Private Medicaid Managers Criticized for Slow Payments

One state’s private Medicaid managers are coming under scrutiny for failing to pay bills on time. Iowa’s warning: if private Medicaid managers don't improve their processes, some service providers could be forced to close. According to The Des Moines Register’s article, “Pay Medicaid bills quickly, legislators tell managers,” Medicaid covers about 560,000 poor or disabled Iowans. Hospitals, nursing homes, mental health agencies and other service providers have been complaining for some time that the management companies aren’t paying bills quickly and accurately, but three companies and state human services officials have defended their record. They claim the situation is easing. 9-12-2016

Senator Liz Mathis’ demand for a solution was at the end of a four-hour Senate hearing before the Human Resources Committee about the transition to private management of Medicaid.

Several care providers testified that they have had to borrow money to make their payrolls, and the CEO of one mental health program for children said her agency is owed nearly $1 million for services it has provided to Medicaid clients since April. An executive from another company that owns 30 care centers said his company is short $3 million in such payments. That company started laying off staff members because of the shortfall.

The move to private Medicaid management was approved in 2015 by Governor Terry Branstad. The Republican says it will save money and offer more flexible services. Others contend that it’s already leading to cuts in services. The managed-care companies and leaders of Branstad’s Department of Human Services testified that the shift is going smoothly and that most bills are being paid quickly. Many of the others are rejected due to a lack of important information.

A report from the Department of Human Services said that the three companies paid out nearly $900 million to service providers from April through June. The payments correlated with about 3.5 million bills, and another 1.7 million bills were kicked back or delayed. The companies claimed that many of the bills either contained incomplete information or were duplicates that agencies submitted while waiting to be paid for earlier bills.

The state’s Medicaid director said her staff is working to help service providers understand how to submit bills correctly to be paid promptly. Many of the complaints are from Democratic legislators, but some Republicans have also raised concerns—such as the fact that service providers are still having trouble gaining payments three months after the shift.

Cheryl Harding, Amerihealth Caritas’ top Iowa executive, told legislators that she sympathizes with such concerns. “But this implementation has been smoother than many,” she said. Harding estimated it could take 12 to 18 months to “stabilize” the new system. After several legislators questioned her timeline, she said that the situation is already improving and will continue to do so.

Reference: Des Moines Register (July 26, 2016) “Pay Medicaid bills quickly, legislators tell managers”

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