Tennessee employers — and our members — are facing a health care affordability crisis. In fact, we paid out a record $20.1 billion in claims last year, which illustrates the need for us to act. And we’re responding by making changes that will deliver cost savings.
Our changes include improving the way we review claims before they’re paid, to make sure they match the services actually provided, and to adjust payment policies for mid-level providers like nurse practitioners and physician assistants. We’ve shared information on these changes with our in-network providers.
Each of these shifts align with national best practices and will put money back in the pockets of the organizations and people who buy our health plans.
What we’re changing and why it’s necessary
Addressing inappropriate coding of health care claims
Imagine you went to the emergency room for extreme pain in your ankle, which turned out to be a sprain. After a quick examination, you’re given some Tylenol and an ankle brace, and sent home. A few weeks later, you receive a bill in the mail that seems unusually high. This scenario is all too common, and it often results from inappropriate coding — where services are billed at higher levels than what was actually provided.
Inappropriate coding is a major driver of inflated health care costs, which ultimately affects both employers and employees. Our improved process will allow us to catch more coding discrepancies before paying claims.
Through this enhanced process, we aim to reduce overpayments, ensure fair pricing and improve efficiency. And we’re following national best practices to do so.
By implementing new tools to better address inappropriate coding up front, we can ensure that claims are processed with greater accuracy from the start, saving you money.
Changing payment policies for mid-level providers
Mid-level providers include physician assistants, nurse practitioners, clinical nurse specialists, nutritionists, dietitians and certified nurse midwives. They all play key roles serving our members as they work alongside physicians, and we’re grateful for the care they provide.
Starting soon, we’ll pay them 85% of what physicians bill for many types of services. This aligns with best practices from the Centers for Medicaid and Medicare Services (CMS) and helps bring costs down while recognizing the value of their work.
Changing lab and prescription drug prices for BlueCare and TennCareSelect providers
Our exclusive arrangement with Quest Diagnostics ended on July 1, 2023, when the State’s Any Willing Provider legislation took effect. At that time, we didn’t have rates for lab services in our BlueCare and TennCareSelect contracts. Now, we’re changing our payment terms for providers and creating separate guidelines for hospital-based lab services.
Drug costs continue to rise, and there are a lot of high-cost drugs available that didn’t exist five to 10 years ago. For BlueCare and TennCareSelect, we haven’t updated our drug pricing in many years.
One way we’re lowering drug costs is by reducing the markup providers get paid, from 20% of the drug price to 6%. This is more consistent with how we pay for drugs for members with employer-based, Marketplace and Medicare Advantage coverage.
We’re also creating different price tiers for many drugs, that’s based on industry standards. Our goal is to prioritize treatments that are equally effective but have lower costs.
Our role is promoting health care affordability
As EVP and chief operating officer Scott Pierce shared with The Tennessean earlier this year, our role is promoting affordability.
“Employers expect us to be good stewards of their dollars, and large employers are often paying the actual claims for their employees,” Scott says. “They want to know the care they pay for meets evidence-based, clinical guidelines and that this care is being delivered cost-effectively. If we can’t manage claims costs on their behalf, they may have to reduce or eliminate offering benefits.”
As a not-for-profit health plan, we don’t have shareholders pushing us to earn higher profits. Every step we take to lower the cost of health care ultimately benefits the employers and members we serve.
We’re committed to continuously improving our processes to better serve our customers by delivering access to affordable, high-quality care.