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Committee Refuses to Endorse New TennCare Contract

(Story created: 6/29/05)

Lawmakers are taking aim at a TennCare company involved with former Sen. John Ford and the Capitol Hill corruption scandal. Wednesday, a routine contract review ended with an unexpected vote that may have put the health care company on life support.

"I'd love to pull the plug right now," said state Rep. Donna Rowland, R-Murfreesboro. 

As the Bredesen administration brought new TennCare contracts before the legislature's Fiscal Review Committee, lawmakers had tough questions about OmniCare.

That's the giant TennCare company -- now known as United American Health Care -- that has admitted paying former Senate chairman John Ford more than $400,000 in consulting fees through its parent company.

That came the same day that, sources say, federal and state agents were preparing to seize an e-mail server from OmniCare as part of the continuing criminal investigation into its payments to Ford.

"Why do we continue to deal with the company?" Sen. Doug Jackson, D-Dickson, asked Bredesen's insurance commissioner Paula Flowers.

"I do not know why," she replied. 

While Flowers' department has placed OmniCare under supervision, partly for lying to the state about payments to Ford, TennCare officials have not taken any action against the company other than to demand more information.

Rowland made a motion that the committee not approve any revised contracts with OmniCare.

"You take this action, and OmniCare is gone," TennCare chief financial officer Darin Gordon warned lawmakers.

TennCare officials admit they've been working on contingency plans to care for OmniCare's 130,000 TennCare enrollees, but they asked for more time to investigate.

"I just think we need to think about this a little bit more than one two-hour session," said Finance Commissioner Dave Goetz. 

Fiscal Review Chairman Charles Curtiss, D-Sparta, said, "No matter when we do it, it's going to be massive. It's going to be a disruption."

But the lawmakers say if the Bredesen administration wants to continue to deal with OmniCare, it will be without their approval. The committee voted not to approve the new contract.

"There are some breaches of contract that just can't be forgiven or condoned -- it just can't," Jackson said, adding that "entering into secret payments to lawmakers" is one of those breaches. 

The Bredesen administration could ignore the committee and sign a revised contract with OmniCare anyway.

But the company doesn't have any other business other than TennCare.

So both sides fear Wednesday's vote could result in lenders cutting off financing for the company and making its stock worthless.

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