For the first time since 2001, two TennCare managed care companies will assume full financial risk. The TennCare bureau announced today that it awarded two new managed care contracts for the Middle Tennessee region after a competitive bid process.
TennCare director Darin Gordon says that means the companies will be paid a set amount for each enrollee.
“The managed care organizations winning the bid will come in receiving a capitated payment for each individual enrollee that they cover, and if there are any losses as a result of the care costing more than what the payment was for, then that is totally the responsibility of the managed care organization.”
The two companies, AmeriGroup Corporation and UnitedHealth Plan, will each have about 170-thousand enrollees. The combined contracts are valued at 1-point-2-billion dollars.
BlueCross/BlueShield was formerly the insurer for this group. Gordon says the company came back with a capitated rate that was higher than the two selected.
TennCare’s managed care companies were relieved of any risk at the end of Governor Don Sundquist’s administration, after several went bankrupt. The Bredesen administration and TennCare advocates like the Tennessee Justice Center have long said that costs spiraled upward, because the MCOs assumed no financial risk.
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