A government purchaser perspective

Abstract

On January 1, 1994, in response to escalating Medicaid costs, the State of Tennessee implemented TennCare, a statewide managed health care system for three population groups: Medicaid eligibles, uninsurable individuals, and people who lacked access to insurance through their place of employment.Under the TennCare program, the State contracts with ten managed care organizations to provide a comprehensive benefit package to each enrollee. Preventive services are exempt from copayment or deductible requirements. Each patient is assigned to a primary care provider who is responsible for assuring that the enrollee receives preventive services.More than 400,000 previously uninsured and uninsurable persons now receive health care coverage through the TennCare program. An extensive quality assurance program monitors managed care organization service delivery, with particular emphasis on prevention and access. Effective case management, combined with an enrollment cap, have enabled the program to grow at a predictable rate, without exceeding the annual rate of growth of state revenues.The TennCare program has been successful in using the savings experienced during the shift from a fee-for-service to a managed care Medicaid program to expand coverage to previously uninsured populations.