Tennessee Gov. Phil Bredesen will decide this month whether to end TennCare, the state's expansive version of Medicaid, because activists won't allow Bredesen some flexibility to cut costs, a spokesman for the governor said. About 400,000 people would lose coverage, and the state would lose $2 billion in federal funding, although it would save $1 billion in state spending required for the federal matching funds. Four federal consent decrees won by the Tennessee Justice Center, a not-for-profit public-interest law firm, restrict the state from changing the plan design in certain ways that are needed to cut costs and save the TennCare program, said Bob Corney, Bredesen's communications director.
Bredesen and former Gov. Ned McWherter, whose administration launched TennCare in 1994, earlier this week met with Gordon Bonnyman, executive director of the Tennessee Justice Center, in hopes of working out their differences, Corney said. The lack of progress and the potential effect of a decision on the state's entire budget have made the matter urgent, Corney said. In an interview, Bonnyman said the state can cut its drug costs without hurting beneficiaries by doing retrospective drug utilization review. The federal government has required Medicaid programs to conduct these reviews since 1993, but Tennessee never complied, Bonnyman said. Such a review would be a smarter way to cut drug costs than the governor's proposal to limit beneficiaries to six prescriptions per month, he said. -- by Vince Galloro