Category Archives: Medicaid/Medicare

Audit: Louisiana has long wait list for Medicaid community-based services

Source: Marsha Shuler, The Advocate, May 5, 2015

Louisiana’s elderly and developmentally disabled wait longer than people in other states to get community-based services through Medicaid, the legislative auditor reported Monday. As of October, the auditor said 54,677 people remained on lists for the various Medicaid programs with wait times ranging from 21/2 to 10 years. The national average for home and community-based programs serving the elderly and individuals with physical disabilities is 10 months to 13 months, the audit report said. … The Legislative Auditor’s report is designed to provide information on the current use, cost and quality of care in Medicaid Home and Community-Based Services in order to have a baseline for evaluation after privatization. …
Louisiana legislators want to see more information about Bayou Health
Source: Marsha Shuler and Mark Ballard, The Advocate, May 4, 2015

After three years in operation, Gov. Bobby Jindal’s signature effort to privatize Medicaid might be saving taxpayers millions of dollars and providing about 20 percent of the state’s population with better health care. Or it might not. …… Judging the success of the privatization initiative has proven complicated.

Nursing home industry’s resistance to privatization stalls bidding process to Gov. Bobby Jindal’s Medicaid long-term care plan
Source: Marsha Shuler, The Advocate, April 22, 2015

Louisiana’s nursing home industry is trying to exempt itself from the final phase of Gov. Bobby Jindal’s Medicaid privatization. The industry’s objection is stalling release of initial steps in the bidding process — called request for proposals or RFP — that would seek a private company to take over management of long-term care programs for the elderly and developmentally disabled. Under “managed care,” the idea is to provide needed services to people at the right time and in the most appropriate and generally less expensive setting. About 72,000 people considered elderly, developmentally disabled or disabled by an adult-onset condition are getting their care covered by Medicaid in either institutional or home-based settings. The price tag is $2.1 billion. The Jindal administration already has contracted with private managers to handle the medical and behavioral health components of the state’s $8 billion Medicaid program. The long-term care portion is the third and final installment….

Auditor questions data used in health department review of Medicaid privatization program
Source: Melinda Deslatte, Associated Press, August 18, 2014

An annual report evaluating Gov. Bobby Jindal’s privatization of Medicaid lacked important financial information and presented rosy performance reviews not corroborated by data, according to a review released Monday. Legislative Auditor Daryl Purpera’s office raised questions about the report that Jindal’s Department of Health and Hospitals submitted to lawmakers in January. … The auditor’s non-partisan review said the report included “mathematical errors and inconsistencies” and used primarily self-reported data from the managed-care organizations that the department didn’t appear to verify.

Department of Health and Hospitals – Consideration of the Bayou Health Transparency Report
Source: Louisiana Legislative Auditor, Informational Audit, Audit Control #:80140104, August 13, 2014

Bayou Health faces changes, and queries from legislators
Source: Marsha Schuler, Advocate, July 8, 2014

The state’s Medicaid privatization initiative is approaching its third birthday and the Jindal administration claims it’s resulting in taxpayer savings. But the administration has been unable to provide the numbers that would compare the costs of traditional government-provided Medicaid versus the costs under the private healthcare model. It’s an elusive number because of the complexity of the program, state Department of Health and Hospitals Chief of Staff Calder Lynch said. But legislators have been asking for specific numbers as the first contracts are set to expire and as the administration contemplates changes in how health care services are provided to about 900,000 Louisiana residents — most of them pregnant women and children — for the next few years. … Legislators have received “no proof of savings” promised when the administration launched its privatization effort, agreed state Rep. Katrina Jackson, D-Monroe, who serves on appropriations and health care committees. …

La’s Medicaid privatization rollout rocky
Source: Associated Press, Posted Jan 16, 2012

Medicaid privatization firm selection challenged again
Source: Bill Barrow, The Times-Picayune, August 23, 2011

Louisiana Medicaid makeover attracts 12 corporate applicants
Source: Jan Moller, Times-Picayune, June 30, 2011

Twelve companies have applied to participate in the state’s new “coordinated care networks” initiative, which will steer nearly 900,000 Medicaid recipients into private managed-care plans starting early next year.

U.S. to set tougher standards for companies running Medicaid

Source: Jay Hancock, Washington Post, April 27, 2015

…Across the country, state Medicaid programs, which operate with large federal contributions, have outsourced most of their care management to insurance companies like the ones in Tennessee. The companies cover poor and disabled Medicaid members in return for fixed payments from taxpayers. That helps government budgets but sets up a potential conflict of interest: The less care these companies deliver, the more money they make. Nationwide, such firms had operating profits of $2.4 billion last year, according to regulatory data compiled by Mark Farrah Associates and analyzed by Kaiser Health News. In an attempt to manage that tension, Washington regulators are about to initiate the biggest overhaul of Medicaid managed-care rules in a decade. Prompted by the growth of Medicaid outsourcing and concerns about access to care, the regulations are expected to limit profits and set stricter requirements for quality of care and the size of doctor networks…. Tennessee Medicaid contractors — operated by BlueCross BlueShield of Tennessee, UnitedHealthcare and Anthem — are among the most profitable Medicaid plans in the country, according to data from Milliman, a consulting firm….

More whistleblowers allege health plan overcharges /Cases target Medicare Advantage billing practices

Source: Fred Schulte, Center for Public Integrity, April 23, 2015

Privately run Medicare plans, fresh off a major lobbying victory that reversed proposed budget cuts, face new scrutiny from government investigators and “whistleblowers” who allege plans have overcharged the government for years. Federal court records show at least a half dozen whistleblower lawsuits alleging billing abuses in these Medicare Advantage plans have been filed under the False Claims Act since 2010, including two that just recently surfaced. The suits have named insurers from Columbia, S.C., to Salt Lake City, Utah to Seattle and plans which have together enrolled millions of seniors; lawyers predict more whistleblower cases will surface. The Justice Department also is investigating Medicare risk scores…. On another front, the Justice Department is widening the scope of an investigation into whether exaggerated risk scores are jacking up costs improperly. Humana Inc., based in Louisville, Kentucky, which counts more than 3 million seniors in its plans, wrote in a March Securities and Exchange Commission filing that the investigation “includes a number of Medicare Advantage plans, providers and vendors.” On April 14, DaVita Healthcare Partners Inc., headquartered in Denver disclosed that it had been hit with a Justice Department subpoena. Investigators sought Medicare Advantage billing data and other records from January 2008 through the end of 2013….

Humana facing new federal scrutiny over private Medicare plans
Source: Fred Schulte, Center for Public Integrity, Updated February 20, 2015

Giant health insurer Humana, Inc. faces new scrutiny from the Justice Department over allegations it has overcharged the government by claiming some elderly patients enrolled in its popular Medicare plans are sicker than they actually are…. But overcharges related to inflated risk scores, intentional or not, have cost taxpayers billions of dollars in recent years, as the Center for Public Integrity reported in a series published last year…. New scrutiny of home visits also could prove troublesome for the industry. At least one whistleblower, a former manager at a California firm that does medical home visits, has alleged that the process was abused to inflate risk scores. Humana has been a major promoter of these home assessments. ….

Medicare Advantage Money Grab
Source: Fred Schulte, Chris Zubak-Skees, Sarah Whitmire, Eleanor Bell, David Donald and Erin Durkin, Center for Public Integrity, 2014

Congress created private Medicare Advantage health plans 11 years ago to help control health care spending on the elderly. But a Center for Public Integrity investigation found that billions of tax dollars are wasted every year through manipulation of a Medicare payment tool called a “risk score.” The formula is supposed to pay health plans more for sicker patients and less for healthy people, but often it pays too much. The government has for years missed opportunities to corral tens of billions of dollars in overcharges and other billing errors tied to abuse of risk scores. Meanwhile, the growing power of the Medicare Advantage industry has muzzled many critics in Congress, and turned others into cheerleaders for the program.

Articles include:
Why Medicare Advantage costs taxpayers billions more than it should
150 billion reasons Medicare Advantage matters
Whistleblower suit says health plan cheated government out of more than $1 billion
How risk scores changed
Explaining Medicare Advantage, and why it matters to you
Methodology for ‘Medicare Advantage Money Grab’
Medicare Advantage made simple: a glossary

Lawmaker wants company to scrub Medicaid rolls

Source: Kurt Erickson,, February 9, 2015

A new audit showing Illinois spent money on health care services for dead people last year has triggered a call for more oversight of the state’s Medicaid program. State Sen. Dale Righter said Illinois should hire an outside firm to ensure Medicaid recipients are eligible to receive benefits. The company would check their income and make sure the person is alive. …… In 2013, the private contractor, Maximus, identified more than 220,000 people it said should be dropped from Medicaid. But American Federation of State, County and Municipal Employees Council 31 filed a grievance over the contract, arguing it was in violation of its own contract with the state. An agreement between the two called for much of the work being done by Maximus to be transferred to unionized state workers. … The Illinois Department of Healthcare and Family Services, which administers the Medicaid program, expects to recoup 99.9 percent of the money paid out to dead people. The legislation is Senate Bill 815. ….

Nearly Half Of All Medicare Hospice Enrollees Received Care From Agencies Owned By Regional Or National Chains

Source: David G. Stevenson, Jesse B. Dalton, David C. Grabowski and Haiden A. Huskamp, Health Affairs, Vol. 34 no. 1, January 2015
(subscription required)

From the abstract:
Analyses of ownership in the US hospice sector have focused on the growth of for-profit hospice care and on aggregate differences in patient populations and service use patterns between for-profit and not-for-profit agencies. Such comparisons, although useful, do not offer insights about the types of organizations within the hospice sector, including the emergence of multiagency chains. Using Medicare cost report data for the period 2000–11, we tracked the evolution of the US hospice industry. We not only describe the market’s composition by profit status but also provide new information about the roles of regional and national chains. Almost half of all Medicare hospice enrollees in 2011 received hospice services from a multiagency chain. A handful of companies play a prominent role, although the presence of smaller for-profit and not-for-profit hospice chains also has grown in recent years. By focusing on the role of the diverse organizations that provide hospice care, our analyses can help inform efforts to monitor and assure quality of care, to assess payment adequacy and options for reform, and to facilitate greater transparency and accountability within the hospice marketplace.

Does Privatized Health Insurance Benefit Patients or Producers? Evidence from Medicare Advantage

Source: Marika Cabral, Michael Geruso, Neale Mahoney, National Bureau of Economic Research (NBER), NBER Working Paper No. w20470, September 2014 (subscription required)

From the abstract:
The debate over privatizing Medicare stems from a fundamental disagreement about whether privatization would primarily generate consumer surplus for individuals or producer surplus for insurance companies and health care providers. This paper investigates this question by studying an existing form of privatized Medicare called Medicare Advantage (MA). Using difference-in-differences variation brought about by payment floors established by the 2000 Benefits Improvement and Protection Act, we find that for each dollar in increased capitation payments, MA insurers reduced premiums to individuals by 45 cents and increased the actuarial value of benefits by 8 cents. Using administrative data on the near-universe of Medicare beneficiaries, we show that advantageous selection into MA cannot explain this incomplete pass-through. Instead, our evidence suggests that insurer market power is an important determinant of the division of surplus, with premium pass-through rates of 13% in the least competitive markets and 74% in the markets with the most competition.

Florida doctors warn of early problems in Medicaid privatization rollout

Source: Kelli Kennedy, Associated Press, September 4, 2014

Florida health officials are declaring victory after transitioning the state’s 3 million Medicaid recipients into private insurance plans, but some doctors and health advocates are warning their offices are filled with confused patients who say they have been cut off from their regular physician. The state sent out a press release this week saying that the Medicaid changes have gone well, but The Associated Press interviewed doctors, parents and health advocates around Florida who said privatization has exacerbated problems first noticed in a five-county pilot program eight years ago. Because the switch to privatization just concluded Aug. 1, the state has no data showing what services are being provided and denied. … Under privatization, each Medicaid patient gets coverage from one of 14 insurance companies — about a third of patients chose the plan they now have, while the rest let the state assign them. The state pays the companies a set amount per patient each month to provide coverage. Previously, the state paid doctors and hospitals directly for each service. … Critics say the pilot program showed no evidence that money was saved or patient health improved. …
Medicaid privatization begins here
Source: Barbara Peters Smith, Herald Tribune, June 27, 2014

This month marked the beginning of a quiet revolution in health care for some 120,000 people covered by Medicaid in Southwest Florida. Medicaid recipients in Sarasota, Manatee and Charlotte counties are in the latest group to select a for-profit company to manage their care, or have one chosen for them. State officials stressed that in the 60-day transition period that began June 1, health care and prescription drug providers should continue to serve their Medicaid patients and will be paid for those services. Once the new program — known as Managed Medical Assistance — is in place, patients can only use providers that have a contract with their chosen or assigned plans….

State health reform plans include Medicaid managed care

Some of Florida’s most vulnerable residents — the frail elderly and poor or disabled adults — will be ushered into a new era of healthcare over the next five months that will change the way they receive their taxpayer funded long-term care from Medicaid, the federal-state program for the poor and disabled. These residents, about 90,000 statewide including an estimated 25,000 in Miami-Dade, Broward and Monroe counties, soon will have their living assistance services managed by a private insurance company as Florida health officials roll out an ambitious reform of Medicaid that began Thursday in the Orlando area with an estimated 9,300 eligible Medicaid recipients becoming the first to be enrolled in long-term managed care…

Medicaid prisoners ‘devastating’ Carson-Tahoe Health’s bottom line

Source: Geoff Dornan, August 27, 2014

When the state decided to shift prison inmates to Medicaid to save the state on their health-care costs, no one asked what the impact would be on Carson-Tahoe Regional Medical Center. According to Carson Tahoe Health CEO Ed Epperson, the impact has been “devastating.” Lawmakers and the governor in 2013 decided to drop the Hometown Health plan they had used for years to cover inmate hospitalizations. With the implementation of the Affordable Care Act, state officials were told inmates could qualify for Medicaid coverage at a much lower rate. But Medicaid pays the hospital far less than the Hometown Health plan. …

Epperson said CTH gets about 85 percent of inmate hospitalizations in the northern half of the state, and more than any of the big hospitals in Southern Nevada. … Schardin said unless something is done, “you may be hearing about us not taking care of the prisoners because it’s devastating to our bottom line.” …

The Impact of For-Profit Medicine on Medicare

Source: Office of Senator Chris Murphy, August 15, 2014

…Research demonstrates that there are differences between for-profit and nonprofit healthcare providers, and we should expect to see some of these differences play out in Connecticut should the proposed conversions take place. This report outlines some of that research, with a particular focus on hospitals, and extrapolates what the potential impact would be to Medicare as a result of further hospital conversions in Connecticut and across the nation.

Key Findings:
● There has been substantial growth in the number of for-profit hospitals in recent years. A decade ago, only 14 percent of all hospitals in the United States were for-profit. Today, one in five community hospitals are investor-owned.
● For-profit hospitals are more likely to offer financially profitable services. For example, for-profits were 7 percent more likely to provide open-heart surgery than non-profits and 8 percent less likely to offer psychiatric emergency services. Tests for more than thirty other services yielded similar results. The study also found that for-profits were more responsive to rapid changes in profitability than the other types of hospitals.
● There has been a substantial increase in the number of for-profit long-term care hospitals (LTCHs) and the increase has occurred predominantly in states that already had this specialized level of care. On average, Medicare accounts for two-thirds of all LTCH discharges and pays these hospitals almost $39,000 per case. From 2003-2011, there was a 60 percent increase in for-profit long-term care hospitals, which corresponded with a 46 percent increase in total spending for these hospitals.
● States with higher percentages of for-profit hospitals spend more per Medicare beneficiary than states with high percentages of non-profit hospitals. In general, for-profit dominant states spend 3 percent more per Medicare enrollee than non-profit dominant states. Many of these states lack a regulatory framework to prevent excessive healthcare facilities and services. This “build it and they will come” mentality not only applies to for-profit hospitals but also to other for-profit operators in these states.
● If per-enrollee spending was at the same rate in the top non-profit states as in the top for-profit states, the Medicare program would have spent nearly $2 billion more in 2009. If Connecticut’s per-enrollee spending was the same as for-profit spending, Medicare would have spent $173 million more in that same year for Connecticut beneficiaries.
● Non-profit hospital behavior changes when for-profits are in the same market. This “spillover” effect could be problematic for the existing network of non-profit hospitals in Connecticut that plan to stay non-profit.
● Research has found that, the more for-profit hospitals that are in a city, the more nonprofit hospitals in that area (1) respond aggressively to revenue-increasing opportunities, (2) adopt profitable services, (3) discourage admissions of unprofitable patients, and (4) reduce resources devoted to treating the patients they do admit. Conversely, the presence of nonprofits in a community is associated with increased quality of care in for-profit nursing homes, reduced mortality rates in for-profit dialysis facilities, and increased trustworthiness of for-profit health plans….

Department of Health and Human Services-Division of Medical Assistance-Medicaid Provider Eligibility

Source: Beth A. Wood, State Auditor of North Carolina, August 2014

All individuals or organizations (providers) who deliver health services or goods to Medicaid recipients must apply through an application process. The application review process investigates the providers’ past and verifies all licenses and credentials. Without approval, the providers cannot receive Medicaid payments for provided services.

The screening and enrollment of Medicaid providers is required by federal laws and regulations implemented to help prevent fraud, waste and abuse. Federal laws instruct the states on screening providers based on categories of risk for fraud and abuse. High risk providers receive the highest level of scrutiny.

Federal laws do not set standards or criteria to determine a provider’s enrollment qualifications. That decision is left to the state Medicaid agency.

The Department of Health and Human Services’ Division of Medical Assistance (Division) is responsible for setting qualification requirements and enrolling providers. Within the Division, the Provider Relations Section is directly responsible for ensuring that approved Medicaid providers meet qualification requirements.

The Division outsources the application review process to Computer Sciences Corporation, Inc. (Contractor). The Office of Medicaid Management Information Systems Services oversees the contract with the Contractor. The portion of the contract that covers provider enrollment accounted for $4.6 million in fiscal year 2012 and $5.3 million in fiscal year 2013.

The provider enrollment process is the first step in program integrity efforts to help prevent fraud and abuse in North Carolina’s Medicaid Program. Currently, Medicaid spends about $13.5 billion annually in federal and state funds.

Report Summary:
The results of our audit disclosed deficiencies in internal control that are considered reportable under Government Auditing Standards. Specifically, the Division did not have adequate documentation and evidence to support approving 65% of higher risk providers during calendar year 2012. In addition, the Division’s Contractor’s enrollment review procedures allowed a 30% error rate in performing and documenting mandatory verification checks. These deficiencies in the Medicaid Provider enrollment process increase the risk of unqualified providers participating in the Medicaid Program. Further, the contract for provider enrollment lacks adequate performance measures to hold the Contractor accountable for processing applications accurately and reliably. The Department of Health and Human Services generally agreed with our findings and recommendations, however, an auditor’s response was necessary to clarify certain statements in the Department’s response. Details about each item are provided in the Audit Findings, Recommendations and Responses section of the report.

Key Findings:
• Deficiencies in the enrollment process increase the risk of unqualified providers participating in the Medicaid Program.
• Documentation to support higher risk provider applications is often not available or insufficient to support the application approval.
• The Contractor’s enrollment review procedures do not provide reasonable assurance that only qualified providers are approved to participate in the NC Medicaid program.
• The Contractor does not always have evidence to support that mandatory verification checks were completed.
• Quality assurance reviews were not conducted or were ineffective.
• Contract lacks adequate performance measures to hold the Contractor accountable for processing applications accurately and reliably.