News
By Matt Pulle
Last year, as Gov. Phil Bredesen blamed the Tennessee Justice Center for stymieing his efforts to reform TennCare, the state paid Vanderbilt law professor James Blumstein over $140,000 for providing legal counsel on restructuring Tennessee's troubled health care plan for the poor and uninsured. That payment exceeds the salaries of the state's top legal officials, including state Attorney General Paul Summers and the governor's legal counsel, Bob Cooper, who make $127,000 and $107,000 respectively. It is also considerably higher than the combined salaries of two of the top attorneys at the Tennessee Justice Center, executive director Gordon Bonnyman, who earns $68,000 a year, and managing attorney Michelle Johnson, who makes just under $50,000 a year.
The payment to Blumstein was a part of nearly $1.9 million the state paid last year in legal costs associated with reforming TennCare, most of which went to influential Washington law firms. And it is part of the $5.9 million the state has spent defending TennCare and state efforts from 1998 through 2004. Interestingly, that's signifantly more than what the Tennessee Justice Center earned through the same time period—$4.5 million. And the $5.9 is roughly the same amount that the state paid special court masters and enrollee advocates combined through 2004. The governor's office has defended its legal expenditures, saying that ultimately they could save the state hundreds of millions of dollars.
"There is no question it costs a lot of money to defend against the lawsuits that have hemmed up TennCare pretty much since its inception," says Bob Corney, the governor's communication director. "The lawsuits have real costs and, generally speaking, they are in the hundreds of million of dollars. In the context of those costs, these investments are well worth it."
Considered one of the preeminent health care scholars in the country, with a distinct right-of-center ideology, Blumstein has published dozens of articles exploring the role of free market principles in public and private health care plans. In a 2001 Wall Street Journal op-ed, he criticized the concept of a patient's bill of rights and argued that managed care plans should be allowed to restrict some medical services if they're deemed too costly. As legal counsel to the state, Blumstein put a lot of his beliefs to work, such as when he rewrote TennCare's standard on what is medically necessary, making it "significantly more restrictive" than just about any plan, private or public, in the country, according to the Kaiser Commission, which reviewed the standard.
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TennCare's new medical necessity standard, which has not yet been implemented, takes costs directly into consideration for determining medical care. TennCare's current standard leaves most of the decision-making up to doctors. But the new standard specifically states that services must be the "least costly alternative course of diagnosis or treatment that is adequate for the medical condition of the enrollee," which advocates say shortchanges health care for the poor and sick.
"When you get your car repaired, would you tell your mechanic to use the least expensive parts and just do an adequate job?" the Tennessee Health Care Campaign's Tony Garr asked the Scene last year. "We don't do that with our cars, yet the governor wants to do that with people's lives."
According to the Kaiser Commission, the state's new medical necessity standard is without precedent. It doesn't make allowances for a doctor's subjective judgment and doesn't seem to cover vital diagnostic services, including breast, cervical and prostate cancer screenings and preventive services.
In a faxed letter to the Scene, Blumstein cited attorney-client privilege for why he couldn't answer many of questions about his TennCare legal work. But he did write that he provided his legal services to the state at a sharp discount from his customary billing rate, although no other law firm charged the state more per hour than Blumstein. According to state-supplied documents, Blumstein charged $350 an hour for a total cost of $140,098. That works out to 400 billable hours, an impressive load considering that Blumstein provided the bulk of his legal counsel in just a four-month span in 2004 while the new TennCare legislation was being drafted.
In a meeting with the Scene last week, Gov. Bredesen said he selected Blumstein to help provide legal counsel because they go back nearly 20 years. When Bredesen first ran for mayor in 1987, then-Mayor Bill Boner tried to move the election date up to hold off his fast-rising challenger. Blumstein, along with attorney Bill Harbison, helped Bredesen get a court order mandating that election officials comply with the original date. Bredesen told the Scene that Blumstein's well-known positions on health care were not a factor. "We've never had a discussion on health care policy," Bredesen says.
But Blumstein's free-market-oriented views on managed care certainly made him an ideal candidate to scale back the TennCare program. In an article on TennCare in the Vanderbilt Law Review, posted on his faculty website, Blumstein previewed his work for the state when he argued the merits of a more restrictive standard on which medical services are covered and which aren't. In sum, he said that health care plans should be able to deny some medically beneficial services, which is now a hallmark of TennCare's new medical necessity standard.
While Blumstein is renown in health care circles, he's also a very talented attorney, having argued cases successfully before the U.S. Supreme Court. But to TennCare advocates, Blumstein's right-leaning positions make him an odd choice to help reform the program. Recently, the private prison company, Corrections Corp. of America, funded part of a study he co-authored concluding that private prisons can save states millions of dollars.