A large Tennessee hospital system is suing the state's Medicaid program, TennCare, claiming it's purposefully siphoning money from hospitals that treat the neediest patients in order to favor insurance companies that often employ former TennCare employees.
In a Davidson County Chancery Court lawsuit filed last week, Erlanger Health System in Chattanooga claims the state is ignoring a state law that requires for-profit managed care organizations contracted by TennCare to pay out-of-network hospitals that provide emergency services to Medicaid enrollees the average in-network contract rate, instead of the lowest in-network rates.
The lawsuit says those rates created a windfall for managed care organizations on the backs of out-of-network hospitals like Erlanger that must provide emergency care to Tennessee's neediest citizens.
TennCare spokeswoman Sarah Tanksley said TennCare can't comment on ongoing litigation.
