Timeline of the TennCare Cuts

It Doesn’t Hold Water:
Governor Bredesen’s Explanation for Why He Took Away Health Coverage from Hundreds of Thousands of His Fellow Tennesseans.

Governor Bredesen has long blamed the TennCare cuts on federal court consent decrees, and on what he claims was the Tennessee Justice Center’s intransigent refusal to alter those decrees. That is his excuse for taking away the health insurance of hundreds of thousands of his fellow Tennesseans, something he says he tried hard to avoid.

The Governor has repeated the claim so often that people accept it as truth, but repetition does not alter the facts:

• In 2003, Gov. Bredesen himself renegotiated the consent decrees governing TennCare. He acknowledged that they were necessary to protect patients, most of whom are children, from mistakes of HMOs and the state bureaucracy. Gov. Bredesen publicly thanked the Tennessee Justice Center for concessions that would save the state $350 million. (1) In an August 26, 2003 statement by his Press Office, said, “This is a significant accomplishment in our efforts to improve TennCare and will have a tremendous positive impact on the future of the program.” (2)
• In September 2004, a budgeting error by the Bredesen Administration left TennCare with a $200 million shortfall. The Governor’s staff had budgeted that amount as savings from an anticipated change in pharmacy coverage. They decided not to implement the policy but forgot to correct the budget. (3) (4) (5)
• Around the same time, the federal Medicaid agency, known as CMS, quietly told the Governor that his much-touted TennCare reform plan would not receive federal approval. (6)
• In October 2004, the TennCare Director made a PowerPoint presentation to the Governor explaining that alternative cost-savings were available that would prevent cutting people off. But those reforms relied on the pharmacy benefit manager (PBM) to carry them out. (7) The TennCare Director and his predecessor wanted to fire the PBM because the company had done such a bad job, and he doubted they had the ability to execute the reforms. (8) The company, known as First Health, had been hired by the Bredesen Administration and was represented by the Governor’s friends, including the former Chair of the state Democratic Party. (9)
• Instead of choosing the cost-saving alternatives that the TennCare Director had outlined, the Governor chose massive disenrollments. (10) First Health received a new, no-bid extension of its contract for a lot more money. (11)
• The Governor’s Finance Commissioner instructed the TennCare Director to implement “strategy for ensuring responsibility lays with TJC [the Tennessee Justice Center].” (12) The Governor falsely claimed that the consent decrees he had personally negotiated the previous year had been negotiated “years ago” by other Governors, that TJC would not consider any changes in the decrees, and that TJC’s intransigence would force the state to cut off people off of TennCare and “go back to Medicaid” (13)
• On November 15, 2004, TJC offered to suspend the consent decrees for two years if that would preserve people’s coverage. The Governor rejected the offer but was under pressure from editorial writers and state lawmakers to negotiate a compromise that would preserve coverage. (14) (15) (16) (17)
• On November 19, 2004, Governor Bredesen announced that he would negotiate with TJC and that he would “leave no stone unturned” in an effort to find alternatives to cutting people off. (18)
• On November 22, 2004, a confidential PowerPoint memorandum, entitled “Back to Medicaid Kickoff” was issued to senior state officials instructing them secretly to go ahead with the Governor’s plan to “conduct the disenrollment process”  to achieve

1. “Elimination of the majority of all uninsured, medically needy and medically eligible enrollees”
2. “Selective eligibility targeting and/or phase-out of the most vulnerable populations (e.g., institutionalized)
3. “prevent alternative proposals (e.g., savings, revenue generation, enrollment)” in the legislature.
4. “Set the stage to allow the Governor a broader health reform platform”. (19)

• November - December 2004 – TJC sends Bredesen Administration a series of detailed policy proposals, developed with the help of national Medicaid experts, for cost-savings alternatives that other states have successfully implemented. (20) (21) (22) (23)
• January 2005 – after two months of pretending to “leave no stone unturned”, the Governor announced he had no choice, since TJC had refused to offer any alternatives, but to go back to Medicaid with massive disenrollments. (24) (25) The Governor carried out his 11-22-04 plan to “prevent alternative proposals” by aggressively attacking legislators who tried to soften the cuts. (26)
• March 2005 – Legislators expressed concern about the impact of the cuts and the Governor appointed a committee to advise on the development of a safety net. Then the Administration withheld information requested by committee, since it would show how sick the people were who were being cut off, and the committee could not do its job. (27) (28)
• May 2005 – A bipartisan coalition in the state House of Representatives attempted to save coverage for the uninsurable and was on the verge of amending the budget on the last day of the session to achieve that goal. Bredesen had the Speaker adjourn for the day until he could come back and lobby overnight to kill the amendment. (29)
• August 2005 – A federal court grants the state relief from one of the consent decrees after the Governor announced that, if the court changed the decree, the state would preserve coverage for 100,000 Medically Needy seniors and disabled adults. (30) (31) The Governor thanks the court and says that he will now be able to preserve coverage for the Medically Needy. (32) He announces that the State will reopen the Medically Needy coverage to new patients within a few months. (33)
• September – October  2005 – Several state legislators asked for a special session to come up with financial alternatives to the cuts. The Governor attacked them by falsely accusing them of trying to enact an income tax. (34) (35)
• January 2006 – The Bredesen Administration terminated coverage for 50,000 of the Medically Needy whom the Governor had promised to protect. In March 2008 the Bredesen Administration began a process that terminated coverage for all but 20,000 of the remaining Medically Needy. The State never reopened the category to new patients as promised. (36) Throughout the period from January 2006 to date, TennCare has continued to amass surpluses that have exceeded $1 billion of funds that were appropriated for medical care of frail Tennesseans but never used. (37) (38) By withholding those funds, the Bredesen Administration also cost Tennessee’s health care system, and the state economy,  $2 billion in federal matching funds. (39)

Supporting documentation can be accessed by clicking the numbered links above.