TennCare officials say they will be forced to cut some enrollee benefits if Gov. Phil Bredesen asks them to make a 9 percent reduction in spending.
Bredesen heard from state departments during budget hearings that continued on Wednesday.
While most agencies have been asked to present plans to cut 6 percent from their spending plans for the budget year that begins July 1, the Bredesen administration has asked for them to prepare an additional 3 percent cut in case economic conditions persist.
Officials for TennCare, the state's expanded Medicaid program, said the extra cuts would require changes to benefits, such as a $10,000 annual cap on inpatient care for adults, as well as a limit of 15 lab and X-ray procedures annually. Children and pregnant women would not be affected.
"This is the toughest budget by far we've had to work on," TennCare director Darin Gordon told reporters after the hearing.
He said the inpatient cuts alone would affect about 5,620 enrollees and save roughly $51 million. TennCare has about 1.2 million enrollees.
However, Tony Garr, director of the Tennessee Health Care Campaign, said the state isn't necessarily making cuts, but rather shifting the costs somewhere else.
"We're shifting these costs to hospitals, we're shifting these costs to providers ... as opposed to looking at TennCare reserves as a way to get through this," Garr said. "We still are looking at $400 million in TennCare reserves."
Rep. John Deberry, a Memphis Democrat and chairman of the House Children and Family Affairs Committee, said he's pleased that children and pregnant women who have special needs won't be impacted, but it's still unfortunate that any services have to be cut.
"However, I believe the governor is working very hard to try to do the best he can," said Deberry, who attended the TennCare hearing.
Lawmakers this year passed a $29.6 billion budget for the budget year that began July 1, including $2.2 billion in federal stimulus money. The state share of the spending plan _ $12.1 billion _ represented a more than 10 percent reduction from the previous budget year.
Bredesen has said the new round of cuts will be tough because agencies are already operating under last year's reductions. He said layoffs of state employees is likely.