Haslam Insists Politics Not Motivating Medicaid Non-Decision

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Gov. Bill Haslam sat down with reporters today to try to explain his decision not to expand Tennessee's Medicaid program under the Affordable Care Act. He insisted his talk of what he calls “real health care reform” is sincere and not mere subterfuge to delay action and avoid appearing like a political wimp running from his party's wingnuts.

“This isn’t the end of the story,” he said. Conceivably, he said, he could call the legislature into special session to expand Medicaid after lawmakers go home in May if he persuades the Obama administration to meet his conditions for changing the way Tennessee is allowed to administer the program.

"I feel like our job is to get to the right answer whether that’s a week from now or three months from now or a year from now," he said.

He added, “If we were driven by the politics of it, we would have just said no three months ago. I really do think this is a better path." But he conceded, “Getting pure expansion passed—we’re not kidding anybody—that would be a very uphill battle.”

Haslam said his plan would:

* Leverage available federal dollars to purchase private health insurance for Tennesseans up to 138 percent of the federal poverty level who don’t have access to health insurance, which would translate to 175,000 more insured Tennesseans;

* Allow co-pays for those who can afford to pay something;

* Include a definitive circuit-breaker or sunset that could only be renewed with the General Assembly’s approval;

* And reform the payment structure for providers so they are compensated for health outcomes, not just based on services performed.

“Of our request to Medicaid,” Haslam said, “we got one or two yes’s, one or two no’s, and a whole lot of I don’t knows.”

“Let me just say this. We really have worked this hard, and this isn’t the end of the story. We do think the Tennessee Plan, as I call it, is the right idea. It never felt right for me just to totally say, ‘Forget it. We’re not going to do this.’ If this was my business, then I think working this out is the right thing to do. But it also comes with a lot of conditions and the lack of ability to manage things in the way that you would if it’s your own business. That’s what drove us to our decision. We’re still having discussions.”

Here are excerpts of Haslam’s interview:

Q: Why not just expand it for three years and try to work all this out later?

Haslam: Well, I think this. We have a history of that, of expanding the Medicaid program and then cutting it back, and I don’t think that’s the right answer. I honestly think this is a one-time opportunity to drive for a different health care system.

Q: What do you mean when you say you want to compensate providers based on health outcomes?

Haslam: Right now, if I go to the hospital, every additional treatment I have is new revenue for the provider, right? No matter what it is. But if we have a system where let’s say I’m going to have my knee replaced, we say there’s a quarterback for that treatment and they are in charge of that. If the standard of that costs $10,000, if it can be delivered for $9,000, as the orthopedic in charge of my knee replacement, he’s going to keep $500 of that. So he’s got every incentive to provide a whole different kind of care. If we know that 19-year-old mother is going to deliver and I’m going to get paid based on the outcome, I’ve got a great incentive to make certain she does a lot of prenatal care. I might be willing to send somebody to her home to make sure she gets that kind of prenatal care. …

Back to the original question, why don’t we just expand? It’s because we really do have a system that’s broken. My hope is to use this to drive toward a system that’s in alignment.

Q: Why don’t you expand for three years to show good faith while you continue to negotiate with HHS?

Haslam: Because if we do that, then where do we have to provide leverage to change the system? The reality is that most of us don’t change our behavior that works against our financial interest without something that prompts us to do that.

Q: Some Republicans are saying that you are essentially kicking this down the road and it’ll pop up right in the middle of their 2014 campaigns.

Haslam: I don’t know when it’ll pop up. Since the last time I talked with you all on Monday, we quite frankly had a conversation with HHS that was disappointing to us. I feel like our job is to get to the right answer whether that’s a week from now or three months from now or a year from now.

Q: Are you saying there might be a special session to decide this?

Haslam: I’m not proposing that there could be. I’m just saying we’re going to work hard to come up with the right answer and, when we get it, we’re going to come back to the General Assembly, if it’s in a week, if it’s in six months or if it’s in a year. If we think it’s the right thing for Tennessee and this is going to both long-term cut our costs, help with the federal issue and bring alignment with the users and providers, we would do it at that point.

Q: The net effect is you’re giving up $1.4 billion here in this budget year. How do you explain that to the uninsured and hospitals that are counting on that money to survive?

Haslam: Well, I say this. I don’t think that just pure expanding a system that we all right now agree is too costly for us, it’s too costly for the federal government to afford long-term, is the right thing. I think this path makes more sense. This isn’t just ‘oh, I’m going to come up with a third way and that’ll get us out of the box for now.’ We’ve worked hard. Quite frankly, a couple of days ago, we thought we had this worked out.

Q: You yourself acknowledged that some hospitals are probably going to close as a result of your not doing this. Businesses are going to pay an extra $50 million to $70 million in taxes because of this. You’ve got the 170,000 people who would receive insurance, and you’re just saying our way or the highway.

Haslam: No, that’s not true at all. I mean, just to say our way or the highway would have been to say right away, ‘No, we’re not going to expand, period.’

Q: But you’re still saying no. You waited until the end, but you’re still saying no.

Haslam: We don’t think our proposal’s dead. That’s our point. We don’t think our proposal is dead. I’m not just throwing it out there to get out of a jam here. We think we have a realistic proposal that will work for them and for us.

Q: So if HHS says yes on Friday, would it be in your budget proposal?

Haslam: Sure. Theoretically, sure. The lack of clarity that comes from HHS is eye-opening, I guess is the word I would use. … I don’t think our ask is an unreasonable one, given what they’ve said.

Q: So what do you say to these 180,000 people who won’t get medical care while you guys try to reinvent the wheel?

Haslam: Over a third of those folks will end up being covered by the feds in the exchange anyway.

Q: What about the two-thirds?

Haslam: Well, I agree. But what does Tennessee say to the people who used to be on the rolls but aren’t now? We had to make a really hard decision six years ago or seven years ago [to cut the rolls to save money under the Bredesen administration] so we have a history.

Q: This is different, governor. This is federal money that would cover these people it’s here. It’s available. All you have to do is take it.

Haslam: The whole idea of taking it for three years and then cutting the rolls just never felt right to me. I just never have gotten there.

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