In September, as Gov. Phil Bredesen was preparing to send his substantial TennCare reform proposals to Washington, D.C., for approval, he met with enrollee advocate Gordon Bonnyman, enrollee-turned-advocate Lori Smith and several others. Up until that point, the two sides—Bredesen and patient advocates—had failed to find any common ground in the effort to cut the costs of the state health insurance program for the poor and uninsurable. The writing was on the wall: Bredesen would soon threaten to gut the program entirely. The advocates, meanwhile, felt that the governor's proposed reforms would essentially castrate it anyway. So there was nothing to lose in demanding that the state do right by its most vulnerable citizens.

Smith says that when the meeting began, the governor sat down and barely made eye contact.

"I'm giving you 15 minutes of my time, and I'm talking," Smith recalls an angry Bredesen saying. "He then said, 'You've pissed me off.' He told us that this was the last chance to save TennCare, and we were getting in the way."

What happened in that brief, tense meeting typifies the negotiations between a savvy governor elected on the platform of better government management and an outmanned army of do-gooder legal hawks trying to save lives by preserving decent health insurance for hundreds of thousands of people.

To hear the governor tell it, TennCare's advocates, particularly Bonnyman, are responsible for the troubled state of the health care program. Just about every state in the country is grappling with how to keep pace with the ballooning costs of health care plans for the poor. Meanwhile, Bredesen is laying the blame for derailing the $7.8 billion program on a 57-year-old attorney who rides the bus to work. Last week, in announcing plans to remove 430,000 people from the program's rolls, Bredesen repeatedly singled out Bonnyman for crippling the program with a series of lawsuits. The governor's office also has blamed Bonnyman for obstructing the governor's budget-slashing federal waiver that aims to reform the program.

Now, having practically infuriated an entire state, Bonnyman, the founder of the nonprofit Tennessee Justice Center, has been deluged with e-mails, negative press and angry letters to the editor, all claiming that he's responsible for hundreds of thousands of Tennesseans losing their health insurance. Adding insult to considerable injury, Bonnyman claims that the governor's office even forwarded disgruntled callers to his office, though gubernatorial staffers flatly deny it.

On Monday, the plaintive lawyer announced on the Capitol steps that he would suspend the legal efforts that Bredesen has castigated for sinking the program. Speaking before a cluster of reporters and advocates, Bonnyman said that the consent decrees he's fought for have helped protect the poor and the sick and that he wasn't stepping aside lightly. But while Bonnyman was clearly conflicted about doing this, he was convinced that only by suspending the orders could he keep the state from dismantling the program. Later that afternoon, the governor extended the deadline for killing the program, although if he pulls the plug now he'll have a tougher time blaming Bonnyman.

It looked on Monday like the legal advocate wilted under pressure from the governor's bully pulpit. But what he actually did was put the onus back on Bredesen. While lawmakers from both parties say that Bonnyman's lawsuits may have helped drive up the costs of the program, there's little doubt that Bonnyman has become a convenient scapegoat for a public policy experiment that has no shortage of afflictions.

"It's been the strangest feeling to learn that myself...and a few obscure legal aid lawyers working in the basement of a public square garage somehow have more power to control the program than the governor and his staff," Bonnyman says. "That's silly."

A skilled and shrewd attorney with a track record any trial lawyer would envy, Bonnyman has spent the better part of two decades successfully suing the state for how it administers health care to its poorest and sickest residents. He has fought for enrollees to appeal the arbitrary denial of medical services and coverage and has helped the elderly receive home health care instead of living their final days in a nursing home. More than anything, Bonnyman has forced the state to follow federal law. He almost always wins.

Gov. Bredesen and lawmakers from both parties claim that Bonnyman's lawsuits have cost the state hundreds of millions and kept them from managing the program effectively. They've made Bonnyman the villain. The reality, though, is a lot more complicated. If Bonnyman had never filed a single lawsuit against TennCare, the program would still be on its deathbed and its quality of care would be considerably worse. Meanwhile, without a middle-aged lawyer to kick around, the governor would have had a tougher time explaining how a straight-talking Democrat who ran on the platform of saving TennCare had to throw hundreds of thousands of people off the program's rolls.

The governor rightly thinks that he has a mandate to reform TennCare and prevent its spiraling costs from consuming the state budget. Bonnyman, through an epic career of advocacy, sees it as his obligation to make sure that people aren't denied needed medical treatment just because they can't afford it. The two have yet to reconcile those two goals, and they may never. Monday's announcement, however, means one last chance.

Shortly after the 2002 governor's race, when former Nashville Mayor Phil Bredesen edged out Congressman Van Hilleary by 50,000 votes, talk show host Teddy Bart invited advisers for both candidates on his morning program. Dave Cooley, a longtime Bredesen confidante, and Frank Cagle, a Hilleary advisor, are both smart, combative types unafraid of a good debate. Bart probably thought the two would be good for on-air sparks, but on the subject of TennCare the two former adversaries were of like mind.

"We both said it would bankrupt the state without reform, that getting the advocates to agree to reform was crucial and that it was the No. 1 issue," Cagle recalls. "Teddy wondered how there could be so much agreement, and I said we both have had task forces looking at this for months; we've studied it. There's no controversy. This has to be done. Dave agreed."

When Bredesen took office in 2003, he was faced with a stiff budget crisis. He ushered in state spending cuts and even slashed funding for higher education. Republicans and Democrats alike applauded the governor for balancing the budget and showing the kind of managerial acumen that eluded his predecessor, Don Sundquist.

While Bredesen was laying the foundation for his bedrock public approval, he began meeting with Bonnyman. Leaving his legal counsel behind, the governor talked to the attorney about TennCare's exploding costs. The two had known each other for years. Their sons were both in Cub Scouts together. The governor appointed Bonnyman's wife to a Chancery Court position, and when Bredesen was mayor he had selected Bonnyman to serve on an HIV task force. Both men were Ivy Leaguers; the governor had been educated at Harvard, Bonnyman at Princeton.

In August 2003, the two seemed to come together on a landmark settlement of four lawsuits vital to the management of TennCare. The key to the agreement was a modification in what's known as the Grier case. Filed in 1979, long before the birth of the TennCare program, its plaintiffs were Medicaid enrollees who lost the right to appeal denial of medical services. In 2000, during Gov. Sundquist's administration, the state signed a generous consent decree that made it easier for enrollees to appeal the refusal of treatment and coverage, particularly prescription drugs. Even if a TennCare health plan denied medication, enrollees could receive a 14-day supply while they appealed. But state officials complained that the program's pharmacy costs skyrocketed. Blue Cross Blue Shield of Tennessee threatened to leave the program, in part because of the costs of Grier. Bonnyman, meanwhile, claimed, somewhat naively, that he doubted Grier was really the culprit.

The August 2003 settlement watered down what had been agreed upon three years earlier and seemed to deal with Grier once and for all. Under the settlement Bredesen and Bonnyman hatched, the state would only have to provide a three-day supply of medication during the appeals process, a revision that saved the state millions. Under the new Grier settlement, TennCare also created a preferred drug list, which helped the state earn larger rebates from pharmaceutical companies. The governor told reporters that the new agreement on the Grier case would save the state up to $130 million.

After the settlements were announced, the governor seemed to have mixed feelings—he was both elated and skeptical. He called the agreements a "milestone" and said that they put the state "in the driver's seat" on the road to reform. He said they would bring about great savings. But he also hedged his bets.

"I don't want to say everything is great, all is solved," the Associated Press quoted him as saying. "This is a good solid step forward to sorting out the problems in TennCare and beginning to see if we can make this thing work."

Bredesen's aides like to say that Bonnyman is "stubborn," to a fault, but Bonnyman's role in the 2003 Grier revisions was critical. Because of his involvement in the earlier agreement during the Sundquist administration, the Bredesen team needed him to agree to the 2003 reforms. Had Bonnyman chosen not to be involved, the state would have had no legal authority to rework the earlier settlement. But Bonnyman says that he was willing to work with the governor to reform the program. He now says that he never suspected what lay in store after his cooperation in the 2003 revisions.

"We were told that we would save $130 million," Bonnyman says of last year's agreements. "Now we're $650 million in the hole. We don't know how we got here."

When TennCare was launched 10 years ago, it was considered a radical public experiment. Faced with a budget shortfall of nearly $250 million, fueled largely by rising Medicaid costs, Gov. Ned McWherter had two options. He could push for a massive sales tax hike or draconian spending cuts. It was one or the other. But McWherter and his finance commissioner, David Manning, found a third way. They'd actually expand coverage, obtain federal matching funds and use the fatter rolls to lure managed care organizations. The program began with 12 MCOs, which were compensated on the basis of enrollee numbers instead of by the usual fee-for-service model. This, in theory anyway, encouraged the MCOs to negotiate cost-effective contracts with doctors and hospitals and focus more on preventive care to avoid spending money on more costly treatments later.

In 1998, arguably the high water mark of the TennCare program, Tennessee had lower spending per enrollee than any other state. A report from the state comptroller's office cited TennCare for saving $2 billion in state dollars since its inception. Meanwhile, TennCare was providing more health care, not less, than the old Medicaid program.

Then, for a variety of reasons, each of which could inspire a separate public policy textbook, the program began to fall apart. MCOs began to fold, and pharmacy costs began to skyrocket. State officials also cited the Grier consent decree that Bonnyman negotiated with Sundquist in 2000 for making it difficult to limit the use of prescription drugs. Lawmakers then blamed Sundquist—and they continue to—for signing on to the deal in the first place. Advocates, though, blamed Sundquist for linking TennCare with a proposed income tax and therefore eroding support for the program. They also say that when Sundquist increased rates to providers, it undermined the delicate economics of the program.

At the end of 2003, the consulting firm McKinsey & Co. released a report projecting that TennCare would consume 91 percent of state revenue in 2008 if left unchecked. On Feb. 17, 2004, against the backdrop of the well-publicized report, Gov. Bredesen outlined his plan for TennCare reform during a 40-minute-speech before the General Assembly. At the governor's invitation, Bonnyman had a seat on the House floor, 20 feet from the podium. To Bonnyman's surprise, the governor detailed massive cuts that would produce $2.5 billion in cost savings over four years. Pregnant women, children and the disabled were spared from the most drastic measures, although the proposed reforms would impose strict limits on prescription drugs, doctor visits and medical tests for other enrollees.

Trying to frame his speech in progressive undertones, the governor said TennCare spending must be contained so that the state could direct more resources to education. A true numbers geek, Bredesen loves to cite obscure statistics to underscore a point. He noted the state spends more on two drugs—Zyprexa and Zocor—than it appropriates to the University of Tennessee medical school. "That's a fire bell in the night," Bredesen told lawmakers. "Something's wrong."

Bredesen then directly appealed to the advocates, whom he had to know would be his only opposition. "I am inviting you in on this process; I'm asking you to join with us," he said. "Many of the very same people who benefit from TennCare have even greater amounts to gain from investments in education. I want to heal the wounds, but only one-third of all we spend on TennCare is mandatory benefits and enrollment, and if we are forced to amputate a limb to save the patient, we will do so. I'm asking you to help me work on a humane alternative."

Bredesen's lecture of sorts drew a standing ovation in the House chamber. Bonnyman, meanwhile, didn't applaud. While he knew for weeks that the governor was proposing spending cuts in the TennCare program, the lawyer says that he was stunned at the scope of Bredesen's plans. "I was horrified because the numbers he laid out were staggering," Bonnyman says. "You just couldn't get to those numbers without serious cuts to the program. When you go after very sick people, they are the most vulnerable to any disruptions in their care."

The General Assembly, however, had no such qualms and approved the governor's TennCare reform proposal with little debate. A few months later, lawmakers cited their support for the governor's measures in their re-election campaigns.

Meanwhile, Bredesen was leaving nothing to chance, enlisting high-powered legal help to package and defend his proposed reforms within a federal waiver request. Locally, Bredesen enlisted the help of Neal & Harwell, one of the leading white-collar defense law firms in the country. Bredesen also relied on Vanderbilt professor Jim Blumstein to help him draft parts of the waiver, including its stringent definition of "medical necessity." Health care advocates are wary of Blumstein, calling him a leading intellectual opponent of entitlement programs like Medicaid.

Bredesen has also worked with the Washington firm of Cooper & Kirk, which has very prominent Republican ties. Its founder, Charles Cooper, worked as an assistant attorney general in the Reagan administration. Its motto, prominently featured on its Web site, reads, "Vincere Aut Mori," Latin for "Conquer or Die." That might be a good rallying cry inside the Beltway, but it's hardly the most reassuring slogan for a firm that's playing a key role in TennCare reform.

Still, for most Democrats and Republicans, Bredesen could do no wrong. To lawmakers and the press, Bredesen's impeccable credentials as a former HMO executive and policy wonk lent credibility to his reform efforts. Van Hilleary never would have been able to author such a plan without encountering serious opposition, particularly from the legislative black caucus.

But while they struggled to be heard, Bonnyman and advocates across the country had serious concerns about the way Bredesen's plans would affect the program's 430,000 TennCare standard enrollees—the people who ordinarily wouldn't qualify for Medicaid. For many people skimming over the details of the plan in their morning paper, the limits outlined in Bredesen's waiver didn't seem particularly draconian. Lab tests and X-rays limited to 10 occasions per year. Pharmacy benefits that include no more than six prescriptions a month. Inpatient hospitalizations capped at 45 days per enrollee a year and doctor's visits at 12 a year.

But nobody saves money in health care by imposing caps on healthy people. They do it by making it harder for ailing enrollees to rack up costly medical bills. The governor's plan would have disrupted the care of the program's most ill, forcing even those with debilitating illnesses to ration their doctor's visits and medications.

Lori Smith had been making a good salary working for a local insurance firm, but she lost her job and then her health care coverage when she was diagnosed with both multiple sclerosis and lupus within two years. In many states, Smith would be uninsured. She wasn't disabled and earned too much in her new job (which didn't offer health benefits) to be covered by Medicaid. TennCare, though, offers medical coverage and allows her to continue working in a new job, but she'll definitely suffer under the governor's waiver.

Smith says that she has had 22 lab tests and X-rays through the first nine months of 2004, 12 more than the proposed annual limit under the governor's plan. And these procedures aren't elective. Both lupus and MS require doctors to take CAT scans and monitor blood to track the progression of the diseases. Through October, Smith visited the doctor 19 times, seven more than the proposed limit. Also, her immune system is more or less shot, she says, which means she needs more medication, not less.

"This plan puts my doctors in a difficult situation," Smith says. "If I need nine drugs but can't afford all nine, I'm going to have to ask my doctors which ones I'll have to eliminate. They're not going to want to make that choice."

Bredesen's waiver also set a new, more restrictive definition for determining whether an item or service is "medically necessary." The advocates say that Bredesen's new standard is flat-out "mean-spirited," in that it emphasizes the cheapest course of medical treatment, rather than the most effective.

"When you get your car repaired, would you tell your mechanic to use the least expensive parts and just do an adequate job?" advocate Tony Garr asks. "We don't do that with out cars, yet the governor wants to do that with people's lives."

The Kaiser Commission reviewed Bredesen's waiver application and reported that such a plan is without precedent. The report noted that the governor's proposal is "significantly more restrictive" than other public- and private-sector plans.

One of the few politicians who has succeeded in the private sector, Bredesen has long expressed impatience at the bureaucracy and pace of government. Unlike in corporations, where executives can make decisions that affect stock price, revenue and payroll just by following instincts, public officials have to run their initiatives through an endless series of checks and balances. This is part of what makes government slow and inefficient. It's also part of what makes government generally more responsible than the Enrons of the world.

Bredesen's impatience and anger with the advocates reached a fever pitch because the governor believes that his federal waiver application is the best chance TennCare has to survive. And he believes Bonnyman would have gutted that opportunity by not revisiting the series of costly lawsuits that he and the state have settled over the last few years. Meanwhile, the consent decrees that emanated from those lawsuits made it unlikely that Bredesen's stab at TennCare reform could get off the ground.

Bonnyman was in a tough situation. He found the governor's plan unacceptable, calling it "the most dramatic reduction in a state health care ever." But even he admits that he was at a loss to figure out how the state could fund the program. He had a few ideas, including tracking how many and what kinds of medications physicians prescribe. The state's drug use rates are the highest in the country, and Bonnyman says that the governor has failed to address this. He also suggested the state pressure Blue Cross Blue Shield to accept more risk and manage care rather than merely serve as an administrator.

But Bonnyman himself acknowledged this week that his suggestions, if enacted, wouldn't plug the program's $650 million shortfall. On the other hand, it's folly to suggest that Bonnyman's consent decrees, if lifted, would alone provide the savings needed to sustain the program. Bonnyman, sources say, suggested that the governor consider a provider tax or lobby Tennessee Sen. Bill Frist to allocate more federal funding for the program. The governor's office found both alternatives completely unrealistic. Even still, they needed Bonnyman to revisit the consent decrees if their TennCare reform plan had a shot.

On Nov. 1, the day before the presidential election, Bonnyman requested that former Gov. McWherter, who started TennCare, meet him and Bredesen to help broker the impasse. McWherter and Bredesen have a warm relationship, having worked together on TennCare and prison reform. McWherter suggested that Bonnyman agree to a two-year moratorium on legal challenges and suspend the consent decrees to give Bredesen's TennCare reforms a chance to work.

"Gordon, you have to back out. The consent decrees are killing the program," Bredesen communications director Bob Corney recalls McWherter saying. The governor also pressed Bonnyman. "Gordon, the numbers don't add up." When the meeting was over, Bredesen was convinced that he would have to dismantle TennCare. Nine days later, he held a press conference, somberly announcing that, absent some drastic change of heart among advocates, 430,000 people would lose their health care coverage. Bonnyman then sent Bredesen a letter urging the governor to allow seven more days for last-ditch negotiations. The governor agreed but wasn't optimistic.

Staffers say the mood was grim at the governor's office in the wake of his announcement. Despite his pro-business leanings, Bredesen has said that he supports the concept of universal health care. But he wants the state's emphasis on health care and education to be more equitable. "In the end, it's about balance," the governor said in a recent speech about this issue. "Health care is important—vitally important—but so is education. It makes no sense for one facet of our responsibilities—health care—to be able to come to the table first and eat and drink all it wants, and then if there is anything left over, we then consider our other responsibilities."

After the governor's announcement about dismantling TennCare, the understated Bonnyman found himself the center of attention. While some lawyers love the spotlight, Bonnyman shuns it, preferring to grind out legal challenges and negotiate tough settlements behind closed doors. He endured several sleepless nights as he found himself in a legally unique and perilous situation.

As the lawyer for plaintiffs who sued the state for denying patients care and failing to follow federal law, he couldn't just suspend the consent order that protected them from further violations. And yet he couldn't stand by and watch the governor dismantle the program and leave people uninsured. Bonnyman says that he consulted with legal ethicists about his dilemma. Then, early Sunday morning, sometime after 12:30, Bonnyman decided that he'd file the motion to suspend the consent decrees. He made it clear at his press conference that he doubted whether the consent decrees were really responsible for the program's fiscal condition, but he felt he had to act to force the governor to keep the program running.

"I hope and I pray that TennCare enrollees who we have worked to represent for over a decade know how difficult it is to file this motion," Bonnyman said somberly in announcing the move. "We know those consent decrees, while vilified in the press, are not the reason the state is in trouble. And it's a grave disservice to the taxpayer and to the public to point to those consent decrees. It is the wrong diagnosis, and if you don't have the right diagnosis, you can't find the cure."

But now the program's fate is in the governor's lap. Sources say that the governor might still dismantle TennCare unless Bonnyman assures the governor that he won't file any more related lawsuits. (Of course, one way to avoid that would be to make sure the state's following federal law.) If the governor accepts Bonnyman's gesture, his federal waiver application probably will be approved. At that point, we'll finally discover whether the consent decrees were, in fact, costing the state money or whether they were a convenient scapegoat for a program that started spinning out of control years ago. It might be some of both. But now that Bonnyman has relinquished responsibility, TennCare's success or failure is Bredesen's to bear.

"I don't think he started this thinking, 'How many people am I going to kill?'," says TennCare advocate Lori Smith. "But now that it's been brought to his attention that with this plan people will die and people will suffer and he just ignored us and bullied his way forward, yeah, he's accountable for what's going to happen."