$1B Will Come Out Of TennCare Budget

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NASHVILLE, Tenn. - The state has to cut $400 million from its health care insurance program.

Due to matching funds from the federal government, the state could stand to lose about $1 billion from Tennessee's Medicaid managed care program.

On Monday, TennCare officials met with Gov. Phil Bredesen, who kicked off his seventh round of open state budget hearings last Monday.

He's asking every department to cut millions of dollars from their budgets.

Many times when the state pays for something, the federal government also chips in with what they call matching dollars. That's the case with TennCare. So the state has to chop about $400 million out of the TennCare budget. Because of those federal matching dollars, about $1 billion will have to come out of that budget.

It remains unclear if anyone will be dropped from the program, officials said they will review what groups they can or cannot cover.

"There is the medically needy group that we were looking at opening up to, in February, if the economy continues to be in this posture, it would be highly unlikely we would do something for optional groups," said TennCare Director Darin Gordon.

There could also be a different way to offer services such as the pharmacy program. Instead of offering two brand name and three generic prescriptions that formula could change.

TennCare could also change the way it reimburses hospitals and nursing homes for their services.

"Tennessee is a good state to operate a nursing home in from the standpoint of TennCare, Medicare reimbursement," Bredesen said.

On a day of crunching numbers and belt-tightening, another financial hurdle looms for TennCare. A federal lawsuit against the program is costing $1 billion a year. It's all because they are being forced to keep 200,000 people on the TennCare rolls.

"To keep a bunch of people who are not entitled to be on the rolls, and to cut benefits from people who are entitled to be on the rolls, I think would be just a terrible sin," Bredesen said.

There's hope it could be resolved this year.

TennCare watchdog groups are wary about any sort of cuts especially when there's hope the federal government could provide more matching funds in February.

"Hopefully the Bureau of TennCare will not act out in haste, and start cutting before they let the federal government act," said Tony Garr, executive director of the Tennessee Health Care Campaign.

There are a number of children on TennCare. On Monday, the governor vowed to try and not touch any of those services that impact kids.

He made the same promise about pre-K and secondary education during last week's budget hearings.

Bredesen will call for 10-15 percent cuts from each department. Department heads are figuring out what to cut. They will present those proposed cuts to the governor in December.