Category Archives: Medicaid/Medicare

Computer crash hinders Texas Attorney General’s Medicaid fraud case

Source: By EMILY RAMSHAW and ROBERT T. GARRETT, The Dallas Morning News (TX), Thursday, October 23, 2008

A massive computer crash that destroyed hundreds of the state attorney general’s confidential documents may prevent scores of Medicaid fraud prosecutions and has revealed serious problems with a newly expanded state outsourcing of computer services. ……. IBM, which leads a vendor group selected by the information resources department in the $863 million, seven-year outsourcing deal, said it still is investigating the matter. ……. The Medicaid fraud data loss is the worst problem to surface in the first 18 months of the state’s deal with the IBM-led group – and further blemishes a privatization push throughout state government that grew rapidly after Republicans gained control of the Legislature six years ago.

…… There have been other highly publicized problems with big outsourcing pushes by the Health and Human Services Commission – one that created privately run call centers and maintained software to support eligibility screening for public assistance, and another that privatized payroll and hiring at 12 social services agencies.

The Continuing Cost of Privatization: Extra Payments to Medicare Advantage

Source: B. Biles, E. Adrion, S. Guterman, The Commonwealth Fund, September 2008

The Medicare Modernization Act of 2003 explicitly increased Medicare payments to private Medicare Advantage (MA) plans. As a result, every MA plan in the nation is paid more for its enrollees than they would have been expected to cost in traditional fee-for-service Medicare. The authors calculate that payments to MA plans in 2008 will be 12.4 percent greater than the corresponding costs in traditional Medicare–an average increase of $986 per MA plan enrollee, for a total of more than $8.5 billion. Over the five-year period 2004-2008, extra payments to MA plans are estimated to have totaled nearly $33 billion. Although Congress recently enacted modest reductions in MA plan payments, these changes will not take effect until 2010. Moreover, while the new legislation removes a few factors contributing to the extra payments, a number of other factors remain unaffected.
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Private Medicare Plans’ Cost Questioned

Source: By ROBERT PEAR, New York Times, February 28, 2008

Private Medicare plans often cost beneficiaries more than the traditional government-run Medicare program, Congressional investigators say. Many private plans advertise extra benefits and low costs.

But in a report to be issued Thursday, the Government Accountability Office, an investigative arm of Congress, says that many people in private plans face higher costs for home health care, nursing homes and some hospital stays. About one-fifth of the 44 million Medicare beneficiaries — 9 million people — are in private plans, known as Medicare Advantage plans.

Related testimony from GAO: Medicare Advantage: Higher Spending Relative to Medicare Fee-for-Service May Not Ensure Lower Out-of-Pocket Costs for Beneficiaries

Audit: No sign of savings on state Medicaid

Source: By Deborah Yetter, The Courier-Journal (KY), Tuesday, December 18, 2007

A state audit found no evidence of savings in the state Medicaid program promised by the administration of former Gov. Ernie Fletcher, who claimed Medicaid reform as one of his top accomplishments in his failed re-election bid.

…… Luallen, a Democrat, said her office waited until after the Nov. 6 election to release the audit so it would not become an issue in the governor’s race.

……. Medicaid spends about $300 million a year on three private contractors to process claims, manage information, operate a call system for members and operate its prescription drug program. But until recently they operated with little oversight or accountability.

In July, Medicaid hired an outside company, Accenture, to monitor the three other outside contractors — even though Texas fired that company last year for poor performance on a contract.

…….. State Sen. Ernesto Scorsone, a Lexington Democrat on the Health and Welfare Committee, said he’s concerned about the growth in outside contractors for the Medicaid program listed in the audit report.

“I think the only winners are the outside vendors who have made money off the state,” he said.

ACS Announces $18.5 Million Contract with Idaho Medicaid

Source: ACS news release, November 20, 2007: 08:30 AM EST

Affiliated Computer Services, Inc. today announced a contract with the Idaho Department of Health and Welfare to provide pharmacy benefits management (PBM) services for its Medicaid program. The contract has a length of up to 10 years and a total value of $18.5 million, if a three-year option is exercised.

Editorial: State should hit brakes in Medicaid experiment

Source: Daytona Beach News Journal (FL), October 22, 2007

Even as former Gov. Jeb Bush was pushing the state into a massive privatization of Medicaid, advocates were warning: Not so fast.

Bush didn’t listen. He wanted sweeping changes, statewide, and he wanted them rapidly. He didn’t want to hear that private networks weren’t ready to take on a huge influx of patients. He wouldn’t listen to those who worried about forcing a medically vulnerable population to choose among health plans to find the one that best meets their needs. He seemed to revel in the attention Florida got from other states for pushing ahead with changes with precious little evidence that they would save the state money.

Fortunately for vulnerable Floridians, lawmakers refused to swoon at Bush’s feet. They agreed to a limited privatization plan in two counties — Broward and Duval — urbanized areas where the program would have the most likely chance of success. And they included explicit provisions to keep Bush from expanding the program without legislative approval.

A new report (.pdf) by the Agency for Health Care Administration’s inspector general, Linda Keen, suggests the legislative caution was well-founded — and that Gov. Charlie Crist has inherited a mess. Bush’s “big hairy audacious” reforms, as he called them, aren’t working out too well.

Medicare auditing program is halted

Source: By David Whitney, Sacramento Bee (CA), Thursday, September 27, 2007

Medicare officials have declared a temporary “pause” in a controversial auditing program that has put a strain on dozens of California rehabilitation hospitals forced to surrender tens of millions of dollars on allegations that the care they provided elderly patients was medically unnecessary.

……. The association has been the leading critic of the program and the California contractor, Atlanta-based PRG-Schultz International, because of its rejection of almost all Medicare claims involving elderly patients treated at rehabilitation hospitals after knee or hip replacement.

…… The audit program was established as a test by Congress in 2002 in an effort to reduce unnecessary Medicare spending. It took effect in 2005 in three states — California, New York and Florida, all high-cost Medicare states. But rather than being paid a fee for their work, auditors are paid commissions of between 25 percent and 30 percent of the money they collect from rejecting claims as far back as five years. In the case of PRG-Schultz, its contract permits it to keep the bounty so long as its decisions are not overturned at the first and second stages of administrative review. The reversals, however, are coming in the third stage.