Thursday, November 11, 2004

RIP: Socialized Healthcare (1994-2004)

Tennessee Gov. Phil Bredesen (D) has announced his intentions to pull the plug on the failed healthcare monster called TennCare. The $7.8 billion a year program could cost the state 91% of new tax dollars in 2008. ''TennCare was, and is, a wonderful dream,'' Bredesen said. ''It appears this morning that the dream is over".

Back in 1994, the state of Tennessee swept the entire population on Medicade and a number of uninsured citizens into the new program called TennCare. Under TennCare, the enrollees would be covered under a managed care program administered by private managed care organizations, which would offer a comprehensive benefit package determined by the state. The state, in turn, would pay managed care organizations a flat fee per member per month, called a capitation payment.

The mismanaged program was ripe with errors, one being massive fraud. To be eligible for TennCare, you must be a Tennessee resident...but a PO Box was all that was needed to claim residency and enter the program. There were no audits or measures established to stop people from other states and even other countries from opening a PO Box and enjoying free healthcare. An independent audit found that even dead people from West Palm Beach, Florida were enrolled in TennCare. A 2002 audit showed that nearly 20,000 people were enrolled in TennCare who lived out of state, 130,000 had only a PO Box for an address, prisoners were enrolled, and some people were enrolled more than once. The program would also enroll people automatically if they lost their healthcare, while making it difficult to impossible for people to get out. One family reported that their newborn baby was enrolled without their knowledge.

The fraud reached all levels, including a cab company who was paid to transport patients to and from doctor visits, and ended up over billing TennCare for millions of taxpayer dollars. In October a couple of ladies were arrested after being caught selling drugs they obtained through TennCare. Doctors and Pharmacist were also being investigated for multiple billings for one service, receiving kickbacks in return for medical service, Dispensing generic drugs then billing the MCO for expensive brand-name drugs, and billing the program for services that were never performed.

First Arafat, now TennCare. It's turning out to be a pretty good week.

Click here for the TN Tax Revolt audit of TennCare
Bill Hobbs adds his insight
Nashville Files thinks Bredesen will replace TennCare with another TennCare-like program