(MCT) – Tabitha Lockwood did not find out that her daughter's health insurance through the state's Medicaid program had been discontinued until she was already at the doctor.
She was confused, so she took a day off work to go to the Hamilton County Department of Human Services to set an appointment to get the coverage set back up.
Instead, the state employee at the DHS counter handed Lockwood a small blue card and pointed her to one of three computer kiosks on the far side of the room.
The blue card explained that she – and anyone else applying for TennCare – must apply online through HealthCare.gov, the federal insurance website as of Jan. 1.
"She just told me that there are no appointments at DHS. It's just the computer now," said Lockwood, who was trying to chat online with a federal representative as the federal website hit snags. "It's frustrating."
The little blue card Lockwood was handed represents a large behind-the-scenes shift in TennCare that has been in the works since the health reform law was passed in 2010: Away from one-on-one appointments and paper applications and into an entirely new eligibility process, which includes applying online.
And it's the same in every state that didn't already have a streamlined online application process.
But until state contractors finish a new TennCare application website, Tennesseans can apply for Medicaid only through HealthCare.gov – the federal site that has only recently begun to recover from its disastrous rollout.
Every Tennessee DHS office is now outfitted with a computer kiosk where applicants will be directed to fill out their Healthcare.gov applications.
TennCare officials say this is just one more step toward a more convenient, cohesive TennCare application process.
"Before, you had to write up a paper application or travel to DHS and apply in person," said TennCare spokeswoman Kelly Gunderson. "This is a much more convenient process, where you are able to submit your information online."
The federal government has access to databases like household income that can make the screening process much less cumbersome, she said.
But critics say the bureau's sole reliance on the federal site right now means the state has fallen behind in its transition to the new system.
"There are still a huge number of unanswered questions," said Michele Johnson, the newly appointed executive director of the Tennessee Justice Center, a nonprofit public policy law firm.
"There is almost no information about how this system is supposed to work for applicants – they are just handed a Web address and expected to find their way from there."
If people can't get answers, it will be more frustrating, and it could result in fewer people completing the process and longer gaps without coverage, she said.
Walter Davis, executive director of the advocacy group Tennessee Health Care Campaign, said he worries that the current scenario will only add a layer of bureaucracy and confusion to what is already a complex system.
"It's easier for a bureaucracy to not engage or to dismiss someone at a distance than one who meets them face to face," said Davis, who added he was "concerned that the state was not prepared for this."
Tennessee was one of 27 states that chose not to create its own insurance marketplace and defaulted instead to the federally run marketplace.
Because of that, TennCare must closely interface with HealthCare.gov, accepting applications filed there, gathering tax information from the IRS and passing rejected TennCare applications over to the federal marketplace, among other coordinated efforts.
The Affordable Care Act called for a whole new system to determine Medicaid eligibility for all adults other than those with disabilities or who are over 65.
The new rules decide who is eligible according to modified adjusted gross income as defined by the IRS, figures that have not yet been released. Currently, eligibility is determined by a series of state-specific requirements.
The ACA required states to have a single online application process set up by Jan. 1, which would include quick, real-time feedback to the applicants so they will know whether they qualify for TennCare on the front end.
Adding to the shift, state officials have decided to move the TennCare application process – traditionally under DHS – back under the TennCare Bureau's purview.
The changes require a complete overhaul of technology and services, said Gunderson.
The state committed $35.7 million – $32 million of that in federally allocated money – to a three-year contract with global cybersecurity contractor Northrop Grumman to create a new system called the "Tennessee Eligibility Determination System," or "TEDS," which will result in a new TennCare application website.
But the project, which started in December 2012, is not completed – and there is no projection as to when it will be finished, Gunderson said.
"We need to make sure that our system is right and that there is enough time for it to be fully tested," said Gunderson, referencing the botched rollout of the federal health insurance website. "It's also important to note that federal guidance was required in order for states to move forward with the creation of these new systems."
Some of those federal requirements are still being specified, she said.
But even though TEDS is not ready, TennCare can no longer accept paper applications. That is why state officials are funneling all applicants to HealthCare.gov.
"To me, that shows a deficit in state management," said state Rep. JoAnn Favors, D-Chattanooga, who serves on the House health committee. "If it's not ready, why would you shift such a tremendous need over to the federal government – especially when [state officials] have been so critical of that site?"
Gunderson said the process through the federal site should not be any more burdensome to consumers, though the TennCare employees are still seeing kinks in HealthCare.gov's transfer of information.
Instead of receiving applications instantaneously or in daily batches, the agency is only receiving applications weekly, and in a format that must be manually reworked before TennCare can process the applications.
Once HealthCare.gov is able to work out the communication issue, Gunderson said, the applications will be received instantaneously.
The average turnaround time for applications has not yet been determined, Gunderson said, but the process should not take longer than it typically does, she said.
Medicaid agencies have 45 days to determine eligibility. If an eligible person goes to the doctor before being formally approved, Medicaid will provide back pay, she said.
But Johnson says a potential bottleneck in TennCare enrollments right now does not bode well for the state.
"The number of people applying for Medicaid right now is gigantic compared to how many usually apply," said Johnson. "At Nashville's DHS there are only three kiosks. And most of these people will still need in-person assistance. These are often those with chronic illnesses, those with disabilities and mothers with small children and busy lives."
If TennCare applicants have questions or problems, they can get in touch with a newly established call center called the Tennessee Health Connection.
In other fliers, the agency directs those having trouble to seek out "navigators," who were set up by the federal government to help with enrollment issues.
But because Tennessee has not expanded TennCare or operated its own insurance exchange, the state has received less funding than other states for such navigator programs.
Johnson and advocates say the delay with the TEDS website makes them even more concerned about whether the state is ready to implement completely new eligibility rules in two months.
In March, nearly all 1.2 million people on TennCare will be re-evaluated according to the new eligibility system in a massive process called "redetermination."
With the TEDS site still under construction with no scheduled completion date, Johnson said she is worried that more people – potentially hundreds of thousands – are at risk of falling into a coverage gap.
"If they don't have more ability to accommodate those who are currently eligible, people could be erroneously cut from the program," said Johnson. "Simply pointing them to a computer is not accommodation."
Johnson says she understands that building the computer system is a deeply complex process.
But she and other health advocates say they are concerned that the state's decision not to go along with certain changes promoted by the health law – including state exchanges and expansion – puts its uninsured residents at a significant disadvantage compared to those in other states, like Kentucky, where the state agreed to both.
"In Tennessee, there's a clear sense from government officials that if they did things that were cooperative with the new law, they would pay the political price," she said. "At the end of the day, Tennesseans don't care whether the governor hates Obama or loves him – they just care if their child is going to be able to get the medicine they need."