Belfast, Tenn. – Three years ago, Mason Lester, a rambunctious child, fell from his family’s balcony and broke his wrist. His mother, nine months pregnant, rushed him to a nearby hospital, where she made a disconcerting discovery: Their health insurance had disappeared.
Alarmed, Katie Lester called TenCare, the Tennessee Medicaid agency that had covered her in previous pregnancies and had insured Mason from the day he was born.
TenCare said they were no longer enrolled because the family failed to respond to a packet of required paperwork. But Lester never saw the packet, nor a closing letter. Years would pass before it became clear what had gone wrong: Due to a clerical error, Tencare mailed both to a horse pasture.
The loss of Medicaid was devastating for the Lesters, a poor family who owned a small lawn-mowing business in Belfast, a town of 600 about an hour south of Nashville. Lester and her husband appealed Tencare’s decision but were denied. They reapplied and were denied after the mailed papers again failed to reach their homes. The Lesters said they were uninsured for most of the next three years, during which the coronavirus, injuries and cesarean births left them more than $100,000 in debt, ruining their credit and derailing plans to buy their first home.
“It was like we ran into a bus when I found out we didn’t have insurance,” Lester said.
Lester’s story can be a warning of what could happen to many poor Americans. Due to the COVID-19 public health emergency, TenCare and Medicaid programs in other states have largely been barred from excluding anyone, and Medicaid enrollment has reached historic highs. But when a state of emergency is declared, states again require families to prove they are poor enough to qualify for coverage. Millions of people are expected to lose their insurance over the next year, including countless people like the Lesters who meet Medicaid requirements but get lost in its labyrinthine bureaucracy.
“People are falling through the cracks. And we need something out there to catch them before the abyss melts away.”
Waverly Crenshaw Jr., Chief Judge of the U.S. District Court for the Middle District of Tennessee
Problems with the vetting process have long shadowed TenCare, a company that prides itself on keeping enrollment short and costs low. State officials have been criticized for years for letting Tennesseans navigate the thicket of paperwork. TennCare’s previous investigation found most people dropped out because of incomplete or unreturned forms. Only 5% of those excluded were found to be ineligible.
Thirty-five TennCare members challenged its “flawed” renewal process in a class-action lawsuit in 2020, and the ongoing lawsuit recently added plaintiffs, including Lester. The lawsuit accuses Tencare of misleading its members with vague and contradictory instructions; claiming information it already has or not; Ignoring information provided by members; improperly denying termination appeals; And, sometimes, sending the necessary paperwork to addresses that it “knows or should know” are wrong.
Michelle Johnson, executive director of the nonprofit Tennessee Justice Center, which led the case, described TenCare’s renewal process as a “gotcha game.”
“The state’s focus is trying to find a place where a family has been dropped, rather than making sure the process is properly enrolling eligible families,” Johnson said.
The lawsuit asks a federal judge to order TennCare to re-enroll about 108,000 people who dropped out in the 12 months before the pandemic and to keep their coverage until the agency can prove they don’t qualify.
Waverly Crenshaw Jr., a federal judge in Tennessee, expressed concern at a March hearing about eligible people losing coverage and said the termination letter sent by TennCare contained “confusing” language about appealing the decision.
According to TennCare documents obtained by KHN, the language has appeared in TennCare letters since at least 2015, including a period when tens of thousands of Tennesseans were cut from its programs.
“People are falling through the cracks,” the judge said. “And we need something out there to catch them before they melt into the abyss.”
Soon those cracks will widen.
The federal public health emergency is set to expire in October, and Medicaid programs across the country are once again preparing to ask families for proof of income. TenCare estimates that the renewal process will trim enrollment to pre-pandemic levels by about 1.4 million members within a year, meaning about 300,000 people will leave or drop out.
Johnson said the end of the federal emergency gives “greater importance” to the class-action suit even though it focuses on the 108,000 people left behind between March 2019 and March 2020.
“We wouldn’t expect the state to fix the problems of only 108,000 people and still have the flawed process work for everyone else,” Johnson said.
TennCare officials declined to be interviewed for this story or to answer questions about appeals information in the lawsuit or its termination letters.
In an emailed response to questions, agency spokeswoman Amy Lawrence said TennCare is “continually improving the eligibility process” but that members are responsible for keeping their address up to date and responding to any renewal paperwork.
When the federal emergency ends, TennCare expects at least half of its members to automatically renew using readily available electronic data, then send paper packets to the rest — as many as 850,000 next year, Lawrence said.
Paperwork is clear
TennCare members have been here before. It was messy.
The TennCare renewal was put on hold in 2014 so officials could focus on implementing the Affordable Care Act. TennCare grew by more than 350,000 people before renewals resumed, and many more were enrolled.
A 2019 investigation by The Tennessean newspaper found that a sliver of these people were found to be ineligible for TennCare before being dropped. A government audit confirmed this finding: Of the more than 242,000 children cut from TenCare from 2016 to mid-2019, only 5% were determined to be ineligible for coverage.
An additional 66% — or about 159,000 children — lost their insurance because TennCare said their families didn’t respond to renewal paperwork or didn’t provide enough information on that paperwork, according to the audit.
One of those families was Lester, who lost their coverage in May 2019 Documents provided by the family and filed in their lawsuit show that their packet of TennCare paperwork was first mailed to a home where the Lesters lived and closed. The packet was returned to Tencare as “undeliverable,” then mistakenly re-mailed to a horse pasture next to a relative’s house, then returned to Tencare again.
In other words, the Lesters didn’t complete the paperwork because they didn’t see it.
And TennCare knew it.
Tencare also mailed Lester’s termination letter to the horse pasture, which the family didn’t realize Mason was uninsured for. Lester filed an appeal, but Tencare dismissed it as “untimely,” according to Tencare court filings. Lester filed a new application, but Tencare denied it, the filing states.
In June 2019, Lester gave birth to another son, Memphis, while still trying to convince TenCare that they should qualify for Medicaid.
“A few hours after giving birth, still doped up in my hospital bed, I got my email, trying to find proof of income to get everything they needed,” she said.
In 2020, while still uninsured, Lester contracted Covid and needed hospitalization for two days, he said. The following fall, Memphis stepped on a piece of glass and required surgery, followed by a week-long hospitalization with Covid and respiratory syncytial virus, or RSV, his mother said. A few weeks later, in October 2021, Mason tripped in the yard and broke another bone.
This time, hospital staff re-enrolled Mason in TenCare in a “presumptive eligibility” category, according to the family’s lawsuit. Tencare covered Mason for about four months before dropping it again.
A month later, in April, the Lesters contacted the Tennessee Justice Center, which finally discovered the clerical error that led their TennCare paperwork to the horse pasture.
The Lesters joined the center’s lawsuit the following month, and a few weeks later TenCare approved coverage for the entire family, saying in court filings that eligibility was confirmed through the discovery process. The coverage is retroactive to 2019, so it should wipe out much of Lester’s medical debt.
But TennCare defended the initial decision to exclude the family, arguing that they were “appropriately terminated” for failing to complete the renewal paperwork. Kimberly Hagan, the agency’s director of member services, said in a court filing that the Lesters’ problems were “entirely attributable to the failure of the U.S. Postal Service,” which was not delivering mail to the Lesters’ homes and gave TenCare the “incorrect” shipping address.”
“While this is an unfortunate set of circumstances, it was not of TenCare’s making and in no way reflects a systemic problem with TenCare’s eligibility reverification and redetermination processes,” Hagan said.
Hagan also said Lesters can retrieve lost documents by logging into TenCare Connect, TenCare’s web portal. The portal, part of Tencare’s $400 million modernization, opened in 2019 about two months before Lester’s problems began.
Tencare has sent ‘misleading’ letters over the years
The case also raised concerns that families cut off from TenCare may be misinformed about their right to appeal to an impartial official, also known as a “fair hearing”.
Some of the concerns stem from a paragraph included in the TennCare termination letter. It reads: “If you still think we’ve made a mistake about a fact, you can have a fair hearing. If you don’t think we got a fact wrong, you can’t have a fair hearing.”
KHN obtained copies of two TennCare templates for termination letters dated 2015 and 2017, both of which contain this language. This was also included in the letter sent to the Leicesters.
Crenshaw, the federal judge, said on March 4 that the language was “misleading” because people are entitled to a hearing if they believe TennCare “made a mistake in its application.” [their] information to the law.” Tencare is telling them otherwise, the judge said.
“They do not lose their right to be heard. They may be wrong, but … don’t they still have a right to be heard? Judge Dr.
“At the very least, it frustrates their due process rights,” he added.
An example of a mistake involving the “application of facts to the law” is TennCare correctly denying coverage to someone because their income is too high but failing to consider them for other types of coverage with higher income limits.
Johnson, head of the Tennessee Justice Center, said TenCare made “a lot of mistakes” like that. In 2019 the agency failed to consider applicants for seven eligibility categories, each of which allows for different income levels, he said.
TennCare denied that its letters were misleading but said in a new court filing that they had been “voluntarily modified” to omit that language.
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