TennCare Creates Conflict of Interest for Doctors and Patients, according to the Journal of American Physicians and Surgeons

TUCSON, Ariz., March 20, 2017 -- The Tennessee Medicaid program, known as TennCare, has developed an episode-of-payment system that creates “provider incentives” and penalties designed to “influence the practice patterns of physicians.” Cardiologist Thomas Little, M.D., explains how this is likely to affect physicians’ decision-making in the spring issue of the Journal of American Physicians and Surgeons.

In order to create cost savings, physicians will be paid for a 90-day episode of care (EOC) for a given treatment or procedure, instead of by the traditional fee for service, Dr. Little writes. Physicians’ whose patients’ EOC costs are in the lowest 10^th—below the “commendable threshold”—will get a “gain-sharing reward.” If costs exceed the 90^th percentile—defined as the “acceptable threshold,” physicians will have to pay 50 percent of the extra costs. Dr. Little states that costs include not only the treatment the physician ordered, but also unrelated medical costs, such as medications, imaging, rehabilitation services, and re-hospitalization for any cause.

“The treating physician may have no control over such additional medical costs ordered by other ‘providers,’ or resulting from patient noncompliance and substance abuse,” Dr. Little points out.

Since physicians are at personal financial risk for resources provided to patients, the State deliberately creates a conflict of interest, says Dr. Little. He continues: “Tennessee names the physician at risk the ‘gatekeeper.’ A more appropriate term would be the ‘rationer.’ The apparent goal of the State is to achieve rationing while avoiding responsibility for it.”

“Currently this payment system applies only to TennCare patients and Tennessee state employees. Medicare, however, has now provided Tennessee with a large grant to develop and implement this program, which could serve as a model for Medicare and commercial health insurance payment reform.”

While in the past physicians have often provided free or discounted care to the needy, such civic-minded physicians may now decide not to participate in TennCare, to avoid the serious financial risk the new system imposes on them, Dr. Little suggests.

The Journal of American Physicians and Surgeons is published by the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties since 1943.

Contact: Thomas Little, M.D., [email protected], or Jane M. Orient, M.D., (520) 323-3110, [email protected]