Tennessee transition bill puts Medicaid contracts at risk

A new bill passed the Tennessee General Assembly could have a resounding impact on Medicaid-managed care procurement across the US.

Tennessee House Speaker Cameron Sexton (right) and Senate Speaker Randy McNally (right), who are also vice governors, funded the Tennessee MCO Reform Act, which would ban Medicaid State health insurance contracts with insurance companies that cover sex. -Assert treatment to anyone, anywhere in the country.

Bills targeting transgender people have swept across Republican-led states. What began as restrictions on where transgender people could use the bathroom and what sports teams they could join escalated into legal restrictions on them. medical treatment.

The Tennessee Legislature and Governor Bill Lee (right) kicked off the new year by passing the nation’s first ban on tug-of-war shows in the presence of minors. More than 400 anti-LGBTQ bills are being passed by state legislatures this year, and 25 states have or are considering banning the care of minors based on gender, according to the Civil Liberties Union. USA.

“We’re not specifically trying to fix the problem,” Tennessee Representative Tim Rudd (R), who co-sponsored the Medicaid agency bill, said in a scheduled hearing. law last month. “Way [gender-affirming care] is beginning to be implemented that are not within the values ​​of most Tennesseeers.”

Heather Howard, director of state health and value strategy at the Princeton School of Public and International Affairs, said the Medicaid proposal is a first attempt at politicizing the nonpartisan Medicaid bidding process. She says the legislation has broad legal and market implications and could bring TennCare, Medicaid’s first managed care plan, back to a fee-for-service model.

The bill raises a series of legal questions, many of which was considered in the lower courts. For example, the bill introduces challenges under the equal protections and interstate commerce provisions of the U.S. Constitution, the nondiscrimination provisions from the Affordable Care Act, and the Tennessee’s contractual obligations to health insurance companies offering TennCare benefits, policy experts said.

According to the nonpartisan Tennessee Legislature budget analysis, the measure would also limit the Medicaid agency’s ability to attract insurance companies to administer the plan, which could simultaneously reduce quality and increase costs. In addition, any modification to managed care contracts requires approval from the federal Centers for Medicare and Medicaid Services. According to the analysis, if terms are not approved and the state does not have a Medicaid managed care contractor, TennCare will have to switch to a fee-for-service model.

“This risks upsetting the whole concept of managed care that relies on commercial insurers. The theory is—and Tennessee has pioneered the field—that companies are. This commercial insurance can deliver greater value and slow cost growth,” said Howard, who previously served as New Jersey’s senior commissioner of health and services under Governor Jon Corzine. (D).

The sponsors of the Tennessee bill did not respond to requests for comment. Lee did not have a position. “This bill is still in the legislative process and as always, the governor will review the final legislation when it reaches his desk,” a spokesperson wrote in an email.

An earlier version of the Tennessee bill would bar Medicaid from contracting with insurance companies that provide surgery, hormone therapy and other sex-affirming treatments to anyone, including including adults, through private and government-funded health programs. Once revised, this measure has a narrower scope and only seeks to exclude insurance companies from covering gender reassignment surgery.

Tennessee’s Medicaid program banned sex-affirming care coverage. The law seeks to influence insurers to expand that mandate to product lines and states, said Lindsey Dawson, deputy director of HIV policy and director of LGBTQ health policy at the Kaiser Family Foundation. other.

“This isn’t really going to really affect access to care at TennCare because the services we’re talking about are not covered in the state, but it could affect contracts. copper and services in other states,” she said.

If enacted, TennCare would have to amend its policy within 30 days of its effective date to ensure compliance. Avalere Health consultant Michael Lutz wrote in an email that insurers will need to update care delivery protocols, claims processing systems and provider contracts. to remove sex-determining services or risk hefty fines, including lost contracts.

If an insurer is found to be in breach, they will have 90 days to comply. Dawson said Tennessee bought billions of dollars worth of managed care contracts last year, and terminating them to meet these requirements could affect continuity of care for all people. Sign up for TennCare.

According to Lutz, the amount at stake for insurance companies could stop them paying for sex reassignment surgeries. “While the plans may disagree with the purpose and impact of the rule, the size of the revenue opportunity to serve the state likely means the state will still be attractive to consumers,” he wrote. shipping carriers.


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