At $96 million, BlueCross more than doubles projected ‘09 loss from TennCare enrollees

BlueCross report: $96M loss in 2009 on TennCare

CHATTANOOGA, Tenn. — BlueCross BlueShield of Tennessee lost $96 million managing health care for TennCare enrollees in 2009 — more than double what the insurer expected to lose.

A records review by the Chattanooga Times Free Press shows the BlueCross loss from managing TennCare in East Tennessee and West Tennessee is expected to grow to $135 million this year.

A report to legislators said to offset the projected loss, BlueCross is cutting reimbursements to thousands of specialty physicians and to some hospitals by 14 percent and is counting on an emergency room diversion program.

The report said while BlueCross has been able to operate at a loss “for a short period of time due to our financial strength, we cannot sustain significant operating losses.”

TennCare is Tennessee’s Medicaid program and provides coverage to 1.25 million poor and disabled people. Some physicians already complain about losing money on TennCare and are threatening to leave BlueCross’ TennCare networks.

The briefing document for lawmakers, titled “VSHP Rate Reductions Q&As,” shows physician cuts will save BlueCross about $25 million.

There are concerns about BlueCross’ TennCare provider network if specialists leave. The insurer covers about 450,000 people in East and West Tennessee.

“They claim they still have an adequate network, which I doubt very seriously because their network now is not really adequate,” said state Rep. Joey Hensley, R-Hohenwald, a doctor who is chairman of the General Assembly’s TennCare Oversight Committee.

State TennCare Bureau Director Darin Gordon told the panel last week that the BlueCross provider network has been about 40 percent larger than other TennCare managed care organizations.

“At this point they continue to meet network adequacy,” Gordon said.

BlueCross spokeswoman Mary Thompson said in an e-mail to the newspaper that cutting physician specialty reimbursement “is not something we want to do, but is something we have to do in order to position us so that we aren’t operating at a loss and can ensure our continued participation in the program.”

So far, according to the report, specialty physicians’ acceptance of the reductions is running at 90 percent to 95 percent.

“Even with a 5 percent rejection rate, our network still remains 30 to 40 percent larger than our competitors,” Thompson said.

Rae Bond, executive director of the Chattanooga and Hamilton County Medical Society, said the BlueCross cuts, outlined in a Dec. 31 letter to physicians, are only part of the challenge for doctors.

Bond said of BlueCross’ 14 percent reductions that “we just don’t think it’s a reasonable expectation to balance the needs of everybody’s budgets on the backs of those who ultimately are on the front line of taking care of sick folks.”

State lawmakers last year approved 7 percent rate reductions to all TennCare providers. They take effect in July.

Information from: Chattanooga Times Free Press, www.timesfreepress.com