For more than a decade, Tennessee’s Medicaid program set a $50 cap on its payments to emergency room doctors treating low-income patients who show up at hospitals without experiencing a genuine medical emergency.
The Tennessee Supreme Court has now ruled that TennCare failed to follow the rules in setting the cap, a decision that potentially opens up taxpayers to years of back claims from the state’s hospitals and doctors over being underpaid for patient care since 2011.
The cap is now void. It was originally set as part of a broad cost-cutting measures as TennCare — the state’s publicly-funded health insurer for low-income and disabled residents —was facing a $100 million shortfall.
At the time, the agency promised to go through a standard rule-making process to put the cap in place, but that never occurred.
Instead, TennCare officials sent an email to managed care organizations who contract with physicians and hospitals announcing the new $50 rate for treating TennCare enrollees in ER’s for non-emergency health conditions.
Doctors had little choice but to agree, the ruling noted. Healthcare providers, including the west Tennessee emergency physicians group that first filed suit against the cap in 2018, must sign a provider participation agreement, or PPA, before TennCare will make any payments at all. The agreements require healthcare providers to “accept the Medicaid payment as payment in full.”
“Unless a healthcare provider signs a PPA, he or she cannot receive any reimbursement for treatment provided to TennCare enrollees. This reality leaves emergency-department physicians — who are legally obligated to provide certain care to all patients who walk through the door regardless of insurances status… — little choice but to sign a PPA,” the unanimous Tennessee Supreme Court decision said.
The agency, the court ruled, was obligated to follow a rule-making process requiring a public hearing and public comments before it could cap its payments.
“We are aware of the decision and currently considering next steps,” Amy Lawrence, a TennCare spokesperson said Tuesday, responding after publication of this story.