Category Archives: Medicaid/Medicare

Kelly calls for 300 more workers to fix ‘cluster-mess’ KanCare application center

Source: Kansas City Star, January 18, 2019

Kansas Gov. Laura Kelly’s first proposed budget calls for hiring 313 additional state workers at a beleaguered Medicaid application center to take over some functions that were privatized by then-Gov. Sam Brownback. The KanCare Clearinghouse in Topeka has been a target of criticism from legislators, nursing home advocates and other groups since Brownback established it in 2015 and contracted with a Virginia-based company called Maximus to run it. Under Maximus, a backlog of Medicaid applications ballooned into the thousands, leaving nursing homes to wait months or even years for compensation. Some had to stop taking in people whose applications were still pending, leaving them to search elsewhere for a bed. …

Related:

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. …

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….

Continue reading

How One Company Is Making Millions Off Trump’s War on the Poor

Source: Tracie McMillan, Mother Jones, January/February 2019

President Trump plans to make the poor work for Medicaid and food stamps. That’s extremely punitive for them—but highly lucrative for companies like Maximus. ….

…. Missing from the debate—perhaps because there’s hardly been any reporting on the subject—is the fact that work requirements are also a profit center for a rapidly growing private industry. Exhibit A is Maximus, the company that helps run HIP and the bureaucracy that stands between Sue and insurance. Business processing behemoths like Hewlett-Packard and IBM often run the minutiae of public-benefit paperwork and accounting. Local nonprofits sometimes contract for services like job training and case management. But Maximus does it all, holding contracts for everything from job training to child support enforcement to health care enrollment. In a 2014 business presentation, the company claimed to have a hand in the cases of roughly 59 percent of America’s Medicaid clients. ….

…. As workfare programs began to sprout up nationwide, Maximus capitalized on the doublespeak. The big payoff came when Clinton signed welfare reform into law with the Personal Responsibility and Work Opportunity Recon­ciliation Act in 1996. Welfare agencies told clients to start looking for employment if they wanted to keep cash assistance; if they couldn’t find a job, the state would try to give them work to do. Sue, then a young, single mother, first went on welfare that year.

The following year, Maximus went public, posted rev­enue of $128 million, and told investors that far greater profits were to be found in the social safety net. In its annual report, Maximus laid out its targets: 6.5 million people on Supplemental Security Income (which goes mostly to people with disabilities), requiring $2 billion in administrative spending a year, and 28 million people on food stamps at $3.7 billion in overhead. Between those, plus Medicaid, welfare, disability assistance, and child support, Maximus was eyeing a $21 billion market serving about 100 million people. …

Audit: Privatized Medicaid is saving Iowa millions of dollars. Democrats aren’t convinced

Source: Tony Leys and Barbara Rodriguez, Des Moines Register, November 26, 2018

After two years of releasing see-sawing estimates, Iowa Medicaid leaders are correctly calculating how much the state is saving by hiring private companies to manage the state’s $5 billion Medicaid program, the state auditor concluded Monday. State Auditor Mary Mosiman said the May 2018 estimate of $141 million in annual savings was more accurate than earlier state estimates of $234 million and $47 million. Using the most recent estimation method with updated financial information, Mosiman’s office estimates the fiscal year 2018 savings at $126 million. The auditor chided the Iowa Department of Human Services for failing to have an accurate way to estimate the savings when the state made the shift to private Medicaid management in 2016.

Related:
Iowa’s Medicaid privatization: Kim Reynolds says right track; Fred Hubbell says ‘disaster’
Source: William Petroski and Brianne Pfannenstiel, Des Moines Register, September 4, 2018

Two months ahead of Election Day, Iowa’s gubernatorial candidates painted a vastly different portrait of the state’s Medicaid system Tuesday. In the morning, Republican Gov. Kim Reynolds defended the state’s decision to shift administration of the program that serves 685,000 low-income or disabled Iowans to private management, telling reporters that initial problems have been addressed and the system is on the right track. In the afternoon, Democratic businessman Fred Hubbell held a roundtable with providers where he described a system in crisis and criticized Reynolds’ handling of the program. The results of privatizing the massive federal and state program in Iowa have become one of the issues that will influence — and may decide — this year’s governor’s race. …

A private Medicaid company that pulled out of Iowa has yet to pay thousands of medical bills
Source: Jason Clayworth, Des Moines Register, August 30, 2018
 
A Medicaid company that terminated its Iowa contract almost a year ago has yet to pay as much as $14.6 million for medical care provided to disabled, poor and elderly Iowans, a Des Moines Register investigation shows.  AmeriHealth Caritas’ outstanding bills include nearly 6,000 individual charges totaling more than $1 million at the University of Iowa Hospitals and Clinics and $541,000 at Broadlawns Medical Center, public records obtained by the Register show.  Several private and nonprofit medical groups told the Register they have tens of thousands of dollars in outstanding bills that they say are hamstringing their operations and efforts to provide medical care. …

Iowa agrees to give Medicaid management firms 7.5% raise to continue running program
Source: Tony Leys, Des Moines Register, August 24, 2018
 
Iowa has agreed to give 7.5 percent more state money to the two private companies managing its $5 billion Medicaid program, officials announced Friday.  The agreement will keep UnitedHealthcare and Amerigroup in Iowa, but it will mean state leaders must come up with about $103 million more than last fiscal year.  The new agreements cover the current fiscal year, which began July 1. The increase in state spending is more than double the 3.3 percent increase the state agreed to for last fiscal year.  Overall, the new contracts will give the two companies raises of 8.4 percent in state and federal money, totaling $344 million. …

Continue reading

State ending deals with pharmacy middlemen that cost taxpayers millions

Source: Catherine Candisky and Lucas Sullivan, The Columbus Dispatch, August 14, 2018

The Ohio Department of Medicaid is changing the way it pays for prescription drugs, booting all pharmacy middlemen because they are using a secretive pricing method that has cost taxpayers hundreds of millions. Medicaid officials directed the state’s five managed care plans Tuesday to terminate contracts with pharmacy benefit managers using a practice called “spread pricing” and move to a more transparent pass-through pricing model effective Jan. 1.

… The announcement comes after more than 40 stories by the Dispatch this year investigating the mysterious practices of little-known pharmacy benefit managers, or PBMs, that make nearly $400 billion a year as part of the country’s health care system. CareSource, Medicaid’s largest managed care plan, will soon seek bids on a new transparent contract to comply with the directive, said company vice president of pharmacy, James Gartner. The state’s leading PBM, CVS Caremark, “is working with our clients [the managed care plans] to update our contracts moving forward,” said company spokeswoman Christine Cramer. CVS uses pass-through pricing in several other state Medicaid programs. …

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. …

Related:
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.

Continue reading

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. …

Read full report.

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. …

Related:

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. …

Related:

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. …

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. …

Related:

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. …