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KNOXVILLE, Tenn. — Sale of the TennCare health maintenance license and creation of a new health care plan at the University of Tennessee’s Medical Center in Knoxville was recommended Thursday by a committee of the UT board of trustees.

The committee will take the proposal to the full board Friday.

A health maintenance organization, part of UT’s Health Plan, was created by the trustees in 1993 to serve the Medical Center’s Medicaid patients who were being transferred to TennCare.

“We expected to get a larger number (40,000) of TennCare patients than we did,” said Dr. Charles Mercer, vice chancellor for the Medical Center.

To be successful, an HMO needs a mix of patients, including those who seek preventative and other care. Many of the 7,000 who enrolled in UT’s HMO came to the plan with serious illnesses, he said.

“Therefore, we didn’t have a broad enough patient base to allow us to take care of these patients without losing quite a bit of money,” said Bill Rice, UT’s vice president for health affairs.

The TennCare part of UT’s managed care plan organization has no potential to break even financially, Mercer said.

UT proposes to sell the TennCare HMO license (and the care of its 7,000 enrollees) to Blue Cross-Blue Shield and to create a new health plan that will provide medical care to TennCare recipients on other plans in East Tennessee, Mercer said.

“In the new UT health plan, we’ll be working with other hospitals in East Tennessee communities which are developing their own health plans and with insurance companies to provide managed care services for their patients,” Rice said.