Update on Tennessee’s Medicaid Woes

In July 2014, Wolters Kluwer reported that Tennessee had turned over all Medicaid eligibility determinations to the federally facilitated marketplace (FFM), HealthCare.gov,  and thousands of applications were in limbo somewhere between the FFM and the state agency. The Tennessee Justice Center and other advocates for the poor had sued TennCare officials to compel them to act on applications and hearing requests. A federal court had ordered the agency to begin to provide hearings for individuals whose Medicaid applications were not acted upon within 45 days. CMS had directed the state to submit a plan to come into compliance with the enrollment requirements of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). What has happened since then?

Pending appeal

State officials appealed the preliminary injunction. According to Tennessee Justice Center attorney Chris Coleman, the Sixth Circuit Court of Appeals heard oral argument recently, and the judges seemed most interested in whether the case was moot because the original plaintiffs had been granted assistance. Another case involving a similar mootness issue is pending at the United States Supreme Court. A ruling could be issued any time, although the Sixth Circuit may be waiting for the outcome of the Supreme Court case.

TennCare’s technical difficulties

In January 2015, TennCare terminated its contract with Northrup Grumman, which had been unable to complete the development of the TennCare eligibility determination system (TEDS) to meet the requirements of the ACA. KPMG submitted a report on the problems with the contractor’s performance, and the agency hired KPMG to help it select the new contractor. No selection has been announced. Under these circumstances, there is no way even to estimate when Tennessee will resume accepting applications.

The application process

Meanwhile, the state continues to require that all Medicaid applications be submitted to HealthCare.gov. According to Coleman, the state has discontinued accepting applications at the county offices. There is now nowhere in the state to submit an application in person. Applications must be submitted online to HealthCare.gov, by phone, or by mail. HealthCare.gov determines the date of the application. After 45 days, HealthCare.gov sends the applications to TennCare. Rather than hold hearings for every applicant whose eligibility has not been determined, TennCare requests any needed information from the applicant and makes a determination within 45 days. The problem of delay is not completely solved, but at least applicants no longer have an interminable wait, he added.

Under the terms of the TennCare waiver, the state does not provide retroactive eligibility for the three months immediately preceding the date of application under 42 C.F.R. sec. 431.914 and Soc. Sec. Act sec. 1902(a)(34). Coleman told Wolters Kluwer that this creates problems for hospitals because they cannot  submit applications for patients on the day they arrive. Without retroactive eligibility,  Medicaid will not pay the hospital bill.  Some hospitals are sending fax transmissions to the TennCare contractor that handles the call center, but TennCare will not permit the contractor to accept applications.

Extension of the waiver

The current TennCare waiver expires June 30, 2016, and the Bureau of TennCare is seeking an extension through June 30, 2021. The agency sought public input on its draft application on November 12, 2015. The pre-application comment period ended on December 14, 2015. There will be additional opportunities for public comment after the application is submitted to CMS. It is possible that CMS will not renew the waiver of retroactive eligibility.