HealthLeaders-InterStudy, a leading provider of managed care industry intelligence, reports that the TennCare RFP for Middle Tennessee reflects the priorities of the reformed TennCare, including a return to MCO risk, strict benefit limits for adults, integration of behavioral health care, and greater disease management. According to the latest issue of Tennessee Health Plan Analysis, the new bid process also marks the first time that TennCare contracting has been competitive and not simply open to all companies wishing to participate.

"The level of risk that TennCare MCOs will be taking on in the new program is definitely greatly expanded," said Jane DuBose, HealthLeaders-InterStudy Associate Director of Health Plan Analysis. "Currently, MCOs are paid on an administrative-services-only basis, with bonuses and penalties based on performance levels. Under the RFP, risk-sharing is much more aggressive, at three different risk levels. The state has tried to set up the bid structure to give an incentive for risk taking. The more risk a bidder assumes, the higher score it receives in the bidding process."

MCOs can assume one of three risk levels. Under Option 1, TennCare would cover 50 percent of risk-sharing losses and receive 75 percent of risk-sharing gains. Under Option 2, TennCare covers a quarter of risk-sharing losses and TennCare receives 50 percent of risk-sharing gains. The most aggressive is Option 3, whereby TennCare shares none of the losses or gains, and all risk is assumed by the MCO.

Other health plan news in Tennessee:

Tennessee hospitals are reporting a 67 percent increase in inpatient charity care since the state's disenrollment of approximately 170,000 TennCare enrollees, including an estimated 67,000 high-cost, chronically ill "uninsurables."

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  For more information, contact:   Alex Jablokow   Decision Resources   781-296-2562 

SOURCE: HealthLeaders-InterStudy

CONTACT: Alex Jablokow of Decision Resources, +1-781-296-2562,

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