It has been, to speak plainly, a fiasco. After minor tinkering and major overhauls, TennCare Partners, designed to bring mental health and substance abuse care to the state’s poor and uninsured, is widely seen as a failure of epic proportions, the worst possible combination of government and privatization.
Two and a half years after its launch, the $350 million “behavioral” arm of the $3.7 billion Tenn-Care program has taken an incredible number of broadsides:
In March, the prestigious Journal of the American Medical Association said TennCare Partners was a “failed” program, one that had “started chaotically and soon deteriorated into a crisis.” It suffered, the publication said, from a “flawed design,” and warned states mulling similar programs that it was an example of how “privatization...in and of itself, may not improve service delivery or decrease costs.”
In June, the federal Health Care Financing Administration (HCFA), which had approved the program in the first place, said TennCare Partners “teeters on the edge of collapse,” citing declining care levels, poor record-keeping, and rapidly declining financial reserves.
In July, Tennessee Justice Center attorney Gordon Bonnyman filed a class-action suit in U.S. District Court on behalf of thousands of people the suit says receive inadequate care or find themselves in Kafka-esque bureaucratic nightmares.
Last winter, a state legislative committee heard scores of witnesses speak of payment and communications nightmares, as well as treatment denied or shabbily given.
Study after study paints a picture of an inept, poorly administered program, one that has left providers unpaid and alcohol and drug patients caught in a revolving door of short-term detox and release, and whose financial instability and irregularities have wreaked havoc for some physicians, clinics, hospitals, and Community Mental Health Centers. The region’s treatment centers say they are often paid much less than what it costs to treat Tenn-Care patients and sometimes aren’t paid at all. Some have simply provided care without reimbursement or have stopped taking TennCare patients altogether. All told, TennCare Partners has helped to unravel further an already chaotic alcohol and drug treatment industry.
The latest round of agency changes was announced in July by Tennessee Department of Health Commissioner Nancy Menke. Those changes, including an increase in some benefit levels, tightened oversight on care providers, and the establishment of “technical advisory groups” to provide advice and feedback, have been met with guarded approval in some corners of the treatment industry.
“The proposed changes hold promise of bringing some remedies to some existing problems in the system,” says Bob Currie, head of the Alcohol and Drug Council of Middle Tennessee, “but how they get implemented will determine whether we have yet another round of problems.” In most cases, there is a straight-ahead “show-me” attitude.
Dr. David Knott, who treats addictive disorders at the Memphis Mental Health Institute, says simply, “I’ll believe it when it happens.” Deborah Hillin, spokesperson for the Tennessee Alcohol and Drug Association, which represents not-for-profit treatment centers across the state, is equally skeptical. “Time is going to tell, but this has been overhauled two or three times, and they keep telling us they’re going to address the problems they’ve had, but so far, nothing’s changed. I guess I’m not optimistic.”
The new changes, called Phase III and slated for implementation in January, must still be approved by HCFA, which has yet to receive some of the review material it needs. Given Partners’ track record, it will likely take awhile—key information from TennCare Partners has often been nonexistent, unavailable, or grudgingly given.
Partners has experienced an incredible amount of patchwork change already, much of it forced by complaints from subscribers and reviews by outside agencies. It has also seen more than its share of backtracking, false starts, and crises big and small. The constant has been the frustration and bewilderment of patients and providers who have been unable to get TennCare to provide treatment coverage.
“We have fought and fought to get real coverage for people who have TennCare,” says Vicki Neal, clinical director of Pathfinders, whose inpatient and outpatient treatment centers are headquartered in Gallatin. “We’ve fought, too, to have TennCare quit with partial solutions and recognize that residential treatment is cost-effective for them in the long run.”
“If we provided service only in accordance with what TennCare provides,” says Harold Montgomery, executive director of the Jackson Area Council on Alcoholism and Drug Dependency, “we would be compelled to close our doors. We would be providing a totally inadequate service doomed to failure.”
New Life Lodge, a treatment center in Burns, Tennessee, has stopped dealing with TennCare altogether. Under TennCare rules, says director of marketing Laura Gatrell, the facility operated a “revolving door treadmill, detoxing patients and turning them out in a few days. It got to the point where [owner Jerry Gilliland] said, ‘I can’t do this anymore. I wouldn’t send my own family here, and I won’t own a place that does this.’ ” Faced with the prospect of not being reimbursed for what it costs to treat TennCare patients, New Life Lodge simply stopped accepting them.
In 1994, TennCare replaced Medicaid, the joint federal-state program that provides medical assistance to the poor. Tenn-Care today has more than 1.2 million enrollees—838,000 Medicaid recipients and 436,000 from the ranks of the uninsured and uninsurable, people who were not served under Medicaid. (Enrollment is currently closed to uninsured adults.)
TennCare replaced Medicaid’s more expensive fee-for-services approach with managed care. Each TennCare enrollee is assigned a managed care organization. That organization is paid a fixed amount for each enrollee, and provides medical treatment to that person in return.
It was hoped that this approach would stop the wastefulness that often marked Medicaid. If a patient under Medicaid needed—or wanted—a medical test, in many cases he or she simply went and got it. The physician or hospital then billed Medicaid. And the bills got paid, regardless of the test’s medical necessity.
Because the dollars flowed so freely, the system was rife with waste and fraud, with unnecessary tests being just one example. In a very real sense, TennCare has seemed to stop that kind of abuse.
But in an effort to become more efficient, TennCare has prompted complaints of its own. Because firms improve their financial picture by denying care, some say the program has gone overboard, particularly in the treatment arena. The bureaucratic inefficiency of government, and its unresponsiveness, cause considerable frustration as well.
“From the TennCare recipient’s point of view,” says state Rep. Ben West, who headed the legislative committee that studied Partners last winter, “both financially and programmatically, TennCare has veered away from its original intent. Since its inception, it appears that the clients’ needs are secondary. Having been involved since its birth, I can assure you that the financial aspects take priority.”
“There are some good people working at the TennCare Bureau who care about the consumers,” adds Lisa Wilson, program director of the TennCare Partners Advocacy Program, a sort of agency ombudsman, “and there are also plenty of people who are charged with looking at finances, and that seems to be the bottom line—that’s what managed care is. The budget is the primary issue.”
In July 1996, TennCare Partners was “carved out” of TennCare to handle mental health and addiction treatment services separately. It would delegate those services to five managed care companies known as behavioral health organizations (BHOs). Those competing firms ultimately merged into two—Premier Healthcare Systems and Tennessee Behavioral Health—which then contracted for care with treatment facilities, some of which were in their own corporate families.
Not long after Partners was implemented, heated opposition came from not-for-profit Community Mental Health Centers, which provided mental health and treatment services to clients in their locales but were not seriously considered able to handle BHO status for Partners. In addition, the state-run Regional Mental Health Institutes expressed concern that Partners might adversely affect their programs. Both claimed, among other things, that a substantial portion of Partners’ $323 million first-year budget would otherwise have gone to direct community services. Of that Partners budget, the state took $6.8 million for administration; the rest went to the BHOs, which were to provide treatment and were allowed 10 percent for administration and profit. Facing severe loss of revenues, many of the nonprofit mental health centers scrambled to lay off workers; at least one closed altogether. Many claimed the safety net they had provided for so long simply disappeared.
There was generally acknowledged confusion and discontinuity of care. Physicians, patients, and mental health providers all had trouble dealing with the new system, and the rapid switch from Medicaid to Partners was strongly opposed by the Tennessee Medical Association and the Tennessee Academy of Family Physicians, among others, while the Tennessee Alliance for the Mentally Ill was among those expressing grave concerns.
Almost at once, the TennCare Division of the state Department of Commerce and Insurance found what it termed “deficiencies” in the operations of both Tennessee Behavioral Health and Premier Healthcare Systems, “including deficiencies in the claims processing area.” As a sanction, the state began withholding 10 percent of its payments.
Some claimed that to make up for the shortage of money from the state, the firms withheld payments to providers. By early 1997, the Community Mental Health Centers and Regional Mental Health Institutes claimed the BHOs owed them over $40 million. In fact, the state received so many complaints about Premier and Tennessee Behavioral Health over slow or absent claims payments and insufficient access to services for patients that it stopped paying them altogether. Nine months after TennCare Partners was established, there was talk of folding it into TennCare.
The BHOs quickly decided there wasn’t enough money to provide the care they were required to deliver and that what money did come to them came too slowly. Unless more was forthcoming, they said, they would not renew their contracts. Premier ultimately gave notice that it wanted out altogether.
What became apparent was that steady management was not going to be TennCare Partners’ forte. No one could be sure of the levels of care that patients were getting because of poor record-keeping. Oversight was problematic. It was originally split between the state Department of Finance and Administration and the Department of Mental Health and Mental Retardation, but was then shifted to the state Department of Health, with oversight of the BHOs provided by the Department of Commerce and Insurance.
Early in 1997, in response to patient and provider complaints, as well as urgent requests from patient advocacy groups, HCFA, the federal agency overseeing TennCare, launched an investigation. The agency gave the state 30 days to comply with a list of corrective actions, which included lessening financial risks for care providers. Perhaps the most telling, though, was HCFA’s simple demand that Partners find some way to determine whether the BHOs were doing what they were supposed to be doing, and whether patients were getting the care they needed. It was a demand for accountability at its most basic level.
Partners began making changes even before it officially received the HCFA report, and HCFA acknowledged that steps were being taken in the right direction. By mid-1997, a TennCare Legislative Oversight Committee reported some improvement in claims processing by the BHOs, and Premier announced that rather than leave, it would maintain its contractual relationship with Partners.
Then last fall, First Health, Inc., which operates as a BHO in other states but was hired by Tennessee to conduct an external quality review, said Partners provided no preventive care and often little or no follow-up. The firm cited numerous deficiencies in the care the BHOs were providing, and said patients were denied care without being told of their rights of appeal. The state withheld the report from HCFA for months.
The state Comptroller’s Office early this year charged that Tennessee Behavioral Health owed $20 million to providers and hospitals and wrongfully denied benefits in nearly a third of the claims it reviewed. The report prompted The Tennessean to charge, “The system isn’t working for patients. It’s not working for providers. And it’s certainly not working for this state.”
Until recently, the posture of TennCare Partners has been to dismiss many of the claims against the program as “anecdotal,” or not supported by widespread evidence. But in the face of numerous studies, reports, and complaints, it has been forced to admit otherwise. Earlier this year, for instance, TennCare Partners and Tennessee Behavioral Health were sued by Cherokee Health Systems, which operates a Community Mental Health Center in northeast Tennessee. Cherokee claimed it was owed $6.5 million by TBH and asked the state to fix the system. TennCare responded that the Partners Program was indeed working to correct such problems, by paying extra monies to the Community Mental Health Centers, hiring a management consultant, appointing a 22-member Advisory Committee, establishing tougher penalties on the BHOs, and more.
TennCare Partners officials also claim that the continued participation of the BHOs and provider networks, as well as audit results from the state Department of Commerce and Insurance, are proof that the system is at least working. And they say things are getting better.
“I think we’re doing the right things,” says Theresa Clark Lindsey, chief deputy commissioner of the state Health Department. “We’re trying hard to serve people, and I think the latest changes will make a tremendous difference in the lives of the people who need these services.”
Gubernatorial spokeswoman Beth Fortune added, “The governor has said for quite some time that we’ve made mistakes and that we’ve had problems, but he wholeheartedly believes we’ve made progress in the last several months. It’s not a perfect program, and there’s a way to go, but the governor feels very good about the progress we’ve made.”
A subtantial portion of the problem, she concedes, may well be communication, which many in the treatment industry say has been one-sided. “When the governor announced his initial changes [to TennCare Partners] in March,” she said, “we did make the effort to listen. We’ve reached out to advocates and providers and have tried to get their input.”
If there is one legitimate bright spot in those March initiatives, it is the push to get the BHOs to deal with unresolved claims regarding money owed to providers. In the past several months, the number of such claims has fallen from 200 to about a dozen.
Lindsey—and others—also claim that this year’s hard hits from the Journal of the American Medical Association, HCFA, and others represent old news. Some do reflect studies completed months before the reports were issued, but as recently as June, the TennCare Partners Monitoring Group, an independent group of mental health advocates, told the recently appointed Governor’s TennCare Advisory Board, “The current TennCare Partners Program is meeting neither the needs of enrollees nor the needs of their families where substance abuse is involved.”
If there is a single, predominant complaint about the differences between services offered by Medicaid and Tenn-Care Partners when it comes to addiction, it is in length of treatment.
“The benefit package under TennCare is a lot more restrictive than it was,” says Hershell Warren, director of Meharry Medical Center’s Elam Community Mental Health Center. “We are now primarily providing detox. In the past we had the ability to provide a longer length of stay and more aftercare.”
Medicaid was never set up to provide full, classic, 28-day treatment. It was, however, possible to get 10 days of hospital-based detoxification, and those who knew how to play the system—both patients and care providers—could get more. When managed care arrived, insurers grasped that it was often the insurance policy rather than the degree of addiction that determined the length of residential stays in many treatment centers. Having seen their policies abused for many years, they began to press for outpatient alternatives.
The treatment industry maintained—and can point to some corroborating large-scale studies—that the longer the treatment, the better the chance of recovery. They are also generally convinced of the superiority of residential treatment, particularly for addicts and alcoholics with less-than-stable lives. Others, though, including Green Spring Health Services, Inc., a Maryland-based firm supplying mental health and substance abuse services to 17 million people nationwide, cited “the lack of convincing scientific proof that residential treatment is more effective than outpatient treatment.”
Whatever the ultimate merits of either argument, Green Spring, which developed the criteria used throughout much of the industry for intake and treatment, made its voice, and its inclination toward outpatient treatment, heard in Tennessee. A wholly-owned Green Spring subsidiary, AdvoCare of Tennessee, manages both Premier and TBH, the two BHOs that handle the Partners program. It manages the former under contract to its owners, Magellan Health Services and Columbia Behavioral Health, and the latter under contract to Knoxville’s Preferred Health Partnership Companies, Inc., which is finalizing the sale of TBH to Magellan. Green Spring has since become part of Magellan as well.
Chuck Klusener, who speaks for both, told Ben West’s legislative committtee, “By focusing on individual patient needs, [Premier] has been able to change the focus of alcohol and drug treatment from restrictive, expensive inpatient programs to early intervention with more flexible, more aggressive, and less costly outpatient programs. Here, dollars go further and hold greater promise, since patients are treated earlier in the course of their illness.”
Not everyone shares his sanguine appraisal. The Green Spring-generated guidelines for admission are stiff, according to Janine Clayton, utilization review nurse at Cumberland Heights, the region’s oldest treatment center. For inpatient treatment, someone whose problem is alcohol dependency, for instance, has to be drinking “enough of it to cause medical withdrawal that could be an endangerment to life—seizures and DT’s”—before an insurer would OK admission. It was, Clayton adds, “next to impossible” to get payment for inpatient detox for someone with a drug addiction. But, she adds, “they’ve loosened up on that.”
Dr. Murray Smith, a specialist in addiction medicine who was medical director at Baptist Hospital’s Alcohol and Drug Treatment Center, and is now medical director of New Life Lodge, has had a first-hand view of the direction the insurance industry has been taking. Like his counterparts in many treatment facilities, he developed an outpatient program at Baptist because of the cutbacks in funding. “In 1990, with Medicaid, we could get three or four weeks’ treatment on everybody with no problem,” Smith says. “Then progressively the insurers kept shortening the stays and demanding medical criteria. Patients had to be puking, sweating, and shaking. They had to be sick enough to be in a regular hospital to go into detox.”
Where the person had come from, whether it was a housing project or a stable family in a middle-class environment, made no difference when it came to determining the level of treatment or reimbursement. Given these and other considerations, New Life Lodge decided to return to more intensive, longer-term treatment, and in essence to opt out of its relationship with TennCare and some other private firms. As a result, company officials say the facility lost $600,000 last year. New Life does have contracts with other managed care companies and with corporations like Saturn, but senior vice-president Kevin Duvall says New Life often treats patients for longer than their insurance will cover, which has contributed to a losing bottom line.
Others who face problems with TennCare Partners have simply decided to struggle with the system as it is.
“Over the last three or four years,” says Elam’s Warren, “working under managed care has been difficult because it has changed our approach. But I think we are now able to work within the system as provided—that’s what we have to do in order to survive.”
It is an adjustment not all providers make happily. “TennCare is the worst as far as wanting to give them [inpatient] days,” says Pathfinders’ Vicki Neal. She speaks of the “insanity” of day treatment for crack addicts who must return at night to projects where drugs are readily accessible. “They [TennCare Partners] just kind of blow that off,” she says. “They tell us, ‘Well, that’s all we’re going to give you.’ ”
Such an approach baffles many in the treatment industry.
Tom O’Brien, clinical director of the Department of Community Corrections’ Residential Program, a division of Judge Seth Norman’s drug court, says, “Tenn-Care’s just throwing that money down the drain if they think that in 10 or 14 days you can get a handle on a lifetime addiction.” Judge Norman’s program, O’Brien says, often takes six to seven months.
The problem remains acute for the poor and for those on the margins of society.
“Unfortunately, the intensity of the services we provide through TennCare may not be enough for a lot of the homeless people that we serve,” says Brenda Byrns, a mental health specialist at Nashville’s Downtown Clinic, which provides a range of alcohol and drug treatment services. “It’s just too short a treatment period. That’s one reason we have extended our own treatment program. We are able in a way to provide treatment outside the TennCare system. Fortunately, we sometimes have some funds to do that. We feel people who are homeless need some extra attention, and they’re just not going to get that through TennCare.”
Kaki Friskics-Warren, the director of Renewal House, a residential community for addicted mothers and their children, says most of the women she sees have been abused physically or sexually, are in poverty, and have suffered traumas that include seeing family members murdered. “You can’t deal with those core issues in three weeks,” she says, “so what’s happened is we’re putting a Band-aid on it and sending them away and so they’re recycling back through.” She says that while the state has been supportive, “the biggest problem right now is that we’re designing quick fixes for a very complicated problem. We want to repair lives that have been traumatically damaged, and you can’t do that in a short period of time.”
“The recidivism is unreal,” agrees Cumberland Heights’ Clayton. “We’ll see them come back here, sometimes three or four times a year, and there are probably more repeaters in TennCare than anything else. That population needs a lot more structure and help. The lack of a stabilization period doesn’t give them time to get on track, particularly for people in unsafe home environments. If all you give them is detox, you’ve just wasted your money and I’ve just wasted my time, because they’re going back into that environment and they’re probably not going to stay sober. That’s where I get the most frustrated.”
The class-action suit filed in July on behalf of patients alleging inadequate treatment and bureaucratic tangles deals primarily with the mental health side of the program, but its themes—denied treatment, termination of benefits without due process, bureaucratic and paperwork nightmares—are echoed in the alcohol and drug treatment community.
“We’ve seen people have a very tough time staying on TennCare,” says Elliott Garrett of the Dede Wallace Center, whose many services include drug and alcohol treatment. “They’ve been dropped because they didn’t pay a premium they didn’t know they were supposed to pay, and they’ve been dropped for no apparent reason.” Even those whose enrollments are secure have difficulties. “The most difficult thing is to get someone who needs it into the hospital, and for them to stay in the hospital.”
Garrett is heartened by the latest round of proposed changes, as is Elam’s Warren, who sees hope in the fact that they lift some restrictions on patient care. “We will be allowed to serve any TennCare-eligible or any TennCare enrollee based upon medical necessity,” he says.
That wasn’t always the case. Until these Phase III changes, which will take effect in January, participants have had to be severely and persistently mentally ill or seriously emotionally disturbed to qualify for some benefits. The policy switch is, of course, good for those now eligible for new benefits, but, critics charge, it also simply stretches the same pot of money even further and makes competition for those dollars that much keener. The Phase III changes would also assess BHO performance and issue “report cards” on them, penalize BHO noncompliance, and toughen guidelines for case management.
Officially, TennCare Partners says the changes have been made as a result of a study by an outside consulting firm, and input from public meetings. State Rep. West, for one, sees some of his committee’s handiwork in the results.
“Many of our proposals,” he says, “are being incorporated within the policy changes recently announced by TennCare. Unfortunately, these changes will not go far enough as they relate to the A&D [alcohol and drug] abuser.” He cites, among other things, the fact that “the new changes do not address the needs of those abusers who are incarcerated.”
Under the new proposals, residential treatment could be provided by what amounts to the last remaining safety net, the $21 million in federal block grants administered by the Dept. of Health’s Bureau of Alcohol and Drug Abuse Services. That money is combined with state money to fund prevention and treatment programs, including halfway houses. While care providers are grateful that such expanded treatment will be possible, they see potential problems with such a system. First of all, the two sources of care—Partners and the separate block grant program—could set up a “ ‘He’s yours’—‘No, he’s yours’ ” scenario, according to the Alcohol & Drug Council’s Currie. Second, only a small population has historically been handled under block grant funds, and many see it as a fragile resource. “That’s the only place there’s somewhat of a continuum,” says TADA’s Hillin. Since TennCare will not provide residential treatment, she says, “We’re really concerned that if they roll the block grant dollars into TennCare, there goes all your residential care. We would really hate to see that go away.”
Heading off the potential for overlapping claims would be one aim of a centralized intake and assessment system instituted in March. It is handled by county health departments and designed to assess people seeking alcohol or drug treatment, feed them into the TennCare or block grant systems, and follow up on them. Some providers criticize the system, saying they themselves are best qualified to determine the level of care needed by someone seeking treatment. Training for health department nurses and staffers can vary from county to county, they say, and some may not know much about alcoholism or drug abuse. Others see simply one more layer of bureaucracy, another step that might easily discourage some people seeking treatment.
On the other hand, some charge that to allow the treatment facilities to assess needs is to return to a system where the fox was guarding the henhouse. One of the spurs for the centralized system, in fact, was abuse of the block grant program. It was not always easy to keep track of who, if anybody, was in the treatment center beds the block grants were paying for.
Most importantly, though, centralized intake helps undo more of the foundations of TennCare’s original goal—to bring some private management expertise to government-funded treatment.
“Now the state’s beginning to take it back,” says Currie. “That’s not to say it shouldn’t be done, but this really gives the gate-keeping responsibility not to the BHOs but to these central units. Soon all the BHOs are going to do is write the check.” And, of course, take a cut.
What comfort he finds in the move may lie down the road. “Hopefully,” he says, “this will stabilize the system with quality care so that it can be folded back into TennCare in the future.”
Many of those in the treatment industry look beyond the recent changes and agree with Currie that it may be time to rethink TennCare Partners’ very approach.
“I would get rid of this carving out of the mental health and substance abuse,” says Dr. Peter Martin, director of the Vanderbilt Addiction Center. “Medical, psychiatric, and addiction treatment shouldn’t be treated differently. The trouble is if you treat the medical side on one hand and the addiction on the other hand, it’s possible a patient can fall between them and not get proper care. It’s contrary to what we’re teaching our students in medical school. We’re teaching them to integrate the body and the mind and the soul. It’s such an artificial cutoff, parceling out the mental health so some other person can make money on it.”
“The whole idea of people making money out of denying care for whatever medical reason is wrong,” adds John Mulloy, former longtime head of the Alcohol and Drug Council. “The whole concept of a [managed care organization] is to deny treatment. The more treatment they deny, the more they make. And generally those that are making those denial decisions [for A&D treatment] are clerk-typists.” AdvoCare, meanwhile, denies that is the case, saying, “Prospective care can only be denied by a physician.” In addition, the vast majority of appeals filed through TennCare Partners’ own appeals process over denied care are approved. Unfortunately, those knowledgable about the system say, few recipients know and use the process.
The state, Mulloy adds, spends a great amount of money dealing with the results of the addiction problem—incarceration, social services, and medical services being the prime examples—but little with the problem itself. “We’ve always lent it a lick and a promise,” he says, “and as the problem grew, you were starting from so far down that you had a catch-up problem. I maintain there is probably enough money in the system today if it’s well-used. The thing that the state wants is total control.”
“Good treatment works,” says Joe Morgan, co-founder of Discovery House, which provides an AA-based, 30-day program for alcoholics and addicts in Burns, Tennessee. “The thing that scares me is the state doing it. People say, ‘Well, they’re not doing it; they’re just funding it.’ The hell they ain’t doing it. When you start taking their money, they’ve got their hands in the pie. They’re going to tamper with it.”
Some in the treatment industry go so far as to recommend a state drug czar. Others advocate returning much of the state’s money to freestanding programs led by recovering people using AA principles. Others say it is not so much philosophy that is needed as simple managerial competence. Critics and even supporters want to know what care has been delivered to how many people.
“It’s still amazing that they can’t tell how many dollars are going toward alcohol and drug treatment,” says TADA’s Hillin. “You wonder why we’re skeptical.”
