We appreciate the opportunity to comment on the progress of the TennCare III Demonstration. The Tennessee Disability Coalition is an alliance of organizations and individuals who have joined to promote the full and equal participation of Tennesseans with disabilities in all aspects of life. We work together to advocate for public policy that ensures self-determination, independence, empowerment, and inclusion for people with disabilities. A strong Medicaid program that appropriately serves vulnerable Tennesseans with disabilities is critically important. We believe that the proposed TennCare III amendment is contrary to the statutory purposes and objectives of Medicaid and does not appropriately serve vulnerable Tennesseans with disabilities.
For nearly 60 years, Medicaid has been a bedrock program protecting our country’s most vulnerable citizens by providing access to basic healthcare. People with disabilities, an aging boomer population, and their families rely on Medicaid care and services to protect their health. The uncertainty introduced by this untested and unproven funding mechanism creates new barriers to accessing this program, which is already exceptionally difficult to navigate. To choose to implement this scheme, which exclusively impacts children and disabled and aging individuals and their families, is contrary to the purpose of safety net programs in the United States.
The stated goals of the TennCare III demonstration are to provide high-quality care to members and improve health outcomes for members. To advance those goals, through this waiver, TennCare plans to authorize a number of programmatic flexibilities. While we recognize the potential benefit of administrative flexibility in exchange for taking on some financial risk, it is unacceptable to transfer that risk to those the program is designed to serve.
Risk to Most Vulnerable Populations
The TennCare III demonstration alters the funding mechanism for the “core medical services to TennCare’s core population”. This core population is made up of children, seniors, people with low incomes and people with disabilities. TennCare provides the fundamental care that allows individuals with disabilities to live in and contribute to the community. These services are critical to well-being. The waiver does not substantively articulate the ways this systemic funding shift can produce a reduction in costs, equal or better patient outcomes, and result in shared cost-savings with the federal government. Overall, there is little information as to the proposed changes TennCare III will bring, leading to uncertainty and potential threat to this vital safety net.
Prescription Drug Access
TennCare III permits flexibility under the demonstration to adopt a commercial-style closed formulary. Use of a commercial-style formulary is antithetical to a safety net program such as Medicaid. Limiting access to needed medications would be detrimental to people with disabilities and other covered TennCare populations with chronic health needs. Prescription drugs in the same class can still have different indications, mechanisms of actions, and side effects depending on the individual, their diagnosis, or comorbidities. A closed formulary with, in some instances, only one drug covered by the benefit would negatively impact the health of some individuals with disabilities.
A closed formulary’s restriction on drug benefits would also limit providers’ abilities to choose the best medical treatment for their patients who have complex conditions, co-morbidities, or low incidence conditions. TennCare III does not include an appeal process for individuals who may rely on medications that are no longer covered or not included on a limited formulary. It is unclear how TennCare plans to deal with this issue. Further, TennCare has proposed to adopt a closed formulary for prescription drugs for the ostensible purpose of saving money. A Tufts study showed that approximately 20% of closed formularies increased the cost of prescription drugs, and 25% produced negative outcomes for patients. Other studies show similar increased costs and poorer patient outcomes, including higher frequencies of in-patient hospitalization and higher rates of therapy discontinuations. TennCare’s proposal has yet to articulate how it plans to implement a closed formulary, what drugs will be covered or excluded or how it plans to account for higher spending related to limits on available treatments. Without these details, it must be assumed that a closed formulary for Tennesseans would limit available treatments, produce worse patient health outcomes and very possibly cost more money.
Impact on Long-Term Supports and Services
As baby boomers age and life expectancy for individuals with disabilities continues to increase, the number of individuals who need services like those in CHOICES continues to grow. The TennCare III mechanisms for calculating funding may not have a negative impact during this initial period, but it is likely that this does not account for needed program growth to serve additional people as the number of Tennesseans needing services inevitably grows. This may lead TennCare to either spend additional money over the cap or further cut services to remain below the cap.
Similarly, current funding for the ECF CHOICES Program is typically only able to support new enrollees if they are in emergent need (crisis). The TennCare III funding mechanism will make it hard to expand services or serve additional people since there are already a significant number that are not able to be served, and there is no guarantee that shared savings will be used to draw down waiting lists. Thousands of young adults are graduating from high school, and as this population ages it becomes more and more difficult for their parents/guardians to care for their adult children. TennCare III is ill equipped to address the growing need.
Changes in Amount, Scope, or Duration
TennCare III has “the flexibility under this demonstration to make changes to its benefits package, including the addition or elimination of optional benefits and changes in the amount, duration and scope of covered benefits.” For the vulnerable populations Medicaid serves, changes to “amount, duration, and scope” of benefits could be detrimental to patient care and outcomes. This could mean limiting the number of days that are covered for necessary inpatient hospital care, limiting the number of outpatient doctor visits covered or limiting access to durable medical equipment. The emphasis on cutting costs to achieve savings inherent in TennCare III may also incentivize decision-making that prioritizes financial interests over the health interests of the beneficiary.
The Congressional Budget Office (CBO) found that it is unlikely that states could achieve enough offsetting savings to cover the block grant solely through increases in programmatic efficiency. TennCare regularly claims to be one of the most efficient Medicaid programs in the country, and already ranks among the bottom ten states for per enrollee spending on aging and disabled Tennesseans. Fittingly, the CBO thus concluded that it was likely that capped state spending, such as the TennCare III block grant, would lead to cuts in services.
Impact on the Katie Beckett Program
The Katie Beckett Program, for now, is funded outside of the TennCare III block funding mechanisms. The approved waiver includes a provision for this arrangement for the first three years of the program, after which the funding needed for operations (whether or not enrollment is at full capacity) will be the funding allotted for the future of the program through the block funding. The ongoing slow roll out and low enrollment targets for the Katie Beckett Program have implications for ongoing funding after the initial period. Basing future funding on early limited or unmet enrollment targets may result in fewer services and potential waiting lists going forward. The Tennessee General Assembly made a substantial, dedicated commitment of state dollars, matched by federal dollars to fund this essential program. The General Assembly’s commitment of funding for the Katie Beckett Program must be maintained and protected.
Monitoring and Evaluation
Medicaid is an essential safety net that represents a shared commitment of the state and the federal government to the health and vitality of all Americans. This 60-year partnership is based on a foundation of joint funding and shared oversight. These checks and balances were created to ensure the Medicaid program provides fair and equal care. Changes in federal oversight make monitoring and evaluation at the state level critically important. TennCare III uses a never-before-tried and thus far unproven funding mechanism, and the 10-year waiver approval excludes Tennesseans and TennCare recipients from sharing their experiences with CMS. Given that the purpose of demonstration projects is to “test and measure the effects of… program changes” to Medicaid delivery, the lack of holistic data that includes beneficiary input limits the ability of CMS to fully evaluate the demonstration.
It is vital that enrollees, advocates, and providers have meaningful opportunities to participate in monitoring and evaluation of TennCare III activities. There must be a high level of transparency and reporting on the impact on the health and health care of enrollees. There must also be a high level of transparency and reporting about the financing structure and the availability and use of any savings that may be achieved in TennCare III.
The state of Tennessee and TennCare have historically proven themselves to be unreliable partners in caring for the state’s most vulnerable citizens. For 21 years, the state was engaged in a lawsuit over its treatment of Tennesseans with developmental and intellectual disabilities. The suit exposed decades of mismanagement, maltreatment and civil rights violations by the state. Recently, the state of Tennessee was the subject of a lawsuit over $700 million in unspent Temporary Aid to Needy Families (TANF) funds. Instead of disseminating the funds to the families to whom it was entitled to, the state sat on the money with no clear intention to use it for its statutory purpose. Further, the state is subject to a lawsuit over this very TennCare III proposal, in part the result of its attempt to shorten the public comment period. To trust the state of Tennessee with an untested and unproven Medicaid funding mechanism and to trust that they will use any shared savings in the best interest of Tennesseans with disabilities, without substantive public or federal oversight, is misguided.
Amendment 1 – DIDD Integration
Amendment 1 to the TennCare II project proposes to integrate services for individuals with developmental and intellectual disabilities into the state’s existing managed care system. Ultimately, we believe this move would result in a reduction of services for persons with intellectual disabilities who have the greatest need for services. Amendment 1 proposes to align 1915(c) waiver services to those in the state’s Employment and Community First Program (ECF), which, in practice, serves a different population with different needs. The amendment also proposes to restrict nursing services, restrict provision of various therapies, limit access to licensed and trained professionals, and reduce the provider network available to waiver participants. Amendment 1 is currently vague, constructed with inadequate public and stakeholder input and, within the context of TennCare III’s cost-cutting incentives, simply a means to reduce services and save money.
Future Outlook
For 60 years Tennesseans, like all Americans, have had the certainty of a comprehensive Medicaid program should they need it. Should Tennesseans face disability, a catastrophic illness or dramatic economic downturn we need the certainty of a pathway to basic care through Medicaid. TennCare III introduces significant uncertainty into what should be a cornerstone of our health system. For those who are the most vulnerable, including children and adults with disabilities, the lack of essential details about changes is unacceptable.
Public participation and feedback are important to ensuring the quality and success of any public program. Without an adequate initial comment period, and with ongoing opacity, there is substantial risk of leaving people behind and the program failing to meet the needs of those it was designed to serve. We urge TennCare to develop and use robust mechanisms for public input and participation in program design and implementation to deliver quality care and improve health outcomes.