Idaho mental health contractor Optum had $5M payments left over in latest year

Jan. 19--[Editor's note: This story has been corrected to say Optum Idaho had no leftover funds in its first year. A previous version said it lost money.]

Optum has $5 million left over from its most recent year of payments from the state to manage Idaho Medicaid outpatient behavioral health. The company -- a division of UnitedHealth Group -- plans to solicit proposals in the spring to spend that money.

Idaho pays Optum about $10 million a month to administer its outpatient mental health and substance use disorder programs, under a multiyear contract. The company is allowed to keep 15 percent of the money for administrative overhead and profit. Whatever remains after payments and that 15-percent allowance must be reinvested into community health.

Optum Idaho Executive Director Becky diVittorio told the Statesman Monday that the money is likely to go to an organization that will help providers better deliver "recovery and resiliency services, person-centered programs that are comprehensive."

Optum also increased payment rates to providers by anywhere from 3 percent to 15 percent, depending on the type of service, starting on Jan. 1, diVittorio said.

The announcement of the leftover funds came during a report from state auditors about the performance of Idaho's now-outsourced Medicaid behavioral health plan.

Lawmakers had asked auditors to evaluate, among other things, the way Idaho's plan was created.

Idaho is not the only state to have outsourced its mental health Medicaid program -- under a model called "managed care," in which an insurance company runs the program from handling customer calls to paying providers.

But Idaho is the only state to have split up its outpatient and inpatient behavioral health money -- with most states lumping those pots of money together, to make it easier to shift patients to more-affordable preventive care and away from expensive hospital care.

The Office of Performance Evaluations presented its report on the program Monday. Among other things, analysts from the office said Idaho crafted the program intentionally to focus on outpatient managed care because it wanted to cut back on what it believed was overuse of a type of outpatient rehabilitation that cost tens of millions of dollars a year. But it failed to communicate its intentions to providers, causing confusion and anger.

Many providers voiced complaints to the Statesman and other news outlets during the first year of the contract. Among their complaints were that Optum was reimbursing them pennies on the dollar; that payments were sporadic; that Optum was accidentally sending private patient information to the wrong providers; and that they had to lay off employees and divert staff time to administration.

They have said they lost money during the first year. Optum Idaho said it did not have leftover funds in its first year.

Providers also have said their patients were more frequently ending up in crisis -- in the hospital or jail -- because of the changes made by Optum. The Office of Performance Evaluations report did not bear that out, but analysts said they did not look at every place a patient ends up during a mental health crisis.

"Annual per-member per-month inpatient costs paid by the Division of Medicaid increased only 0.8 percent during the first year of the contract," the report said.

The Office of Performance Evaluations analysts said the changes made by Optum likely would have been made by any other company Idaho hired to run its mental health contract. But, they said, the shortfalls in communication did not help when the contract got off to a rocky start, with lengthy call hold times and other problems.

Audrey Dutton: 208-377-6448, @IDS_Audrey

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