TennCare legislation requires renewal with providers that didn’t win contracts

By: - April 27, 2022 7:01 am
Speaker of the House Cameron Sexton backed addition of Centene Corp. to TennCare through a no-bid contract. (Photo: John Partipilo)

Speaker of the House Cameron Sexton. (Photo: John Partipilo)

Insurance conglomerate Centene, which has spent more than $1 billion to settle Medicaid lawsuits across the nation, could still get a shot at a TennCare contract it failed to win.

The bill’s sponsor wants to make sure TennCare recipients enrolled in a Medicare-Medicaid program are able to stay with their insurance carriers, including Centene and two others that didn’t receive a new contract, Cigna and Humana.

House Bill 2625 by Rep. Charlie Baum, R-Murfreesboro, would require TennCare to study the impact of not contracting with Centene and two other insurance companies and report back to the General Assembly. In the meantime, TennCare would take no action to remove the enrollees from their plans for a Medicaid-Medicare coverage program, which includes Centene, Humana and Cigna.

The legislation is to head to the House floor for a vote after receiving approval Tuesday from the House finance committee. 

It is unclear, though, whether the measure will make it through the full General Assembly. The Senate version sponsored by Sen. Todd Gardenhire, R-Chattanooga, hasn’t been amended and isn’t expected to reach the floor for consideration with the Legislature set to adjourn later this week.

The amendment Baum presented Tuesday in the finance subcommittee didn’t address insurance giant Centene as a managed care organization. Baum said he would not make an effort on the House floor, either, to re-insert Centene into the bill. 

But he said the legislation, as amended, should cover TennCare recipients who have selected Humana, Cigna and Centene. 

Those three companies have been providing coverage for TennCare recipients on the Medicaid-Medicare program, according to Baum, but did not win bids to continue serving.

The three contracts went instead to Americare, BlueCross BlueShield and Universal. 

According to TennCare spokeswoman Amy Lawrence, the portion of the bill dealing with dual enrollees in Medicaid-Medicare is “completely separate” from the managed care organization part previously included. The newest amendment does requires a study but also forces TennCare to renew expiring contracts with all contract contracted dual-coverage providers until the General Assembly adopts a resolution permitting non-renewal, according to Lawrence.

Regardless of what they do, what they tried to do and what they are currently trying to do to cover their tracks, at the instruction of the Speaker, is clear. The message they are sending is: If you don’t like a result, donate.

– Rep. Jason Hodges, D-Clarksville

Baum, who asserted he has not received any campaign contributions from Centene, said his intention was to enable enrollees to maintain their coverage with Centene, Cigna and Humana. He acknowledged the legislation went through several changes, including the effort to give Centene a contract, since it applied for the contract as a managed care organization.

House Speaker Cameron Sexton got behind the legislation and signed on as a co-sponsor, saying he felt the division of TennCare needed more “transparency.” He also objected to the potential removal of enrollees from their “dual-coverage” plans.

State Rep. Jason Hodges, a Clarksville Democrat, challenged the legislation when it surfaced a month ago, calling it a form of “bid-rigging.” The initial amendment also would have cost the state an estimated $2.8 million next fiscal year and $30 million in a third year, in addition to $60 million in federal funds, according to a fiscal impact document.

Hodges, who is not seeking re-election, said Tuesday, “Regardless of what they do, what they tried to do and what they are currently trying to do to cover their tracks, at the instruction of the Speaker, is clear. The message they are sending is: If you don’t like a result, donate. The amendment doesn’t change anything for me.”

Sexton’s office did not respond to questions immediately Tuesday. 

A bill to give a no-bid contract to0 Centene has been withdrawn but bill sponsor Rep. Charlie Baum, R-Murfreesboro. wants to make sure TennCare recipients enrolled in a Medicare-Medicaid program are able to stay with their insurance carriers, including Centene

Centene Management has not contributed money to any lawmakers in the last two years but gave two donations of $4,200 each to Gov. Bill Lee in January 2021. 

The Division of TennCare has opposed the bill, saying it ran a “fair and open process” in its most recent procurement. It also contends no enrollees will lose coverage because they will have plenty of time to switch to a new provider. 

Centene has been pushing hard for the legislation and started pressing the matter this week. Recently, it asked Sen. Kerry Roberts, R-Springfield, to sign on as co-sponsor of the Senate bill, which remains stuck in the Calendar and Rules Committee.

Rhythm Health Tennessee, which is part of Centene Corp., previously filed a protest against the bidding process. It has agreements with several Tennessee health-care providers, including a preferred agreement with Vanderbilt Health Affiliated Network.

Hodges also raised questions about Centene because it was connected to a bid-rigging lawsuit filed against the state.

In May 2021, the Department of Correction opted to take new bids on a $123 million contract for inmate mental health services because of the lawsuit, which was dismissed with prejudice this January. 

Nationally, it has run into several problems as well.

In mid-2021, Centene announced it would spend $1.25 billion to settle disputes with 22 state Medicaid systems, though the company admitted no wrongdoing, according to an Ohio Capital Journal report.

That included $55 million in a settlement with Mississippi for failing to give contractually guaranteed discounts on Medicaid drugs. 

An $88.3 million settlement with the state of Ohio centered on accusations by the attorney general that Buckeye Health, a Centene subsidiary, set up a chain of businesses that double-charged the state for services.

The report also details comments by Centene chief Michael F. Neidorff in June 2021, in which he said the company’s goal is to increase its net income margin by 3.3%, to $120 billion. Neidorff died in April.



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Sam Stockard
Sam Stockard

Sam Stockard is a veteran Tennessee reporter and editor, having written for the Daily News Journal in Murfreesboro, where he served as lead editor when the paper won an award for being the state's best Sunday newspaper two years in a row. He has led the Capitol Hill bureau for The Daily Memphian. His awards include Best Single Editorial from the Tennessee Press Association.

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