Tuesday, April 13, 2010

What a 50% Medicaid payment error rate could mean for Hawaii

On April 7, I emailed CMS asking to confirm a rumor I had heard.  Part of the rumor had to do with a possible 50% error rate on Hawaii's Medicaid program.

UPDATE:  April 20, 2010
I heard today from CMS that they have confirmed that the two for-profit health insurance companies will continue to operate the state's Medicaid program.  This is good news for enrollees who are in the appeals process from denials of services, medications, etc.

She was not able to confirm, however, anything about the rumor of the 50% payment error rate.

What does a 50% Medicaid payment error rate mean?  It can mean that half of all Medicaid claims are paid twice:  once by either Evercare or Ohana through their capitation payments, and the second time by Medicaid's fee for service program.

Here is how it might happen:

1.  ACS, as the fiscal agent for Hawaii's fee-for-service Medicaid program, charges a fee for every claim they submit.

2.  Hawaii receives matching funds from the federal government for ACS's services, just as they do for the state's QExA program operated by Evercare and Ohana.

3.  ACS is billing the state for claims incurred by patients served by Evercare and Ohana.

4.  ACS would then be receiving federal (and state) funds for claims that are the responsibility of Evercare and Ohana and which are included in the calculations for the monthly per person payments (capitation payment) they receive.  Evercare (UnitedHealth) and Ohana (Wellcare) are retaining their full capitation payments, hence the double payments.

What that means for Hawaii is that suddenly our Medicaid budget could be half of what it should be.  For example, since the state's total Medicaid budget for FY2010 is about $1.4 billion, then suddenly the state might have only $700 million to spend.

A national report by CMS published last year found that the payment error rate nationwide for managed care Medicaid organizations was one tenth of one percent.  Nationwide, CMS found a payment error rate of 8.72%.  These figures, which include Hawaii, are for FY2008, before Evercare and Ohana began their Hawaii contracts.

In March, Hawaii Governor Linda Lingle blamed the state's "Cadillac" Medicaid program for 75% of the state's budget deficit by 2014.  As far as I can tell, the only "cadillacs" may be those driven by whoever is pocketing all these double payments.

No comments:

Post a Comment

About Me

My photo
I'm the mom of a child with disabilities. Hannah's first neurologist said she might never develop beyond the level of a 2 month old infant, and there wasn't anything I could do about it. The brain damage was just too severe. Nine years later, she walks, uses a touchscreen computer and I've just been shown she can learn to construct sentences and do simple math with the right piece of technology. Along the way, I discovered I needed to teach myself what Hannah's rights to services really were. Learning about early intervention services led to reading about IDEA and then to EPSDT. I've been waiting for the Obama administration to realize the power and potential of EPSDT for the medical rights - including the right to stay at home with their families - of children with disabilities. The health reform people talk about long term care, and the disability people talk about education and employment, but nobody is talking about EPSDT. So I am.