Trouble ahead for some Tennessee hospitals

photo The Tennessee Capitol
photo Ron Ramsey

NASHVILLE - Senate Speaker Ron Ramsey and House Speaker Beth Harwell acknowledged Thursday that some Tennessee hospitals may face closure as fellow Republican Gov. Bill Haslam delays a decision on whether to expand the state's Medicaid program under the federal health care overhaul.

But the leaders, who back Haslam's decision to continue negotiating with the Obama administration, say that's life in the free market.

Ramsey, R-Blountville, said he's heard the warnings from the Tennessee Hospital Association, but he still thinks "there's a little bit of 'the sky is falling' out there with them when it really wasn't."

Still, he acknowledged, "obviously this is going to hurt. In some cases there may be hospitals that have to close -- but look, if you want to operate in a free market, things like that happen. But I think overall they will figure out a way to cut this."

Harwell, R-Nashville, told reporters earlier that some of her rural members have already been concerned about the fate of hospitals.

"There are some rural hospitals that will be hurt; there's no doubt about that. But the health care industry is a changing industry and those that can't keep up, they just simply can't," she said. "I'm sorry that that might happen, but again, if it was a little exaggerated, we'll find out in the next six months."

Hospitals have been counting on the expansion of people in the state's Medicaid program, TennCare, through the federal Affordable Care Act to help offset special federal payments for people with no coverage at all.

Among those hardest hit is Erlanger in Chattanooga, although hospital association officials don't think the facility is in danger of closure. Rural hospitals, especially those already losing money and heavily dependent on special payments, are seen as far more vulnerable.

Earlier this week, Haslam announced he would not ask lawmakers in the current legislative session to agree to an expansion that TennCare Bureau officials say could impact 181,000 people. But he held out the possibility he could come back if he gets sufficient flexibility from the Obama administration.

He said he was unable to get adequate answers from U.S. Health and Human Services Department officials on Monday and had to have a budget amendment ready to move next week to account for the expansion.

Washington response

Influential Tennesseans in Congress applauded Haslam's decision against expanding Medicaid and urged federal officials to embrace Haslam's request for flexibility in eventually insuring an estimated 181,000 low-income residents.

In a Thursday letter to President Barack Obama's top health care adviser, U.S. Sens. Lamar Alexander and Bob Corker endorsed Haslam's request to use federal dollars to subsidize private insurance for the poor rather than broadening TennCare, the state's version of Medicaid.

"Nashville is the health care services capital of the country," the Volunteer State Republicans wrote to U.S. Health and Human Services Secretary Kathleen Sebelius, "and if your department would support Tennessee in doing what the state does best, Tennessee will continue to find innovative ways to provide better care for its citizens."

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Of the Volunteer State's 11 members of Congress, Alexander, Corker and seven others are Republicans who bolstered their conservative bona fides in bashing what they call Obamacare, formally known as the Affordable Care Act. All nine have voted to repeal parts or all of the health bill, which is supported by the two Democrats in the delegation.

U.S. Rep. Phil Roe, R-Tenn., said Haslam's plan "seems like it may be a better solution for access to health insurance."

Meanwhile, a Tennessee Democrat offered the opposite point of view.

"I wish the governor would follow the lead of other states and take the federal government's generous offer of Medicaid funding, both as a matter of humanity and fiscal responsibility," said U.S. Rep. Steve Cohen of Memphis. "To not provide health insurance to low-income people would be inhumane and to pass up the federal money would be fiscally short-sighted."

Democrats critical

Democrats have sharply criticized Haslam.

Haslam wants to move the expansion population into the federally operated health insurance exchange, in which hundreds of thousands of other Tennesseans can compare and select private insurance at subsidized rates, depending on their income.

Among other things, the administration wants to use the 100 percent federal funding for the first three years to "buy" the new Medicaid enrollees into the exchanges. Arkansas and Ohio are pursuing similar plans and federal officials have given Arkansas a nod to move ahead.

Haslam wants the new Medicaid enrollees, which will include single, low-income adults with incomes up to 138 percent of the federal poverty level, to be treated the same as other people obtaining insurance on the exchange.

That includes getting similar benefits. In TennCare, the benefits are more generous in some areas while more limited in others, according to TennCare Director Darin Gordon.

Haslam also wants the new enrollees to pay higher co-pays than the state can currently make them pay in the TennCare program.

The governor said this week that if successful, he could call lawmakers into a special session later this year. But Ramsey and Harwell weren't exactly enthused.

State House Democratic leaders on Friday questioned just how hard Haslam pushed what he calls his "Tennessee Plan" before deciding not to pursue approval for it this session.

"I was told they haven't had as much contact as they're saying," Democratic Caucus Chairman Mike Turner of Nashville told reporters. "I don't know whether it's true or not."

Haslam spokesman David Smith said "that's not true," and that the governor had "multiple conversations ... in person and on the phone" with Sebelius.

Smith said TennCare Director Darin Gordon has "had ongoing conversations" with officials in HHS and the Centers for Medicare and Medicaid Services.

Contact staff writer Andy Sher at or 615-255-0550.

Contact staff writer Chris Carroll at or 423-780-2025.