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(L-R): Charles R. Handorf, MD, President, Tennessee Medical Association; Robert A. Kerlan, MD, President, The Memphis Medical Society; and Wiley T. Robinson, MD, Immediate Past President, The Memphis Medical Society.

In June, Gov. Phil Bredesen signed into law the Cover Tennessee (CoverTN) statewide insurance program designed to fill the gap left by the TennCare dismantling.

This comprehensive healthcare expansion program consists of five plans (CoverTN, CoverKids, CoverRx, AccessTN and the prevention/education component, ProjectDiabetes and Coordinated School Health) to provide uninsured and uninsurable residents with affordable, albeit more restricted health coverage.

The first plan being bid by commercial insurance companies, Cover Tennessee, designed for small businesses and the working uninsured, is slated to begin enrollment this month. At press time, commercial bids for the state program were not yet finalized. The hindsight of TennCare echoes in the background as physicians express their anxiety about how the dust will settle after coverage begins in January.

The difference this time around is the state is completely in control of the program design, implementation and costs, and unlike TennCare, involvement is supposed to be voluntary. The program requires insurance companies who place bids on CoverTN to only add practices that are accepting new patients.

"Our position is, we applaud (Governor Bredesen's) courage and his willingness to take on this very difficult problem," said Tennessee Medical Association (TMA) president Dr. Charles Handorf, professor and chair of the department of pathology and laboratory medicine at the University of Tennessee Health Science Center. "We still have some serious concerns and reservations about how the implementation is going to work."

Physicians are unaware of exactly what patient benefits and provider reimbursements will be. Even with the state's provision about only including providers who are accepting new patients, there is still concern that insurance companies will create panels filled with unknowing providers who will only find out they're involved when a CoverTN patient walks through the door.

The state issued requests for proposals (RFPs) in October with a Nov. 27 deadline. Contracts are to be awarded and enrollment is to begin this month with implementation beginning in January. CoverTN will have limited coverage and enrollment is restricted to a few thousand Tennesseeans, most of which were disenrolled from TennCare. Handorf said the overall reaction from both hospitals and physicians has been generally negative.

"This has a long and sad history; physicians were basically swindled with TennCare out of tens of millions of dollars," asserted Handorf, explaining that payors involved in TennCare used a "take it or leave it" approach with healthcare providers that gave them no choice about participation or how many TennCare patients they would see. "When we complained about that, we were told we had made a bad business decision in signing up to take care of those patients. Most of us are now not willing to make another bad business decision.

"To be balanced, though," he continued, "I would point out that for Cover Tennessee, these are patients, for the most part, that we're taking care of already and getting paid zero for right now. Not having insurance doesn't mean you don't get medical care. All of us take care of patients for free and we do so willingly. It's part of our societal contract (but) you cannot fill up your practice with people who have no money. True enough, (the state program is) going to pay us something where they didn't pay us anything before, but will we have control over how many we can see? Will it get to where we have to take everyone that comes in the door?"

There is another major concern of physicians, Handorf said. "We're being asked to participate, but we have no idea what the reimbursements are, what the parameters are, so we could be saying yes to who knows what."

The state's RFP stipulated that insurance companies must bid an existing commercial product, in other words, bid into a program in which doctors are already participating. Two plan bids will be accepted, either by two different carriers or one carrier with two plans.

Bill Appling of J. William Appling and Associates consulting firm has advised his physician clients to look out for silent PPOs slipping into a contract plan. A silent PPO refers to the practice of a large insurance company selling its network and the volume discount to a third party insurer who will take advantage of that discount while not providing the same volume. This practice is typically done without consent of healthcare providers.

"I have advised my clients to be very cautious about contracts that might be silent PPOs," said Appling. "It could be a 15-page contract and in only three or four sentences would specify the (provider) would be assigned to an unwanted contract."

The medical industry was not involved in the bidding process nor did it know how many bidders responded to the RFP; however TMA and other associations in the industry were given their chance to voice concerns to the state finance committee. A concern that was addressed is the practice of using a "cram-down" to force providers into an insurance program. When TennCare came into existence, explained Handorf, large insurance companies in the state basically gave healthcare providers an ultimatum — to be able to participate in any of a payor's commercial products, healthcare providers had to participate in TennCare, and there was no negotiation on pay.

"The state heard us loud and clear and no cram-down will be allowed," said Handorf. "Any insurance company that gets a CoverTN contract will have to make that stand on their own and are forbidden to say, 'If you take this you have to take that.'"

"We have urged the state (to ensure) CoverTN members are given the option knowingly to (participate) and not forced," echoed Gary Zelizer, director of government affairs for TMA. "There is nothing that required them to send out letters but they are required to ensure physicians in their network are accepting new patients."

At press time, only one insurance company bidding on CoverTN — Blue Cross Blue Shield of Tennesssee — contacted physicians in its group to ask for participation in the CoverTN plan.

"This is something that is going to go through whether the docs want it or not," Handorf concluded. "We're going to have to roll with what happens."



December 2006

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