Category Archives: Medicaid/Medicare

Audit at Texas Health and Human Services Commission finds latest in long line of problems

Source: Robert T. Garrett, Dallas News, July 18, 2018

Texas’ sprawling bureaucracy for regulating health care and providing social services is vulnerable to a “perception of impropriety” because it routinely lets individual contracting personnel open bids on their own, without any witnesses, a new internal audit says. The Health and Human Services system also unwisely allows program managers and division leaders who control billions of dollars of spending to ask for the same contracting specialist every time, the audit said. That potentially creates a coziness that could harm taxpayers’ interests, it said. Problems highlighted in the audit, which was released to state GOP leaders last week, are the latest in a long line of problems at the Health and Human Services Commission. Six officials have stepped down since early April, when Gov. Greg Abbott called revelations of sloppiness and mistakes in scoring of bids “unacceptable.” …

Another audit released Tuesday by an independent arm of the Legislature looked at nearly 70 percent of the $6.7 billion worth of contracts that the commission awarded in a recent 27-month period. There were problems with every single one of the 28 separate calls for bids or grant proposals that the State Auditor’s Office examined. … Both the commission’s internal audit and the State Auditor’s Office review sharply criticized sloppy handling and scoring of bids for billions of dollars worth of work for the Medicaid program for the poor and other health and social services programs. …

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Pain & Profit series from the Dallas Morning News, published June 2018

  • The preventable tragedy of D’ashon Morris
    Doctors described him as “happy and playful” and told his foster mother he would be healthy by the time he went to kindergarten. That was before a giant health care company made a decision that saved it as much as $500 a day — and cost D’ashon everything.
  • As patients suffer, companies profit
    Imagine being trapped in a bed for more than a year because you can’t get the medical equipment you need. Years of poor oversight by the state have allowed health care companies to skimp on essential care for sick kids and disabled adults.
  • Texas pays companies billions for ‘sham networks’ of doctors
    The state tells foster parents that hundreds of psychiatrists will see their kids. We found only 34. Managed-care companies overstate the number of physicians available to treat the state’s sickest patients.
  • ‘Glossover of the horror’
    A whistleblower says taxpayers are not getting their money’s worth and sick people are not getting the care they need. Texas fails to act when health care companies put patients in peril.
  • Parents vs. the Austin machine
    “You can tell that he’s crying or screaming, but nothing comes out.” Texas families take fight for medically fragile children to the Legislature.

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Insurers Fall Short In Catching And Reporting Medicaid Fraud, Inspectors Find

Source: Chad Terhune, Kaiser Health News, July 12, 2018

Despite receiving billions of dollars in taxpayer money, Medicaid insurers are lax in ferreting out fraud and neglect to tell states about unscrupulous medical providers, according to a federal report released Thursday. The U.S. Health and Human Services’ inspector general’s office said a third of the health plans it examined had referred fewer than 10 cases each of suspected fraud or abuse to state Medicaid officials in 2015 for further investigation. Two insurers in the program, which serves low-income Americans, didn’t identify a single case all year, the report found. Some health plans terminated providers from their networks for fraud but didn’t inform the state. The inspectors said that could allow those doctors or providers to defraud other Medicaid insurers or other government programs in the same state. In addition, some insurance companies failed to recover millions of dollars in overpayments made to doctors, home health agencies or other providers. The inspector general said insurers stood to benefit financially from this because higher costs can justify increased Medicaid rates in the future. (The report didn’t name specific insurers or states.) …

…Health insurers serve about 55 million Medicaid patients across 38 states, and play an increasingly vital role in running the giant public insurance program. … One in 5 Americans is on Medicaid and enrollment is poised to rise even further as more states consider expansion under the Affordable Care Act. About 75 percent of Medicaid patients are part of a privatized system in which managed-care companies are paid fixed fees per patient to coordinate their care. Big, publicly traded companies such as UnitedHealth, Anthem and Centene dominate the business. In some states like California, evidence shows the funding often flows to the plans with little oversight, sometimes regardless of their performance. These companies tout their expertise at spotting suspicious billing patterns and chasing down criminals using sophisticated data mining, but the inspector general found that their fraud-fighting results don’t always match the rhetoric. …

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LePage to end deal early that outsourced Medicaid staff

Source: Matthew Stone, Bangor Daily News, July 11, 2018
 
Gov. Paul LePage’s administration is putting an early end to a contract it awarded to a Massachusetts firm to handle part of the state’s Medicaid application process and take over the jobs of 10 state employees.  The administration entered into the contract this winter without soliciting competitive bids, and even though having the contractor perform the work would be more expensive than keeping state employees on the job, the BDN reported in February. The Maine Department of Health and Human Services awarded the 25-month, $5.6 million contract to Commonwealth Medicine in Shrewsbury, Massachusetts, to have the firm’s specialists determine whether people are disabled for the purpose of qualifying for state-funded health coverage through Medicaid.  Now, the contract will end after a year, and DHHS late last month issued a request for proposals seeking competitive bids to provide the service. …

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LePage Administration Outsources Part of Medicaid Program
Source: Associated Press, March 3, 2018
 
Republican Gov. Paul LePage’s plan to outsource part of the state’s Medicaid application process will cost the state more. The Bangor Daily News reports that the LePage administration acknowledges in a publicly posted contract document that there will be a “slight increase in cost.” The Maine Department of Health and Human Services in June will eliminate the positions of 10 state employees and enter into a $5.6 million, 25-month contract with a division of the University of Massachusetts Medical School. The agency didn’t respond to request for comment. …

Health provider in scandals loses first 3 state contracts

Source: Doug Thompson, Arkansas Democrat-Gazette, July 7, 2018

The state began closing down the first three of its 16 contracts with Preferred Family Healthcare on Friday, after a year and a half of scandals that include convictions of four former lawmakers on corruption charges. Preferred Family is a nonprofit behavioral health and substance abuse treatment company. It has 47 locations in Arkansas. The Springfield, Mo., company has $28 million in contracts with the state to provide services ranging from therapy and counseling for foster children to court-ordered drug and alcohol addiction treatment and professional consulting to the state Department of Human Services. In addition, the company received more than $33 million a year through the state Medicaid program. Preferred Family operates in five states. … A U.S. Department of Justice investigation has obtained three guilty pleas and one jury conviction against former Arkansas lawmakers in a multimillion-dollar corruption scheme that started at least as early as 2010. … The state was assured by Preferred Family it had dismissed the company executives involved since the first guilty plea Jan. 4, 2017. Then former Preferred Family executive Robin Raveendran was charged last week, accused of filing $2.3 million in improper Medicaid claims for mental health services. Gov. Asa Hutchinson and the state’s Office of Medicaid Inspector General announced the state would cancel contracts with the company and suspend Medicaid payments to it. …

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Troubled Missouri nonprofit settles wage lawsuit amid federal probe of bribery, kickback scheme
Source: Wesley Brown, Talk Business & Politics, July 1, 2018

During the period when a Missouri healthcare nonprofit was doling out millions of dollars in bribes and kickbacks to Arkansas lawmakers, public officials and its own well-paid executive team, the troubled healthcare group was fleecing hundreds of lowly paid hourly workers out of overtime pay, according to allegations in a recent federal lawsuit. In early April, Springfield, Mo.-based Preferred Family Healthcare (PFH) agreed upon a tentative settlement with former employee Frances Smith over allegations that PFH and its handful of Arkansas-based affiliates failed to pay the former healthcare worker and other agency employees overtime compensation for working over 40 hours per week, according to pleadings with the U.S. District Court for the Eastern District of Arkansas. …

Editorial: Iowa’s Medicaid money mystery is growing old

Source: The Gazette, July 7, 2018
 
More than two years has passed since Iowa moved to privatized Medicaid. This board, as well as others statewide, have demanded transparency. Unequivocally, we’ve said Iowa taxpayers have a right to know if the switch is saving money, how much is being saved and how those savings are being realized.  Amid these calls, nearly every agency remotely connected to Medicaid has sounded alarm bells. Iowans who rely on the program’s coverage report denied services. Providers who care for these patients point to unresolved claims. Medical suppliers have presented unpaid bills.  The Iowa Office of the Ombudsman saw a 157 percent increase in cases connected to Medicaid managed-care organizations, leading the agency to issue one of the most scathing annual reports in its history.  Accurate numbers and a full, public accounting of the program isn’t unreasonable and shouldn’t be this difficult. Such transparency is, after all, what the governor promised. …

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Iowa’s new private Medicaid manager has paid millions of dollars in penalties in a dozen states
Source: Jason Clayworth, Des Moines Register, July 1, 2018
 
The corporation selected to help manage Iowa’s controversial privatized Medicaid system has faced serious charges of mismanagement resulting in at least $23.6 million in penalties in more than a dozen states, a Des Moines Register investigation shows.  Iowa Total Care, a subsidiary of Centene, was awarded a state Medicaid contract in May by the Iowa Department of Human Services despite scoring nearly 14 points lower on its evaluation than when it had applied and was rejected in 2015, public records show.  But with only two companies bidding for the work, Iowa Total Care won a spot managing Iowa’s annual $4.8 billion Medicaid program. The Centene subsidiary replaces AmeriHealth Caritas, which pulled out because it said it was losing too much money. …

The state has no data to support Medicaid savings claim, health care official says
Source: Michaela Ramm, Sioux City Journal, June 30, 2018
 
As Iowa Medicaid Enterprises Director Michael Randol continues to assure lawmakers and the public that the state’s managed-care model is saving money, the Iowa Hospital Association contends the director has no data to back up the claim.  And as the dispute continues, Iowa hospitals say the state is saving money because the Medicaid insurance companies are not adequately reimbursing health care providers for their services — including a Vinton hospital that says it is owed $90,000 in emergency room visits alone.  According to the latest estimates from the Iowa Department of Human Services, the state of Iowa is saving $140.9 million from having privatized the Medicaid program. …

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Colyer: Kansas Will Pursue Medicaid Work Rules Despite Court Ruling

Source: Jim McLean, Salina Post, July 3, 2018
 
Kansas Gov. Jeff Colyer says he will continue to push for a Medicaid work requirement despite a recent court order blocking a similar policy in Kentucky. Last week, U.S. District Judge James Boasberg, an Obama appointee in the District of Columbia, questioned whether the Trump administration had adequately considered the consequences of Kentucky’s work requirement before reversing longstanding federal policy to approve it.  Despite the setback, Colyer said his administration will continue discussions with federal officials about requiring some of the more than 420,000 Kansans enrolled in KanCare, the state’s privatized Medicaid program, to work or pursue job training. …

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Kansas chooses 3 companies to manage Medicaid
Source: Associated Press, June 22, 2018
 
The Kansas Department of Health and Environment has awarded new contracts to three insurance companies to manage the state’s privatized Medicaid program.  Two of the new contracts announced Friday are renewals for companies currently in the program, Sunflower State Health Plan Inc. and United Healthcare Midwest Inc. The Lawrence Journal-World reported that the third contract went to a company new to the program, Aetna Better Health of Kansas Inc….

KanCare Contractor Must Fix Backlog Problems Soon Or Face Fines
Source: Jim McLean, KCUR, May 30, 2018
 
The company that processes applications for Kansas’ privatized KanCare Medicaid program faces potentially steep fines if it doesn’t fix problems, responsible for massive backlogs, by the end of this week. Maximus, a Maryland-based company that specializes in managing “human service programs” for states and the federal government, has operated the “KanCare Clearinghouse” since 2016. There have been problems from the start. In March 2016, federal officials grew concerned about growing backlogs and ordered the state to provide monthly reports about what it was doing to fix the problem. …

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Huge federal contractor ‘failed’ to pay workers $100 million in wages, union says

Source: Danielle Paquette, Washington Post, April 23, 2018
 
One of the country’s largest federal contractors has been accused of underpaying about 10,000 workers who run help hotlines for public health insurance programs, including the Affordable Care Act marketplaces, by up to $100 million over the past five years, according to four complaints filed Monday to the Labor Department.  The complaint brought by the Communications Workers of America alleges that General Dynamics Information Technology misclassified employees at call centers in Kentucky, Florida, Arizona and Texas to suppress their wages.  The union, which does not represent the workers, said the contractor hired or promoted workers into roles that require special training but paid them below government-set rates for the jobs they performed. The complaint covers the period since 2013, when GDIT started a $4 billion, 10-year contract with the Centers for Medicare and Medicaid Services. …

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Contractor that handles public’s Medicare queries will do same for Affordable Care Act
Source: Susan Jaffe, Washington Post, June 20, 2013

Within days, the company that handles a daily average of more than 60,000 calls about Medicare will be deluged by new inquiries about health insurance under the Affordable Care Act. The six Medicare call centers run by Vangent, a company based in Arlington County, will answer questions about the health-care law from the 34 states that opted out of running their own online health insurance marketplaces or decided to operate them jointly with the federal government. ….. Running the 800-Medicare call centers may provide valuable experience, but Vangent’s track record reveals that it was slow to adapt when changes in the Medicare program caused dramatic spikes in demand. ….. Vangent, a subsidiary of General Dynamics Information Technology, will run both Medicare and the federal health exchange call centers under a contract worth $530 million in its first year.

Editorial: Self-dealing by nursing home owners threatens patient care

Source: Editorial Board, St. Louis Post-Dispatch, January 14, 2018

The outsourcing of logistical support services, which became commonplace in the U.S. military in the 1990s and later was adopted by state prison systems, has now come to dominate the nursing home industry. And while nursing homes, unlike the military or prisons, are not part of federal or state governments, Medicaid pays for the care of 62 percent of all nursing home patients, amounting to $55 billion in 2015. … In a remarkable story published Dec. 31, Kaiser Health News reported that the owners of nearly three-quarters of the 15,600 nursing homes in the United States buy a wide variety of goods and services from companies in which they have a financial interest or control. Nursing home owners can rent the land to themselves at above-market rates, or own the staffing company that provides nursing care and management. These business dealings, known as related-party transactions, offer efficiencies that can hold down costs and help minimize taxes. … In the nursing home industry, however, with its reliance on taxpayer dollars, related-party transactions can also encourage insider dealing, maximizing profits for the outside vendors while siphoning off funds needed for patient care and staffing. If a nursing home gives a no-bid contract for, say, linen services, to a firm controlled by the nursing home’s owners, it often pays inflated prices. … For nursing home owners, a complex web of related-party transactions can offer a shield against lawsuits or governments seeking restitution for Medicaid overpayments. This is outrageous. …

Exclusive: Nursing Home Sought Help From Lobbyist Friend Of Governor

Source: Jim Defede, CBS Miami, November 3, 2017

State officials intended to permanently shut down the now infamous The Rehabilitation Center at Hollywood Hills in 2014, when a lobbyist with deep ties to Governor Rick Scott interceded on behalf of the man who wanted to take it over, CBS4 News has learned. The role of one of the Governor’s friends lobbying state officials on behalf of Dr. Jack Michel so Michel could obtain the license for the Hollywood Hills nursing home has not been previously reported. The nursing home is now drawing intense scrutiny following the deaths of more than a dozen residents after its air conditioning system lost power during Hurricane Irma. … In 2014, Michel wanted to buy the nursing home, whose owner at the time, Karen Kallen-Zury, had just been convicted of Medicare fraud and was sentenced to 25 years in prison. … Political leaders have questioned whether Michel should have been granted a license given the fact that Michel and two former business partners paid $15.4 million to the federal government to settle fraud claims. …

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Hollywood nursing home should never have been licensed, state senator says
Source: Bob Norman, Local 10 News, October 26, 2017

The U.S. Justice Department hit Michel with civil Medicare fraud charges in 2004, alleging he received $70,000 each month in kickbacks to funnel nursing home patients into Larkin Community Hospital in South Miami for medically unnecessary procedures. … Michel eventually purchased the Larkin hospital (beginning with what the feds alleged appeared to be sham transactions) and, according to the complaint, began paying to other doctors for more bogus Medicare referrals. … Farmer says the fraud described in the Michel complaint has become all too common. … Michel and his business partners — including Chicago Rabbi Morris Esformes and his son, Philip — paid $15.4 million to settle the fraud case while admitting no wrongdoing. Published reports show that the Esformeses have a long history of nursing home violations going back decades in Chicago and other cities, including one case in 2001 involving the deaths of four women during a heat wave in St. Louis. Criminal investigations netted no charges in that case, but the nursing home was hit with a $275,000 civil judgment in one suit while three others ended with undisclosed settlements. But after paying the $15.4 million settlement to the federal government, both Michel and the Esformeses simply continued in the business of running nursing homes and hospitals. …

Hurricane Irma: Hospital linked to nursing-home deaths was paid $48M to care for Florida prisoners
Source: Arek L Sarkissian, Naples Daily News, September 26, 2017

The owner of a Florida nursing home whose 11 residents died after Hurricane Irma has benefited for years from millions of dollars in government contracts despite repeatedly running afoul of state and federal regulators. Dr. Jack Michel, owner of Rehabilitation Center at Hollywood Hills, owns a Miami hospital that has received $48 million in taxpayer money since 2006 to treat state prisoners. The payments to Larkin Community Hospital started the same year Michel settled a federal fraud lawsuit that accused him of bilking taxpayers. They continued after the state barred one of his assisted-living homes from taking new patients. And state officials are giving no indication that the payments will stop now despite Florida Gov. Rick Scott’s comments that the owner is unfit to care for patients after deaths at his nursing home.

Larkin provides the prison hospital care under no-bid agreements that the Florida Department of Corrections approved, according to agency contract and finance records. The hospital has served as a subcontractor to the state’s prison health care vendors with approval from corrections officials. Eight elderly patients died Sept. 13 after Irma knocked out power at Michel’s nursing home and residents remained for several days without air conditioning. Three other patients died days later after being hospitalized with complications. …

County services for disabled moving to private providers

Source: Rita Price, Columbus Dispatch, October 30, 2017
 
Federal rule changes about case management and Medicaid payments are forcing county disabilities boards throughout the state to privatize and outsource many of their remaining programs. The Centers for Medicare and Medicaid Services has mandated “conflict-free case management” by 2024 in Ohio, which means counties cannot be both the coordinator and the provider of services paid with Medicaid waiver funds.  But county boards still must pay for services and put up the local share of the Medicaid match — in Franklin County, more than $60 million a year for adult waiver services. Medicaid waivers provide money for community-based services so that people don’t have to be in an institution to get the care and programs they need. … Some 300 members of the county’s adult-services staff are to become ARC Industries employees in January 2019. … ARC is the disabilities program that provides job training, workshop employment, transportation and other services. Although ARC already was a nonprofit employer for people with disabilities, the workshops and programs have been staffed by county employees. Early childhood and school programs can continue to be operated by the board because they’re not funded through Medicaid waivers. … Initially, Morison said, the board’s costs might increase as a new infrastructure is established. He expects it to even out in coming years. …