TennCare III STC Comments by DRT

September 9, 2021

Submitted to:

The Honorable Xavier Becerra, Secretary 

U.S. Department of Health and Human Services Hubert H. Humphrey Building

200 Independence Ave., S.W. Washington, D.C. 20201

Re:       TennCare III Project Approved Special Terms and Conditions and “TennCare III” (Project Number 11- W-00369/4), which was approved on January 8, 2021, under the authority of section 1115(a) of the Social Security Act (the Act).

Dear Secretary Becerra:

Disability Rights Tennessee (DRT) appreciates the opportunity to comment on the approved special terms and conditions (STCs) of the TennCare III project. Disability Rights Tennessee (DRT) is the federally mandated Protection & Advocacy system (P&A) for the State of Tennessee. As such, DRT is authorized by multiple federal statutes to, among other things, pursue administrative, legal, and other remedies on behalf of people with disabilities whose federally protected rights are being violated including, but not limited to, people with disabilities who are or will be Medicaid recipients and/or beneficiaries. Among other actions, DRT discusses with the people it serves under various P&A statutes issues concerning matters such as the proposed TennCare III Demonstration which are the subject of this comment.

Had DRT had the opportunity to comment on the TennCare III Proposal, as is required by the Act, it would have expressed these concerns to CMS and DHHS previously. DRT very much appreciates the fact that DHHS/CMS has now reopened the comment period on TennCare III.

I) DRT Clients’ Eligibility for Medicaid Services

A significant percentage of the persons with disabilities (PWDs) who DRT serves are eligible for and/or receive various Medicaid benefits delivered by TennCare, which is the State Medicaid Agency, its Managed Care Organizations (MCOs), the Department of Intellectual and Developmental Disabilities (DIDD) or its contractors, the Department of Mental Health and Substance Abuse Services (TDMHSAS), or jointly with Local Education Agencies (LEAs) or through EPSDT service providers. DRT is also involved with a significant number of PWDs who are on a waiting list for waiver services or are enrolled in waivers, such as the ECF waiver, and are approved for services but cannot get services due to gaps in service, network inadequacy, and/or provider and state agency refusal.

As an example, one person DRT serves is mentally ill, deaf, a member of the Deaf community, and she uses American Sign Language (ASL) to communicate. She has recurrent mental health crises and has been hospitalized a number of times. She is a Medicaid/TennCare recipient. Since being placed at her current boarding home by TDMHSAS, she has not had access to sign fluent staff, sign fluent therapists, or sign language interpreters. There are multiple persons living in the home, but none of them communicate using sign language. For all intents and purposes, she has been robbed of her language and lives in communication isolation. Even though a condition of the services she receives at her mental health boarding home is participation in daily therapy services, she merely sits there without understanding because the therapy services are not delivered in ASL, and she is not provided an interpreter. This has gone on for many months. Until very recently, she could not even use a phone, as she had no videophone (VP), a device which allows individuals who are deaf or hearing impaired to make independent phone calls with the help of a camera and a qualified sign language interpreter. When DRT staff visited her home, it was observed that the VP was sitting in a drawer in her room. No one had bothered to install it for her, making her even more isolated, and, theoretically, preventing her from calling a mental health crisis line, 911, or from independently reporting any incidents of abuse and neglect at the home. Recently, a DRT attorney went to see her with an ASL interpreter and discovered that, because no one in the home is sign fluent, our client had no idea she could receive a vaccine for the COVID- 19 virus. The attorney and interpreter went with her to the nurse’s office and immediately signed her up for a vaccination. Neither TDMHSAS nor TennCare require the sign fluent delivery of services to persons who communicate in ASL.

Even though she is being claimed as a service recipient, and TennCare is being billed for group therapy services, she is not actually receiving these services because they are not being provided in a language she understands, i.e., ASL. Despite being notified by DRT of this issue, neither TennCare nor TDMHSAS has made any change to the way she received therapy services at the boarding home, including the mandatory group therapy sessions she attends every day. She also desperately wants to work outside of the home, but is being told by the house manager that she cannot or she will be kicked out of the home. The home’s reasoning is that she would not need the level of care provided at the home if she were to work, given that she would not be able to attend the group therapy sessions. The ironic part of that is that she receives no benefit from the group therapy sessions that bind her to the house and prevent her from obtaining gainful employment. It is difficult to understand how she is supposed to receive any benefit from these therapy sessions when there is no effective communication in that setting, given that she is not receiving those services in her native language of ASL.

This client also had enormous difficulty navigating the maze of the TennCare application for services process. There was no one who was sign fluent at the service provider to help her. DRT finally helped her accomplish that successfully, but she went many months without TennCare services even though she was eligible. Even though there are no ASL services available to make her daily required therapy sessions in any way meaningful, she is required to attend them but cannot effectively participate. As a result, she is prevented from working and she is kept in a greatly more restrictive environment than necessary, without effective communication, in violation of the ADA and Section 504 as well as the Act. As a result of this ineffective and backwards treatment, she is losing her language. DRT has serious concerns as to whether billing TennCare for therapy sessions, which are not really therapy sessions because she cannot meaningfully participate is, in effect, a violation of the False Claims Act.

Simply put, she is not getting the therapy TennCare is paying for every day, and she is not being accommodated as required by the ADA. This violates any number of the so-called quality improvement indicators listed in CMS’s approval of TennCare III as requirements.

II) Inconsistency of Approval for Tenncare III with requirements of Section 1115 (42 U.S.C. §1315)

DRT has serious concerns that TennCare III is not consistent with the terms and requirements of the Act, specifically Section 1115 which governs waivers of the Act’s requirements. In addition to the fact that TennCare III does not meet the requirements of section 1115 of the Act, it restricts low-income Tennesseans’ access to Medicaid coverage and services and exacerbates existing racial health disparities in the State. We have described below our specific objections to the core features of the project.

III) Status and Unattainability of the Quality Improvement Indicators or Quality Metrics

DRT has commented on these issues/concerns in previous correspondence to TennCare. Those concerns have not been alleviated. They revolve around the ability of TennCare to develop and assess the achievement of quality metrics as required by the original approval of TennCare III. For Tennessee to qualify for shared savings utilization under the TennCare III Demonstration, that is to become eligible to use the Designated Savings Investment Program (DSIP), it must develop and meet the requirements of a Shared Savings Quality Measures Protocol (SSQMP), which CMS must approve.

Under the previous approval issued on January 8, 2021, Tennessee is eligible to receive through the Tenncare III Demonstration a portion of shared savings dollars from the federal government. To be eligible for the receipt of Shared Savings, Tennessee must meet the requirements of the Shared Savings Metric Set, which was published by TennCare on March 8, 2021. Of the ten shared savings quality measures, two have to do with follow up for a person with mental illness after they have experienced hospitalization. One measure is for children ages 6 to 17 and one is for adults ages 18 to 64.

DRT has a number of youth as clients who have experienced the need for hospitalization, and then, after hospitalization, the need for residential placement in a psychiatric residential treatment facility (PRTF) for the long term, and their future is bleak. A recent article in the Chattanooga Channel 10 News highlights how challenged the delivery of mental health services is in Tennessee.This report by WBIR Channel 10 News points out that emergency room visits for mental health reasons for children are rising rapidly. It has been that way since September of last year. The gap between resources and children’s mental health needs is “reaching disastrous proportions.” The article points out that mental health experts are having trouble connecting children with experts because most are fully booked.

So, given this gap in resources, how exactly is TennCare going to ensure that follow up after hospitalization occurs, whether for children or adults? How will the shared savings metric be met so additional federal dollars can be drawn down? To be blunt, it is not going to happen because there is no one available to do the work.

Likewise, DRT has a number of clients and investigations ongoing involving youth committed to the custody of the Tennessee Department of Children’s Services (DCS) for different reasons and housed at a facility DCS either owns and runs itself or at a facility contracted by DCS in Tennessee or elsewhere. Some of these children are receiving Medicaid services, and some are not due to being in juvenile justice facilities. Nearly all are victims of Adverse Childhood Experiences (ACES) and/or childhood trauma. Many, if not all, are overly medicated, such that they are receiving two or more daily psychoactive medications, many to control sleep. They are vastly disproportionately members of minority or nonwhite groups. They are, for the most part, individuals who rely, and whose families rely, on Medicaid services for mental health care. And in Tennessee, they are greeted with institutionalization and lack of effective (or, in many instances, any) treatment for their mental health needs. Rather, they are medicated and locked up, whether in mental health facilities or juvenile justice facilities. There they often experience abuse from peers and abuse from staff. Admittedly, children housed in juvenile justice facilities are not Medicaid eligible, but where were they before that, and what services did they receive? Is Tennessee going to use any shared savings it gets to spend in juvenile justice facilities to try and shore up services there? Why not use Medicaid to provide the necessary mental, behavioral, and other health services before these youth are committed to DCS? If not, as is historically true, the health care services differential falls very much more on nonwhite youth than on white youth, and has the predictable and proven effect of helping to create a school to prison pipeline for minority youth.

IV) Racial Equity

Due to the ongoing effects of structural racism and inequality, the poverty rate among Black and Hispanic Tennesseans is roughly twice as high as the poverty rate among white Tennesseans.ii As a result, nonwhite individuals are much more likely than white individuals to rely on Medicaid for their health care.iii By restricting access to Medicaid coverage and services, TennCare III disproportionately harms people of color.

In so doing, the project will also perpetuate and exacerbate existing racial health disparities in the State.iv For example, the infant mortality rate in Tennessee is almost twice as high for Black infants as for white infants. And critically, Black Tennesseans have been disproportionately affected by COVID-19, accounting for 20% of cases and 36% of deaths and only 17% of the population.vInstead of granting Tennessee waivers that promote racial health disparities and inequities, CMS should encourage the State to reduce these gaps through Medicaid expansion. Tennessee is one of only twelve states that still deny their residents access to Medicaid under broadened eligibility rules established by the Affordable Care Act. Empirical research establishes conclusively that Medicaid expansion has reduced mortality and morbidity.vi It also enhances families’ financial security, thereby contributing to their ability to address social determinants of health.

DRT provides individual case services to hundreds of persons with disabilities each year. In the last year, 26.1% are persons who are Black. Also in the last year, DRT provided individual investigation services to over a hundred persons with disabilities, of whom 42.9% were Black. We also have several systemic investigations in which persons with disabilities are affected, and those investigations involve persons who are Black vastly more than their prevalence in the general population.

DRT is actively monitoring and conducting investigations at a DCS facility in rural Tennessee. Of the youth interviewed by DRT at the facility, ninety-six percent (96%) were Black. Over ninety percent (90%) were prescribed psychoactive medications, and all were described by the nursing staff as having PTSD. All were victims of Adverse Childhood Experiences (ACES), and all had experienced childhood trauma. These youth could be described as victims of the structural racism and inequality in Tennessee. Furthermore, they have been directly affected by the existing racial health disparities in Tennessee. As victims of childhood trauma, they have all experienced the now well documented negative effects of trauma on health.

Specifically, a recent meta-analysis considers how ACES affects the epigenome.vii In short, ACES is associated with methylation of specific gene sites, and long-term this is associated with development of psychiatric illness in adulthood. Childhood maltreatment may mediate epigenetic mechanisms through DNA methylation, thereby affecting physiological responses and conferring a predisposition to an increased risk for psychopathology and forensic repercussions. In other words, the trauma and ACES these youth have experienced before and during their placement at this facility have affected their ability to respond physiologically, often as a result of the ongoing effects of structural racism and inequality,

This stress is a social determinant of health. Social and economic factors can shape individuals’ health behaviors, and social and economic factors are the primary drivers of health outcomes.viii

V) No Retroactive Coverage

One direct result of the lack of retroactive coverage in Tennessee, even with the exceptions of EPSDT services and pregnancy services, is an increase in financial pressure on small hospitals in Tennessee. Tennessee has experienced more rural hospital closures than any other state.ix Tennessee’s hospitals, like those across the nation, experienced a dramatic drop in revenue throughout the COVID-19 pandemic, and they continue to lose money.x The recent closure of Scott County hospital in Jamestown means that travel times for ambulances taking persons to emergency rooms has increased dramatically, resulting in potentially life and death consequences for the persons transported.xi With the closure of Scott County hospital, getting to the next available emergency facility is a time consuming and difficult task. For someone who is having a stroke or is otherwise in need of immediate emergency medical care, this is a dire situation.

Likewise, DRT knows of low-income people who are eligible for TennCare who have incurred huge medical expenses which TennCare has not covered. This happens because TennCare has a waiver of the requirement in the Medicaid Act that coverage is retroactive for three months. Many of the people affected by this waiver have had catastrophic injuries and were hospitalized.

By the time they learned that they were eligible and were able to apply for TennCare, tens of thousands of dollars in medical expenses have accrued, which TennCare did not cover. Many of these individuals will be crushed by medical debt, go into bankruptcy, and then the small rural hospital will get little to nothing to keep its doors open, through no fault of either party.

Given the stated purpose of the approval of the TennCare III Demonstration to be able to realize economies, it is difficult if not impossible to see how there will be any improvement in the plight of rural hospitals in Tennessee. As a result, health outcomes of rural Tennesseans will not improve.

CMS should withdraw the waiver permitting Tennessee to eliminate retroactive coverage for Medicaid beneficiaries. There is nothing experimental about waiving retroactive coverage. Numerous states have been allowed to ignore the requirement since at least the 1990s. Tennessee itself has had a waiver of retroactive coverage since the TennCare project began in 1994. To the extent that the waiver had any experimental value at that time, that is not the case now. Allowing the State to continue the waiver would, at this point, simply be giving Tennessee permission to evade a federal requirement, and numerous courts have said that would be improper use of section 1115.xii In fact, the lie is put to the proposition that there is anything experimental about the approval of TennCare III by the simple fact that as of August 2019, no state that had a waiver of retroactive coverage (of which there were 30 demonstrations in 27 states) had done a formal evaluation of these policies, and there is little information on whether or how they will evaluate retroactive eligibility policies.xiii

In addition, eliminating retroactive coverage subverts the objectives of the Medicaid Act because it “by definition, reduce[s] coverage” for people not currently enrolled in Medicaid.xiv Without retroactive coverage, Medicaid beneficiaries forgo vital health care and/or incur significant medical expenses.

Data from other states confirms that retroactive coverage is critical for Medicaid beneficiaries. For example, when Indiana received permission to waive retroactive coverage in 2015, CMS required the State to continue to provide some retroactive coverage to parents and caretaker relatives, and almost 14% of that population used the coverage, with the amount paid averaging $1,561 per person.xv Low-income individuals cannot afford $1500 in unexpected medical expenses. They become straddled with medical debt—a characteristic that is antithetical to the Biden administration’s focus on shoring up and building up the middle class.

Waiving retroactive coverage also raises uncompensated care costs for hospitals and other safety-net health care providers. When Iowa proposed to eliminate retroactive coverage, the Iowa Hospital Association warned that the waiver would “place a significant financial burden on hospitals and safety-net providers and reduce their ability to serve Medicaid patients . . . translate into increased bad debt and charity care for Iowa’s hospitals and . . . affect the financial stability of Iowa’s hospitals, especially in rural communities”xvi Tennessee cannot afford to lose additional hospitals. Since 2010, 16 hospitals – 13 of them in rural areas – have closed their doors.xvii

Eliminating retroactive coverage also causes providers that manage to stay open to stop providing care to individuals who are eligible for Medicaid but have not enrolled. As a result, low- income individuals experience a substantial delay in receiving necessary services.xviii

In the approved STCs, CMS appears to suggest that the waiver of retroactive coverage could lead people to enroll in Medicaid earlier, when they are healthy, and to maintain their enrollment. However, low-income individuals do not actively delay seeking Medicaid coverage until they become sick or injured. Medicaid eligibility rules are complicated, and individuals often do not know that they qualify for Medicaid coverage, much less understand that Medicaid has a retroactive coverage policy and what that means. The theory is completely nonsensical in a non- expansion state like Tennessee, where most low-income adults cannot enroll in Medicaid until they become sick or injured and qualify for the program due to a disability.

VI) Closed Prescription Drug Formulary

The approved STCs allow Tennessee to implement a closed prescription drug formulary for adult beneficiaries. Despite not covering prescription drugs as required by the Medicaid Act, Tennessee will continue to receive generous rebates from manufacturers. CMS should withdraw its approval of the closed formulary for several reasons.

First, Congress ensured that Medicaid enrollees have broad access to outpatient prescription drugs. Section 1396r-8 outlines the requirements for state Medicaid programs, including those that govern the development and use of a formulary. Since section 1115 only allows waivers of Medicaid provisions in section 1396a, HHS cannot waive provisions in 1396r- 8.

Second, the closed formulary is not experimental and does not promote the objectives of the Medicaid Act. There is nothing novel about a closed formulary– they are ubiquitous in commercial plans. The consequences of limiting prescription drug access are well-known and predictable – enrollees have less access to potentially life-saving medications. Fewer prescriptions will be filled, leading to lower medication adherence. For people with chronic illness or other significant health needs, decreased access to and utilization of medications under a closed formulary is especially harmful. Lower medication adherence is generally associated with poorer health outcomes, and ultimately, higher total health care costs.xix

While the approval does require Tennessee to implement an exceptions process, that process cannot be sufficient to ensure that beneficiaries have access to medically necessary drugs. Many individuals will not be aware of the exceptions process.xx Others will be aware of the process, but they (and/or their providers) will find it too cumbersome or time-consuming to navigate successfully.

As a result, this does diminish patients’ access to the full panoply of perscription drugs and could have a negative impact on health outcomes. xxi In a national sample of 12,096 patients from six managed care organizations, it was was found that increased formulary restrictiveness was associated with higher drug costs and increased emergency department visits and hospitalizations.xxii The negative implications of a closed formulary for beneficiaries are reduced access and negative health implications.xxiii

The closed prescription formulary presents immense problems for DRT clients. The client mentioned in Section I. above has a history of not taking her medication and desperately needs to be in a program where she is assisted in taking her medications. When she lived at home with her mother, she would not take medications and, as a result, became violent with her mother. This is an always current problem. When she got her COVID-19 vaccination, she asked a staff member if she got the virus, could she stop taking her other medications for her mental health issues. This problem will be enhanced if there is a closed drug formulary with no apparent appeal route. An exception process would be impossible for this person to navigate unless she had constant medical and legal counsel and unlikely to be successful even then. If a physician tries to stay within the formulary and the drug does not work, the appeal process for this is unclear and almost impossible for anyone without a lawyer to navigate, and still difficult if there is a lawyer. And most clients DRT sees who take various psychoactive medications have gotten to that point through years of trial and error to find what medications works. If that medication that works is not in the formulary, many problems loom for our clients.

In a recent study by MACPAC comparing the effect of formulary coverage on drug utilization, MACPAC found that the utilization comparing the difference in relative utilization where there was no formulary coverage compared to coverage relative utilization for restricted coverage under Medicaid versus unrestricted coverage was 22 for restricted coverage and 32 for unrestricted coverage.xxiv The result of this restriction is that needed medications cannot be secured. If a drug that is restricted cannot be prescribed because it is not on the formulary, then medically necessary health care is not provided.

A further example of this is a person with a disability DRT is aware of whose behaviors could only be addressed with a benzodiazepine, all of which were excluded from the TennCare drug formulary at the time. It took a Federal Judge asking for assurances from the TennCare Medical Director, in open court, that the drug would be available to get that person the only medication that worked. Not every person with a mental illness who is a TennCare recipient has a helpful Federal Judge as a resource. A commercial style closed drug formulary, aside from being a violation of the Act, would only make that worse. It should not be approved, and the existing approval should be rescinded.

Finally, federal law already gives Tennessee a number of tools for saving money on prescription drugs. For example, Tennessee is free to: (1) establish a formulary as permitted in section 1396r-8, which allows states to exclude drugs that do not have a “significant, clinically meaningful therapeutic advantage”; and/or (2) negotiate supplemental rebates with pharmaceutical manufacturers, including entering into multi-state purchasing pools. Tennessee has failed to pursue these well-established strategies to reduce outpatient prescription drug costs. There is no evidence Tennessee has sought to implement a formulary allowed under section 1396r-8. According to CMS, Tennessee has failed to negotiate supplemental rebates and last entered into a supplemental rebate agreement almost two decades ago. It has not joined one of the more recent multi-state agreements, through which states leverage their joint purchasing power to lower their prescription drug costs. CMS should rescind its approval of the closed formulary and direct Tennessee to the other less harmful mechanisms available for controlling prescription drug utilization and costs.

VII) Aggregate Cap and Shared Savings

CMS should rescind its approval of the “aggregate cap” and shared savings financing structure because it conflicts with section 1396b, and it does not promote the objectives of Medicaid.

As an example, DRT had a client this year with serious mental health issues who cannot get treatment because of the lack of available services and low levels of state spending for mental health care. We were informed of our client being at the Putnam County jail in Cookeville. He was a repeat offender. They had tried multiple times to use crisis intervention services for him by taking him to Moccasin Bend Regional Mental Health Institute, where he was found to not meet criteria, i.e. not presently a danger to himself or others, and so he was then sent back to the jail. His charges are usually dismissed. They often involve some violence. His last arrest was the result of an attack on his father. His dad begged the jail administrator to get him help because he does not want to be forced to have to kill his own son in order to protect himself. We observed him yelling and talking to himself and pacing his cell. He is kept in a single cell isolated from other inmates for his safety. So, instead of being in a therapeutic environment where he could get help for his mental health, he is in the most restrictive environment of the county jail where they can do nothing for his mental health. The aggregate cap and shared savings provisions of the TennCare III Demonstration encourage savings that afflict persons like our client such that they receive no mental health services and are a danger to themselves and their families.

Another example of Tennessee’s already low level of spending on mental health services concerns one of DRT’s former clients. DRT was contacted by a concerned family member of a 43-year-old female with Schizophrenia. Our client’s mother reported that her daughter had been arrested for Driving Under the Influence (DUI), and the court ordered her to a substance abuse treatment facility. At the time of sentencing, her daughter was not on her medications. The mother reported that when her daughter arrived at the facility, she was informed that they did not treat persons with dual diagnoses, and she was sent home in a cab. Soon after, her daughter was arrested and charged with the murder of her boyfriend. Our client’s mother believes that had the treatment facility secured alternative treatment options, she would not be facing these charges. DRT found that she did go to the facility without any medications and was exhibiting signs of psychosis. The facility staff took her to a clinic for medication three days after arrival. However, our client continued to show signs of psychosis. The facility staff contacted mobile crisis, which referred them to take her to the local emergency room for evaluation. At the local emergency room, medical staff determined our client was not in need of inpatient mental health care because our client verbally reported that she was not homicidal, just sad. The facility staff also contacted the district attorney and our client’s probation officer for assistance. The facility staff was told by the probation officer to discharge our client and send her home with instructions to contact the probation office the next day. Our client reported that she did contact the probation officer the next day, who told her that by leaving the program she was in violation. Our client stated that she became scared and went on the run. Three days after leaving the treatment facility, our client did not have any more medication. Less than two months later she was arrested again. DRT has noticed a pattern of mobile crisis complaints indicating an inappropriate response to calls initiated by facilities caused by lack of available services.

Section 1396b establishes how the federal government must fund Medicaid programs in the states, and as previous administrations have pointed out, it is not waivable under section 1115. While the TennCare III approval did not grant a waiver of section 1396b, in effect, it permits CMS to deviate from the financing scheme set forth in that provision. For example, if Tennessee spends more than the aggregate cap, it will not receive federal reimbursement for its excess costs. That means that the State will receive an FMAP for its total expenditures on medical assistance that is lower than the FMAP Congress has required in section 1396b. Section 1115 does not give the Secretary the authority to make that change.

In addition, the aggregate cap and shared savings financing structure rewards Tennessee for reducing its Medicaid spending, placing beneficiaries’ access to health care services at serious risk. If Tennessee spends less than the aggregate cap in any given year, it can earn up to 55% of the federal savings achieved. While the STCs require Tennessee to spend the savings on Designated State Investment Programs, they do not prevent the State from using the savings to supplant current state funding for DSIPs. In other words, the savings will free up state funding for Tennessee to use for any purpose.

Notably, Tennessee has a long history of redirecting federal funding intended to benefit low-income individuals.xxv During the Great Recession, the State improperly diverted hundreds of millions of additional federal Medicaid funding provided by the American Recovery and Reinvestment Act of 2009 away from Medicaid and into its reserve fund.xxvi Similarly, instead of using federal TANF funding to assist low-income families with children, Tennessee has hoarded the money.xxvii It has continued to grow its TANF reserve while more than 22% of children – and a shocking 40% of Black children – continue to live in poverty in the State.xxviii There is nothing to prevent Tennessee from using the shared savings as a slush fund to pay for policy priorities that are unrelated to improving health care coverage for low-income and underserved individuals and communities. Given the state’s recent history, there is every reason to fear that it will do so.

In an effort to maximize its shared savings, Tennessee will reduce its Medicaid spending. Under the approval, Tennessee cannot reduce the populations or services covered without amending the project and triggering a change in the aggregate cap. So, to reduce its spending, the State will have to reduce the capitated rates paid to managed care plans, leaving it to the plans to figure out how to cut their costs (while also fulfilling their fiduciary duty to maximize their profits).

So, we can well predict that, based on their historical performance, managed care plans, in turn, will use two principal avenues to reduce their spending: (1) cutting provider reimbursement rates; and/or (2) further restricting access to covered services.xxix Both paths will harm Medicaid beneficiaries. When plans lower their reimbursement rates, fewer providers will contract with the plans, reducing beneficiaries’ access to covered services. Imposing more stringent utilization controls also restricts beneficiaries’ access to necessary care. Because aggressive utilization controls are costly to administer, and therefore only produce net savings if reserved for the most expensive services, the TennCare III approval will disproportionately harm beneficiaries who have the greatest medical need – children and adults with chronic, complex conditions.

An example of a DRT client’s difficulties navigating TennCare’s enrollment process and the managed care network, which will be exacerbated by the aggregate cap/shared savings process to be run by MCOs under TennCare III, can be seen in the story of the DRT client who is deaf mentioned in Section I. above. Before getting on TennCare, she was frequently hospitalized and spent months in a state regional mental health hospital waiting to get enrolled in TennCare and the resulting services. Supposedly, she had too much income, but all income she had was from government benefits. After months of failed enrollment attempts and being on the verge of eviction from her TDMHSAS boarding home placement, she was finally enrolled by virtue of a call from DRT asking for the assistance of the TennCare Assistant Commissioner for Long Term Care to get her enrolled. Had DRT not intervened, it is very likely that she would have ended up evicted from her placement, on the streets, and homeless. She was in a TennCare funded home, but no one could figure out the enrollment process and complete it. Add to this the issue of expected savings and cost controls of the aggregate cap/shared savings process, and someone such as this client will not get enrolled in time and will be ejected from programs.

VIII) Network Adequacy and Comptroller’s Performance Audit as Affected by the Aggregate Cap and Shared Savings Portions of the TennCare III Approval Making Services Acquisition Difficult

The aggregate cap and shared savings portions of CMS’s approval of “TennCare III” (Project Number 11- W-00369/4), which was approved on January 8, 2021, under the authority of section 1115(a) of the Act, create a perverse incentive for TennCare to have less approved providers to meet the identified needs of TennCare recipients, current and future, and to not approve services for the persons already on the roles. Otherwise, there will be no savings to share. To make money under an inadequate amount and quality of available services paid for by unworkably low reimbursement rates, providers must cut corners.

As an example, in December of 2018 the Tennessee Comptroller issued a performance audit of the Division of TennCare which focused, among other things, on the performance of two of Tennessee’s MCOs, specifically United Healthcare and Amerigroup. It notes, at page 47:

“Pursuant to Title 42, Code of Federal Regulations, Part 455, Section 1(a)(2), state Medicaid agencies must “have a method to verify whether services reimbursed by Medicaid were actually furnished to recipients.”

TennCare’s managed care contract also requires its MCOs to monitor and use information from the electronic visit verification system to verify:

  • that services are provided as specified in the plan of care or [person-centered support plan],
  • the plan is in accordance with the established schedule, including the amount, frequency, duration, and scope of each service, and
  • that services are provided by the authorized provider/worker

All of this is done to identify and immediately address service gaps, including late and missed visits.

The Director of Long-Term Services and Supports explained that Amerigroup and UnitedHealthcare have used the same electronic visit verification system vendor since 2015. During the audit period, the vendor’s system lacked sufficient business rules to identify and reject overlapping claims.

While the Comptroller Audit is as much about record keeping as anything else, it is not lost on anyone that there is great difficulty in showing that services that are supposed to be provided actually are. That difficulty leads to the issue of network adequacy and gaps in services, as well as the similar issue of how the proposed consultation model will affect an already strained network in its efforts to provide the amount, duration and scope of services that ISPs call for.

IX) Network Adequacy in the Real World

Network adequacy in all its permutations is an issue addressed by CMS, MACPAC and others. It is clearly an issue with this approval of TennCare III. TennCare must meet quality metrics to participate in shared savings, BUT it also has to spend less money. The two goals are difficult to reconcile.

When, as DRT has observed, a forty-year-old man, who is in a life-threatening situation, cannot get, or only gets by a cobbled together situation where exhausted nurses work double shifts, the nursing services he needs and which the State has agreed he needs, then there is a gap in services and a network adequacy issue.

Or when, as DRT has again observed, a school aged young woman with multiple diagnoses and complex health issues requires constant nursing care in order to be able to simply be at school, but both TennCare and the LEA refuse to provide the amount of care each day to allow her to attend school and have the care she needs at home, then there is a problem with network adequacy or a gap in service.

Or when, as DRT has also observed, a twenty-one year old young man is approved for Level 6 services in the ECF waiver, but cannot get services because no provider in his geographic region will accept him for almost a year and a half due to his challenging behaviors, there is a network adequacy, gap in services, or quality of services issue. And when the provider then does not comply with the care plan as written because of inadequately trained and inadequately supervised staff, there is a problem with network adequacy or a gap in services. There is also a problem with TennCare actually ensuring that the services called for are provided in a quantity and with a quality necessary to assure that adequate and appropriate services as required by the Act actually happen. And that is not to say people are not trying; however, it is to say the network does not work the way it should and service gaps in quality and quantity are real.

The practical reality is that refusal or inability to provide a service to a person with a disability, which that person needs to be in a less restrictive environment or to be safe in their own health, means that that person will end up in an institutional treatment setting or a hospital.

MACPAC has identified several ways to address network adequacy needs. Some that would be particularly helpful here include: having a criterion for a minimum number of QUALIFIED providers, reporting requirements for gaps in services, any willing provider provisions, rate requirements, and single case agreement provisions. Those are not addressed in the plans seen so far from TennCare to develop Quality Measures.

The incentive to MCOs who receive a capitated rate to cut costs is almost overwhelming and make it difficult to meet any quality measures. This makes the entire aggregate cap and shared savings portions of the approval unworkable if Tennesseans are to get medically necessary care. That is aside from those portions of the approval being incompatible with Section 1396b of the Act.

X) Length of Approval

If CMS does allow TennCare III to move forward in whole or in part, it should not permit the project to last for 10 years. Section 1115 allows the Secretary to waive Medicaid Act requirements only for an experimental, pilot, or demonstration project, and only “to the extent and for the period necessary” to enable the state to carry out its experiment.xxx Congress did not enact section 1115 to allow CMS to make long-term policy changes. As described in detail above, TennCare III is not a valid experiment. Even if it were, there is simply no reason that Tennessee would need 10 years to conduct its experiment.

We acknowledge that, in 2017, CMS issued an Informational Bulletin announcing its intent “[w]here possible, . . . [to] approve the extension of routine, successful, non-complex” section 1115(a) waivers for a period of up to 10 years. Because the policy is contrary to section 1115, it should be reversed. In any event, the policy does not permit approving TennCare III for 10 years. TennCare III contains several new features (e.g., the financing structure and the closed prescription drug formulary), as well as old features that Tennessee has not proven to be successful (e.g., retroactive coverage).

XI) Conclusion

We have included numerous citations to supporting research, including direct links to the research. We direct CMS to each of the materials we have cited and made available through active links, and we request that the full text of each of the studies and articles cited, along with the full text of our comment, be considered part of the formal administrative record for purposes of the Administrative Procedure Act. If CMS is not planning to consider these materials part of the record as we have requested here, we ask that you notify us and provide us an opportunity to submit copies of the studies and articles into the record.

Thank you for the opportunity to comment on the TennCare III project. If you have further questions, please contact Lisa Primm (lisap@disabilityrightstn.org) or Jack Derryberry (jackd@disabilityrightstn.org) at DRT.

Respectfully Submitted:

Lisa Primm, Executive Director, Disability Rights Tennessee

Jack Derryberry, Jr., Legal Director, Disability Rights Tennessee


Available at https://www.wbir.com/article/news/health/east-tn-childrens-hospital-sees-increase- in-behavioral-health-emergency-room-visits-this-year/51-a3059b80-31bb-4743-8259- 8c96af8b88b0.

ii State Health Facts, Poverty Rate by Race/Ethnicity, 2019, KAISER FAMILY FOUND., https://www.kff.org/other/state-indicator/poverty-rate-by- raceethnicity/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D (last visited August 16, 2021).

iii The TennCare Block Grant Makes Health Disparities Worse, TENN. JUSTICE CTR., https://www.tnjustice.org/blockgrant/ (last visited Aug. 19, 2021) (showing that at least 29.6% of Black Tennesseans are enrolled in TennCare, compared to 13.9% of white Tennesseans).

iv See, e.g., Kinika Young, Tenn. Justice Ctr., Rooted in Racism: An Analysis of Health Disparities in Tennessee (2020), https://www.tnjustice.org/wp-content/uploads/2020/07/Rooted- in-Racism-An-Analysis-of-Health-Disparities-in-Tennessee.pdf ; Bill Frist & Andre L. Churchwell, Discrimination and Disparities in Health: Examination of Racial Inequality in Nashville, TENNESSEAN (July 31, 2020), https://www.tennessean.com/story/opinion/2020/07/31/examination-racial-inequality-nashvilles-healthcare/5540680002/.

v Kinika Young, supra note iii, at 2.

vi Matt Broaddus, et al., Medicaid Expansion Has Saved at Least 19,000 Lives, New Research Finds; State Decisions Not to Expand Have Led to 15,000 Premature Deaths (2019); https://www.cbpp.org/research/health/medicaid-expansion-has-saved-at-least-19000-lives-new- research-finds.

vii Available at https://www.tandfonline.com/doi/full/10.1080/20961790.2019.1641954

viii Available at https://www.kff.org/racial-equity-and-health-policy/issue-brief/beyond-health- care-the-role-of-social-determinants-in-promoting-health-and-health-equity/

ix Available at https://dailyyonder.com/rural-tennessee-is-losing-more-hospitals-than-anywhere- in-the-country-but-covid-19-isnt-fully-to-blame/2021/07/27/

Available at https://dailyyonder.com/rural-tennessee-is-losing-more-hospitals-than-anywhere- in-the-country-but-covid-19-isnt-fully-to-blame/2021/07/27/ citing https://jamanetwork.com/journals/jama/fullarticle/2765698

xi Available at https://dailyyonder.com/rural-tennessee-is-losing-more-hospitals-than-anywhere- in-the-country-but-covid-19-isnt-fully-to-blame/2021/07/27/

xii See, e.g.Beno v. Shalala, 30 F.3d 1057, 1069 (9th Cir. 1994).

xiii See, https://www.macpac.gov/wp-content/uploads/2019/08/Medicaid-Retroactive-Eligibility-Changes-under-Section-1115-Waivers.pdf at page 2. MACPAC is the

xiv Stewart v. Azar, 313 F. Supp. 3d 237, 265 (D.D.C. 2019).

xv Letter from Vikki Wachino, Dir., Ctr. for Medicaid & CHIP Servs., to Tyler Ann McGuffee, Insurance & Healthcare Policy Dir., Office of Governor Michael R. Pence (July 29, 2016), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By- Topics/Waivers/1115/downloads/in/Healthy-Indiana-Plan-2/in-healthy-indiana-plan-support-20- lockouts-redetermination-07292016.pdf.

xvi Virgil Dickson, Hospitals Balk at Iowa’s Proposed $37 Million Medicaid Cuts, MODERN HEALTHCARE (Aug. 8, 2017),http://www.modernhealthcare.com/article/20170808/NEWS/170809906.

xvii Rural Hospital Viability, TENN. HOSPITAL ASS’N, https://tha.com/focus-areas/small-and- rural/rural-hospital-viability/ (last visited August 15, 2021).

xviii See, e.g., Jessica Schubel, Ctr. on Budget & Policy Priorities, Ending Medicaid’s Retroactive Coverage Harms Iowa’s Medicaid Beneficiaries and Providers, OFF THE CHARTS (Nov. 9, 2017), https://www.cbpp.org/blog/ending-medicaids-retroactive-coverage-harms-iowas- medicaid-beneficiaries-and-providers.

xix See, e.g., Kam Capoccia et al., Medication Adherence with Diabetes Medication: A Systemic Review of the Literature, 42 DIABETES EDUCATOR 34, 48 (2016), https://journals.sagepub.com/doi/pdf/10.1177/0145721715619038(reviewing studies on the relationship between medication adherence among people with diabetes and outcomes and finding a significant decrease in “health care utilization, medical costs, A1C, and diabetes complications as adherence increased”).

xx For example, when Arkansas implemented work requirements, repeated research revealed that a large percentage of beneficiaries had not even heard of the requirements and that the exemptions process was confusing and difficult to navigate. See Jessica Greene, Medicaid Recipients’ Early Experience With the Arkansas Medicaid Work Requirement, HEALTH AFFAIRS BLOG, Sept. 5, 2018, https://www.healthaffairs.org/do/10.1377/hblog20180904.979085/full/; MaryBeth Musumeci et al., Kaiser Family Found., Medicaid Work Requirements in Arkansas: Experience and Perspectives of Enrollees (December 2018), http://files.kff.org/attachment/Issue- Brief-Medicaid-Work-Requirements-in-Arkansas-Experience-and-Perspectives-of-Enrollees; Benjamin Sommers et al., Medicaid Work Requirements: Results from the First Year in Arkansas, 381 N. Eng. J. Med. 1073 (2019), https://www.nejm.org/doi/full/10.1056/nejmsr1901772.

xxi Forbes, March 3, 2021, Joshua Cohen, See at: https://www.forbes.com/sites/joshuacohen/2021/03/03/tennessees-medicaid-waiver-for-a-closed- drug-formulary-could-be-a-trendsetter/?sh=36ccaac15f5b

xxii See, Horn et al., See: https://www.researchgate.net/figure/Studies-of-Effectiveness-of-Closed-Formularies_tbl1_10974353/download

xxiii See: CMS Reneges on Historic Grand Bargain wit Manufacturers in Tennessee Waiver Approval at: https://www.medicaidandthelaw.com/2021/01/12/cms-reneges-on-historic-grand- bargain-with-manufacturers-in-tennessee-wavier-approval/.

xxiv See, https://www.macpac.gov/wp-content/uploads/2019/09/Findings-from-Phase-2-of- Analysis-on-Medicaid-Drug-Formularies-Effects-on-Utilization-and-Spending.pdf at p. 8.

xxv See Tenn. Justice Ctr., Tennessee’s Misuse of Federal Funds Makes it a Poor Candidate for a Medicaid Block Granthttps://www.tnjustice.org/tenncare-misuse-federal-funds/.

xxvi Id. (citing Declaration of David L. Manning, Crabtree v. Goetz, No. 3-08-939, (M.D. Tenn. May 15, 2009)).

xxvii Id.

xxviii Id.The State of America’s Children 2020, Table 2: Poor Children in America in 2018 – A Portrait (2021), CHILDREN’S DEFENSE FUND,https://www.childrensdefense.org/policy/resources/soac-2020-child-poverty-tables/.

xxix See Medicaid and CHIP Payment and Access Comm’n, Report to Congress on Medicaid and CHIP 24 (2016), https://www.macpac.gov/wp-content/uploads/2016/06/June-2016-Report-to- Congress-on-Medicaid-and-CHIP.pdf (listing the tools that states have to reduce Medicaid spending, which include setting provider rates, “defin[ing] coverage parameters for covered services, and adopt[ing] strategies to address the volume and intensity of services”).

xxx 42 U.S.C. § 1115(a); see also id. § 1115 (d)(2), (f)(6) (limiting the extension of “state-wide, comprehensive demonstration projects” to one initial extension of up to 3 years (5 years, for a waiver involving dual eligible individuals) and one subsequent extension not to exceed 3 years (5 years, for Medicare-Medicaid waivers)).