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MYTH #20: REALITY State officials secretly decided in the fall of 2004, at the same time they decided to cut off large numbers of adults, to eliminate coverage for all children whose coverage was not required by federal Medicaid law. It was only after discussions with federal officials that state officials realized that they could retain $200 million in special federal funding if they spared the children. Since the TennCare Bureau calculated that the cost of care for the children who were to be terminated would be only $60 million, retaining coverage them would net the state $140 million annually in federal funding.1 It was only then that the Governor reversed the earlier decision and announced that all children would be able to remain on the program.2 Children have not been entirely protected, however. The state has adopted a restrictive standard defining what care is “medically necessary”, and the definition applies to children as well as adults.3 The new standard is without precedent in any public or commercial insurance program in the country. 4 The definition is important, because TennCare, like other health insurance, only covers care that is “medically necessary”. The TennCare definition only covers the care that is least costly, without consideration of its comparative effectiveness. The law permits the TennCare Bureau or its HMO contractor to decide what is medically necessary without reference to professional standards of medical practice. The definition will make it especially difficult for children to get the care their doctors prescribe.5 Many of the 230,000 adults who have been cut from the program are caring for children. So, too, are many of the 360,000 adults who remain on TennCare, but with reduced benefits that are inadequate to maintain the health of people with serious chronic illness. The harm that will befall these adults will inevitably affect the children who are dependent upon them. For these reasons, the Children’s Defense Fund and other children’s advocates have condemned the TennCare cuts, and have vainly urged the Governor to follow the path of other states by choosing policies that really will protect children.6 1 J.D. Hickey testimony in Rosen v. Commissioner, March 31, 2005, pp. 43-48. 2 Press Remarks, Governor Phil Bredesen, January 10, 2005. But in drafting a supplement to the pending waiver application to C.M.S., the Administration nonetheless proposed to eliminate coverage for several thousand medically fragile children who were on the Medically Needy, or “Spend-Down” program, and whose termination would not affect the state’s retention of the special waiver funding. Office of the Governor, “Supplement to September 24, 2004 Proposed Amendment to the TennCare Demonstration Project”, January 19, 2005. It was only after the Tennessee Justice Center publicly disclosed the plan that the Administration agreed to allow those children to remain on the program. Tom Humphrey, “All children left off TennCare returned”, Knoxville News-Sentinel, January 26, 2005. 3 The definition was drafted by the Bredesen Administration and approved by the legislature in May 2004. See Tennessee Code Annotated, § 71-5-144, available at http://198.187.128.12/tennessee/lpext.dll?f=templates&fn=fs-main.htm&2.0. The law contains allows the TennCare Bureau to issue regulations that make exceptions for certain groups, and state officials have said that they might partially exempt children. But directions issued to the MCOs makes clear that children are still affected, and pediatricians warn that, if the law applies at all to children, it will deny them essential care. 4 Kaiser Commission on Medicaid and the Uninsured, “TennCare’s New ‘Medically Necessary’ Standard: Uncovering the Insured?” (July 2004), available at: http://www.kff.org/medicaid/7139.cfm. 5 The standard requires the prescribing doctor to cite evidence, which is typically lacking for pediatric care, because children cannot give informed consent to participate in randomized clinical trials. See note 4, Myth #6. 6 CDF President Marian Wright Edelman convened a group of nationally respected children’s health experts to review the TennCare changes and has personally met with the Governor at length in an attempt to dissuade him from the cuts.
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