March 20, 2005

Sickening

If you're a Tennessee taxpayer, this report in today's Tennessean will make you sick:

TennCare plans to triple the pay of its drug management company, despite the company's failure to perform to state standards during its first 15 months on the job.

Under a proposed contract amendment, First Health Services Corp. of Glen Allen, Va., stands to make an extra $30 million over the next two years. Its maximum earnings for the contract, which began Jan. 1, 2004, would increase from $15.19 million to $45 million.

But records obtained by The Tennessean under the state's open-records law reveal that the state has held back numerous payments to First Health because the company failed to meet terms of its pharmacy benefits management contract.

First Health's chief responsibility is working with pharmacists to process drug claims. The company has several other oversight tasks, such as tracking and monitoring prescriptions, related to the $2.5 billion TennCare pharmacy program. Several new duties would be added under the amended contract.

Among First Health's lapses was the failure to produce accurate and timely reports that would have helped TennCare monitor drug usage, TennCare Director J.D. Hickey said. The company also failed to produce reports that would have identified doctors who were not following TennCare prescription guidelines.

As a result, First Health did not cut TennCare drug spending by 17%, as it suggested it would in winning the contract. Instead, TennCare's drug costs are now expected to rise by $395 million this fiscal year — an increase of 18%.

He had no plan and - more than two years later - still doesn't. But he hired TennCare's current director, the guy who is giving First Health this huge pay raise to reward its systemic failure to reduce TennCare's drug costs.

And Bredesen's TennCare management recently rejected out-of-hand proposals made by a former TennCare director that could reduce drug costs by tens of millions of dollars.

The Bredesen plan? Throw 320,000 sick and old people off TennCare, but do nothing to reform the program itself.

It's a good thing Bredesen is not taking the salary the state normally pays its governors. When it comes to fixing TennCare, he's getting paid what he's worth.
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For more scrutiny of the record of Tennessee Gov. Phil Bredesen, see Bredesen Watch.