TennCare, the large Medicaid managed care program, recently awarded two new contracts to health plans to manage the care for enrollees in west and east portions of the state. The contracts went to AmeriChoice, a unit of UnitedHealth Group, and to BlueCross BlueShield of Tennessee. The contract were awarded at an awkward time, however, as one of the existing TennCare health plans, AMERIGROUP, reported that runaway costs for home healthcare services will prompt it to report lower profits for 2008 than anticipated. Meanwhile, TennCare has a new contract to manage its pharmacy benefits that includes unusual risk and reward provisions. The report also delves into the entrance into Tennessee by Bluegrass Family Health, a Kentucky-based provider-owned health plan, which is selling HMO, PPO and consumer-driven plan designs. Finally, the report examines specialty drug cost management and includes comments from the manager of the specialty pharmacy program for BC/BS of Tennessee, who details what that company is doing to manage that segment of drug costs