Tennessee Botches Mental Health Care
07/13/98

It is one of the largest experiments in managing healthcare for the poor.  The State of Tennessee withdrew from the U.S. Medicaid Program in 1994 and implemented a new health care reform plan called TennCare.  The idea was to provide healthcare for the poor and uninsured without raising taxes.  By some accounts this goal has been met, but access to healthcare - especially mental health care - has been drastically reduced.  Providers are not being paid and needed care is being curtailed.

A recent Health Care Financing Administration report on the TennCare system was extremely critical, according to an article in the Memphis Commercial Appeal. The newspaper reported the following:

A recent federal report on Tennessee's two-year-old managed care system for mental health was so devastating as to cast doubt on any attempt at overhaul. No bailing wire and duct tape approach will make this machine fly. A back-to- the-drawing-board job is in order, and many critics doubt this will happen.

State Health Commissioner Nancy Menke, stung by what she termed "dime store novel" harshness in the Health Care Financing Administration (HCFA) report's wording, said the entire Partners vehicle will not be scrapped. But she promised a "complete redesign," and any judgment must be withheld until its completion next month.  Memphis Commercial Appeal - July 7, 1998 (The HCFA report may eventually appear on the HCFA Website.)

The mental health portion of TennCare appears to be the weakest link in the system.   One example: Cherokee Health Systems filed a lawsuit in May against Tennessee Behavioral Health, one of the two Behavioral Health Organizations (BHOs) managing the mental health portion of TennCare. Officials at three state agencies were also named in the suit.  They are charged with  failing to establish "any rational method at all of reimbursement" to mental health providers.  This failure has reportedly threatened providers' financial viability, which threatens to "irreparably compromise the accessibility and quality of health care for some of Tennessee's neediest residents."  The complaint goes on to state that "through the TennCare Partners program, defendants have implemented an arbitrary and capricious payment methodology that bears no relationship to the actual cost of providing care."

Three days later state Health Commissioner Nancy Menke announced that the state would take over management of the entire behavioral health pharmacy program on July 1. The state assumed immediate responsibility for pharmacy coverage of seven specific drugs that increased in cost by as much as 6,200 percent in the last few months. These changes are supposed to allow the BHOs to redirect $4.5 million to provide relief to financially strapped community mental health centers. 

Will these changes save the system?  This seems unlikely.  A colleague of mine who works in Tennessee describes the system as a disaster.  A few people are getting rich while community mental health centers which serve the poorest patients are not being funded.  When managed care first became popular it succeeded in cutting some of the fat out of long inpatient stays in private hospitals.  There's not much fat to cut in community mental health centers and state hospitals. Some of these facilities can probably benefit from more efficient management, but those savings will be realized quickly.  The only way for managed care to really make money in these settings is to deny needed care.  If your government is planning to turn mental health care for the poor and chronically mentally ill over to the managed care companies, tell them about TennCare.

Links:

• TennCare Home Page
• What do you think?

Mental Health Search

Previous Features