Patti's Blog - Advocate for Elders, People with Disabilities and Their Families: Medicaid - Medicare

Patti's Blog - Advocate for Elders, People with Disabilities and Their Families: Medicaid - Medicare

Hawaii DOE is billing Medicaid for OT, PT and Speech services our kids are getting at school

Several months ago, I wrote that I had asked the Hawaii Department of Edcuation for an accounting of all funds applied for and/or received from Medicaid for my daughter's services.  I was told verbally, in no uncertain terms, that DOE had received nothing from Medicaid for Hannah's services.

I now have the documentation to show that DOE has been billing Hawaii Medquest for my daughter's occupational therapy, physical therapy and speech therapy services since May 2009.  They have received reimbursements for services provided back to December of 2008.

December 2008 is coincidentally when I received a letter from Hawaii DOE stating that if I did NOT sign and return the letter to them, I was explicitly giving them permission to bill Medicaid on my daughter's behalf.

According to a report by former School Superintendant Pat Hamamoto to the state legislature in December 2009, the state had identified approximately 2500 special ed students receiving Medicaid for whom federally funded reimbursements could be sought.

That's only ten percent of all Hawaii kids receiving special education services.  It's also only about ten percent of all Hawaii children already signed up for Medicaid who have been referred for specialist medical treatments of some sort.

I've written a long article on the Children's Disability Rights Education Association "News and Alerts" page about the need to ensure our kids are signed up for Medicaid, and how we can go about doing so.

It's a gift we as parents can give our children that the law has never given us access to before. And if the schools do their job, they'll actually benefit by receiving federal reimbursements for 75% of the funds they are already spending on your child.

It's a win-win for everyone.

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.

Why is Hawaii not collecting all the Medicaid stimulus funds available to the state?

A three month survey of how efficiently states are claiming their Medicaid stimulus funds from the federal government shows that Hawaii has consistently been in the bottom five.

The statistics come from the federal government website www.recovery.gov.  I have isolated the figures just for Medicaid out of the totals received from the federal Department of Health and Human Services.  The survey covers all fifty states and the District of Columbia.

In December 2009, Hawaii was third from the bottom, having claimed only eighty percent of the total funds available.  In February, Hawaii was second from the bottom, having claimed only 75% of the total.  In March 2010, Hawaii was fifth from the bottom, collecting 86% of the funds available.  However, the total amount of funds available did not change from February to March, 2010 for Hawaii.

The median percentage of funds claimed in March 2010 was 97%.  Ten states managed to collect 100% of the funds available, with another twelve collecting between 98% and 99%.

Hawaii outsourcing hundreds of millions of dollars to the mainland

It appears that Hawaii's Departments of Education and Human Services are out-sourcing information technology and other business to the mainland, losing the state hundreds of millions of dollars.

Hawaii is the only state in the country that depends on another state to be its fiscal agent for Medicaid.  While I've been unable to find the contracts themselves, a DHHS report noted the state spent about $48 million between June 2002 and December 2004 on its contracts with Arizona, ACS and HMSA.  ACS and Arizona now operate the entire contract, which could easily cost as much if not more than it did six years ago.

Since the Medicaid information system is operated by Arizona, ACS, which has the local contract with DHS, cannot perform any on-site maintenance or repairs for the system.
The contract with Arizona necessitated a contract with another Arizona firm, Fourthought Group.  They were paid $1.8 million over 24 months in 2004-2006, to make sure the HIPAA security system worked on the computer information system operated by Arizona.

Hawaii DHS has paid about $5.25 million to D.C. law firm Covington & Burling to write, re-write and defend legally the state's Medquest contracts with UnitedHealth and Wellcare.  C&B have also represented UnitedHealth in the past.  The most recent contract is from March 2010 for an additional $500,000. 

Hawaii's Medquest contracts with UnitedHealth of Minnesota and Wellcare of Florida are shipping out over $310 million to the mainland, including over $100 million in lost insurance premium taxes.  This does not even begin to factor in the local jobs that have been lost due to cost-cutting measures the two companies have implemented that appear just to shore up their profit margins.

Hawaii's Department of Education has been paying the University of Massachusetts Medical School since 2006 to handle Medicaid reimbursements to the schools for special education health related services.  I calculated the other other day that the state seemed to be losing about $85 million in potential federal reimbursement in FY2010, in addition to whatever portion of the state's salaries could be reimbursed as administrative costs for the Medicaid program.  (As a sense of comparison, the state of Missouri was receiving over $5 million a quarter in federal funds just for administrative time.)  According to a DHS budget document, the schools are only receiving about $1.3 million this year in Medicaid reimbursements.  I have been unable to find what DOE is spending on the contract with the UMass Medical School for the past four years.

One has to wonder what our pro-Hawaii-business governor and legislators are thinking about when they make the decisions that lose our state so many millions of dollars in additional employment, services and taxes.