Monday, January 17, 2011

The Medicaid PR Machine

State officials and insurance company executives use misinformation against both the public and the feds.

1. CMS publishes lists of all the Medicaid waivers in each state, the name of the private provider, and the number of people serviced. For all of the programs managed under a capitation payment system, providers were identified as either a Commercial Managed Care Organization (CMCO) or a Medicaid Managed Care Organization. (MMCO).

The most recent complete list I had to work with was June 2009. CMS reported a total of 6.7 million people received their care from CMCOs, and another 5.7 million were enrolled in MMCOs.

I looked at the SEC quarterly filings for June 30, 2009, and just the six companies I was tracking reported 10 million Medicaid enrollees. Amerigroup, Molina, Wellcare and UnitedHealth all reported themselves as both CMCOs and MMCOs.

2. Somewhere along the line, the distinction between CMCOs and MMCOs has been blurred to the point that everything from the trade press to national news talks about "managed care" Medicaid as if has something to do with improved care. The term is essentially a replacement for "capitated payment plan", which has much more to do with profits than care.

Unless, of course, the provider company is a non-profit corporation. There are many non-profit Medicaid providers, or providers with MLRs over 90%. But this is not the segment of the industry that is growing.

3. The former State Medicaid Director of Alabama was recently quoted in the media saying

"We've got people asking us to do 24/7 at-home care," she says, "which means that we'll be paying $500,000 for one individual. And then you have to debate as a society is that what we want to do versus taking that $500,000 and spending it on prenatal care for 10,000 women. I mean it's a societal question, it's a conundrum almost."

This is not a comparison of apples with apples, but more apples with aardvarks. If you look at the way DHHS used to report stimulus funds disbursements, you'll see through how many different funding streams each state received money. Money for maternal and child health care comes through different contracts and sources than the Medicaid funds to pay to keep children at home with their families. "Medicaid" is not some single pot of funds into which the feds donate money and the states spend it willy nilly for whatever they want.

The "societal question" is whether the state is going to spend $500,000 a year to keep that person home with their family, or $600,000 to lock them up in an institution. Either way, federal funds are reimbursing at least two-thirds of the cost.

The other question has to be why anyone in their right mind would dream of turning the contract to provide that $500,000 worth of medical services over to a company that will immediately skim $85,000 off the top by cutting services to the new policyholder.

4.  The other side of the nomenclature issue occurs when state officials start talking about their health care budget deficits.   I have found none that mentioned how much of the past deficit is due to profit payouts to insurance providers, or how much of the future deficit could be covered by eliminating the profit. 

For instance, this article on the need for cuts in Hawaii's Medicaid program makes it sound as if all the insurance companies are equal, and everyone has approximately the same share of the population.  In fact, just two companies, UnitedHealth (which goes as Evercare) and Wellcare (which is known as Ohana here) receive at least $1.2 billion of Hawaii's total annual Medicaid budget.  The seventeen percent average net income from the MLR means about $204 million a year is going into the two sets of corporate pockets. In exchange they are supposed to be providing home care services to people who are too disabled to care for themselves. 

Interestingly, during the time that the state cut payments to the smaller companies, they were reportedly continuing to make monthly payments to UnitedHealth and Wellcare. 

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About Me

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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.