Tennessee Supreme Court strikes TennCare cap on emergency room payments

Health care workers are seen at Vanderbilt University Medical Center. Tennessee taxpayers could, under a new court ruling, be liable for years of back payments to emergency room doctors. / Tennessee Lookout photo by John Partipilo

For more than a decade, Tennessee's Medicaid program set a $50 cap on its payments to emergency room doctors treating low-income patients who show up at hospitals without experiencing a genuine medical emergency.

The Tennessee Supreme Court has now ruled that TennCare failed to follow the rules in setting the cap, a decision that potentially opens up taxpayers to years of back claims from the state's hospitals and doctors over being underpaid for patient care since 2011.

(READ MORE: TennCare: Nearly 300,000 Tennesseans likely to lose coverage)

The cap is now void. It was originally included in a set of cost-cutting measures amid a $100 million shortfall for TennCare, the state's publicly funded health insurer for low-income Tennesseans — mostly covering women, children and people with disabilities.

At the time, the agency promised to go through a standard rule-making process to put the cap in place, but that never occurred.

Instead, TennCare officials sent an email to managed care organizations who contract with physicians and hospitals announcing the new $50 rate for treating TennCare enrollees in ER's for non-emergency health conditions.

(READ MORE: Tennessee making TennCare changes after federal officials raise concerns)

Doctors had little choice but to agree, the ruling noted. Health care providers, including the west Tennessee emergency physicians' group that first filed suit against the cap in 2018, must sign a provider participation agreement before TennCare will make any payments at all. The agreements require health care providers to "accept the Medicaid payment as payment in full."

"Unless a health care provider signs a PPA, he or she cannot receive any reimbursement for treatment provided to TennCare enrollees. This reality leaves emergency-department physicians — who are legally obligated to provide certain care to all patients who walk through the door regardless of insurance status ... — little choice but to sign a PPA," the unanimous Tennessee Supreme Court decision said.

(READ MORE: Tennessee governor's budget proposal includes TennCare expansion for 25,000)

The agency, the court ruled, was obligated to follow a rule-making process requiring a public hearing and public comments before it could cap its payments.

A spokesperson for TennCare did not respond to emailed questions.

Read more at TennesseeLookout.com.