Health Care

January 2, 2014

In KanCare’s first year, payments lagging for some

KanCare – the state’s privatized Medicaid program – has been operating for a year, and for smaller providers, it’s been a mixed bag.

KanCare – the state’s privatized Medicaid program – has been operating for a year, and for smaller providers, it’s been a mixed bag.

Perhaps the most prevalent complaint among providers is the lack of timely reimbursements from the three managed care organizations – Amerigroup, United Health Care and Sunflower, a subsidiary of Centene.

Those are the companies that have administrative oversight over the state’s roughly 380,000 Medicaid recipients since the state made the move to privatize oversight and administration of Medicaid.

“It’s not all roses for the provider, that’s for sure. We’re the ones providing the services, and we expect to get paid for the services,” said Jay Stehley, owner of Interim Health Care of Wichita, which offers home health and hospice care.

The three managed care companies are paid a monthly per-member rate based on the number of Medicaid recipients enrolled in their plan, and they had 3 percent of their payments withheld by the state until the end of 2013 until it was determined that they had met certain requirements, such as prompt processing of claims made by providers.

State officials say whether the three companies will receive their 3 percent withholdings won’t be known until early spring.

Gov. Sam Brownback has said the move to privatize Medicaid will save the state more than $1 billion over the next five years.

“In the old Medicaid program, you would be able to bill, and within usually a week or two turnaround time you’d have your money, and so with the insurance companies, they’re typically about five weeks out in getting us paid,” Stehley said.

In response to the backlog, Interim has had to add staff to process claims, which adds to its costs, Stehley said.

About 5 to 7 percent of Interim’s business is Medicaid and the rest is Medicare or private pay.

Some of Interim’s competitors have stopped serving Medicaid patients because of issues with reimbursements, Stehley said.

Those who rely on Medicaid for most or all of their business are likely the hardest hit by the changes, Stehley said.

“The ones that simply do Medicaid, I feel for them,” Stehley said. “That’s a tough business to be in right now. The reimbursements are not very high, and if you don’t get paid ... it can create a cash flow problem.”

For Carrie Barker, who owns A 2 Z Helping Hands – a home health company with offices in Derby and Arkansas City – the move to privatized Medicaid has had a big impact.

Barker estimates she hasn’t received roughly $50,000 in reimbursements from the three managed care organizations.

She said the main billing issues she’s had have been with Sunflower, which is the MCO for most of her Medicaid clients. Her company has about 65 home health patients, about half of whom are on Medicaid. She has 34 employees.

“I can’t pay all of my bills. I’m paying my employees, but not the bills like I need to. I can’t pay myself very much either,” she said.

Before KanCare, Barker said she had some issues with reimbursement from the state, but not to the degree that it is now.

“I feel like they’re trying to run us out of business, but they’ll still get their money (from the state),” Barker said.

“I really hate making waves and making people upset, but in the long run, if I’m not getting paid, what am I supposed to do? I’m lost. ... If these people don’t have help in their homes, how are they going to live? They’re going to be put in a facility, and they don’t want to do that. I’m not out for the money. I’m out to help people, but I can’t do it if I don’t get paid.”

For others, the transition to KanCare has gone more smoothly, at least in recent months.

Brian Lindsey, who is co-owner of Broadway Home Medical, 808 S. Hillside, with his father, Mike Lindsey, said he has seen improvements in dealing with KanCare.

It was rocky in the beginning, he said, but now he grades it better than the state-run system.

About 15 percent of his business is through Medicaid, Lindsey said.

“It’s getting better and better, and we’re getting payments we wouldn’t have gotten before, but there are still a few we’re fighting. Amerigroup been the roughest one for us,” Lindsey said.

“We do a lot of Medicaid breast pumps, and at the beginning of the year they had no prior authorization, then they said it was required, but didn’t tell us. Then they changed their mind to no authorization and then went back to authorization. It’s been a nightmare getting a lot of these breast pump claims paid.”

For medical devices that can help with prevention, Lindsey said he’s seen more cooperation from the managed care companies.

“Some of these companies see the value of home medical and purchasing home medical supplies to prevent injuries and illness down the road. They seem to care more about prevention, which is basically what our industry is about.”

Payments to hospitals

It’s not just smaller providers that have had issues with payments. So have larger hospitals.

Bruce Witt, director of government relations for Via Christi Health, said that through November, the most recent available data, the health system’s accounts receivable that were more than 90 days old were double what they were from the same time period before KanCare went into effect.

“It’s still not at the pace we’d like,” said Witt, who said Via Christi recently had meetings with senior leaders from all three managed care companies about payment issues.

“I think a lot of the issues involve how they review for medical necessity and prior authorizations,” Witt said.

Matt Leary, chief financial officer for Wesley Medical Center, said Wesley has seen improvement with KanCare over the last year, but the number of accounts receivable past 90 days also has more than doubled from before privatization.

Since the beginning of KanCare, more than $3.7 million has been denied by the three companies for Wesley services, Leary said.

The hospital also had to hire additional staff to manage billing issues, Leary said.

Leary said the hospital also has seen a more than 3 percent increase in emergency room visits for the Medicaid population in the last year.

“Fundamentally, we haven’t seen a shift,” Leary said. “One of the things KanCare said it was going to try to do is try to direct people to the appropriate setting. ... It’s not redirecting these people to better, more appropriate care.”

“It’s never going to be a perfect system,” he said. “We just need to continue to work with it. We’ve seen progress in 2013 and that will carry to 2014.”

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