maximum amount of time necessary to provide due process protections to a population of 200,000 enrollees."

The opinion was released hours before state Senate Judiciary Committee Chairman Brian Kelsey, R-Germantown, a vocal critic of fellow Republican Haslam's proposal, held a hearing on Tuesday to examine what he called "legal issues" surrounding Insure Tennessee.

"I have grave concerns that Tennesseans are going to be left on the hook," said Kelsey, whose committee won't actually be hearing the legislation Haslam intends to bring before a special legislative session next week. "I have concerns this is going to be like the Eagles' 'Hotel California,' where 'you can check in anytime you want, but you can never' check out."

That drew fire from Vice Chairman Doug Overbey, R-Maryville, who charged "it would seem the purpose is to advance your opposition to the plan."

"You mentioned that you intended for this meeting only to address legal issues, but I've heard many comments unrelated to legal issues -- and a lot of opinion and a lot of conjecture," Overbey said. "So I guess I'm wondering why are we here?"

Haslam has said he has had verbal assurances from U.S. Health and Human Services and federal Centers for Medicare and Medicaid Services officials that Tennessee can jettison the program at any time. Federal officials have also stated that in a "frequently asked questions" section on CMS' website.

But Vanderbilt University law professor James Blumstein testified Tuesday that he wasn't sure that was enough to make it binding in courts. He told the lawmakers he thinks it should be included in the state's official "waiver" of Medicaid rules, an agreement that will be hammered out by state and federal officials.

Otherwise, he said, the federal government might threaten funding for Tennessee's entire Medicaid program, which is operated under the name TennCare.

Blumstein suggested lawmakers consider giving a preliminary OK to Insure Tennessee but hold back on final approval until they could consider the official waiver's language. Doing so would "strengthen the governor's hand" in his negotiations with CMS, Blumstein said.

He also recommended deadlines be written into the waiver requiring federal officials to act within a set time if the state decides to opt out of the expansion.

In the midst of Tuesday's hearing, the Haslam administration released a letter from Health and Human Services Secretary Sylvia Burwell. In it, Burwell notes the "frequently asked questions" section regarding states' ability to drop the expansion population at any time.

"Consistent with that guidance, Tennessee may take up the Medicaid coverage expansion and later drop it at state option," she said. "There is no requirement for a state to maintain coverage for the new adult group."

Moreover, she said, if Tennessee were to drop "such coverage at a later point, there would be no financial penalty and no reduction to the federal matching dollar rates otherwise available to Tennessee for its Medicaid program."

Thomas A. Scully, a Republican and former CMS administrator who was involved in Tennessee's first Medicaid waiver, said, "I think you'd be nuts in Tennessee not to do this. I don't like provider taxes, but the fact is, it's set up in a way that there's zero risk to Tennessee."

Contact staff writer Andy Sher at asher@timesfreepress.com or 615-255-0550.

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