Iowa Senators hear Medicaid provider concerns regarding billing woes

July 27--DES MOINES -- For Tim Roberts, chief financial officer of ABCM Corp., the shift to Medicaid managed care has meant denied payments and long waits.

The Hampton-based organization, which has more than 30 skilled nursing facilities, long-term care centers and independent and assisted-living facilities across the state, is owed more than $3.3 million in Medicaid claims.

"We have had to lay off about 20 people already, and that could grow if the shortfall continues," Roberts said during a four-hour Senate Human Resources committee meeting at the state capitol on Tuesday. "This shift has placed a huge burden to providers by not giving them the cash flow they desperately need."

Legislators heard testimony from health care providers, Medicaid beneficiaries and advocates, the state and the three managed-care organizations now tasked with providing health care for more than 560,000 Medicaid enrollees.

Iowa handed over its $5 billion Medicaid program to the three private insurers on April 1.

At the heart of Tuesday's out-of-session committee meeting was provider payments -- MCOs and the state say the majority of claims are being paid cleanly and timely, while providers testified otherwise.

According to state Department of Human Services data released Tuesday, the state's three MCOs -- Amerigroup Iowa, AmeriHealth Caritas Iowa and UnitedHealthcare of the River Valley -- have paid a total of $899.3 million to providers from April through June.

Data shows that of the more than 4.9 million claims submitted in those months:

--About 3.4 million have been paid

--1.2 million have been denied

--300,000 have been suspended

--101,000 have been rejected, meaning the claims were missing key pieces of information.

State officials also pointed to data that showed the three MCOs were paying at least 95 percent of claims within 21 days.

"No major health care transition goes perfectly," Iowa Medicaid Director Mikki Stier said. "But we are confident that members can access the services they depend on and the majority of providers are being paid. There are still challenges that come about in a change of this magnitude."

Stier said many of these payment issues stem from a "cultural shift" with Medicaid providers now moving away from paper claims and toward a more automated system in managed care. The state said the most likely reasons for claims to be denied or rejected include duplicate claims, missing information, invalid service dates or services are not approved benefits.

But providers, including representatives from the state's hospitals, not-for-profit agencies, individual home health providers and nursing homes, said billing codes have been incorrect, payments have been inaccurate and the claims that were paid have lagged.

JoEllen Arends, a nurse and case manager in Franklin County, said she's heard from several smaller providers that they may stop offering services to Medicaid patients because they are owed too much money. She cited another small provider that is owed $58,000.

"There is a disconnect between the data and this testimony," said Sen. Liz Mathis, D-Cedar Rapids, Human Resources committee chairwoman.

When it was the turn of the three MCO leaders -- Kim Foltz of United Healthcare, Cheryl Harding of AmeriHealth and Cynthia MacDonald of Amerigroup -- to testify, Senators grilled them for more than an hour, asking them how they felt after hearing provider and patient testimony and how much longer these struggles may play out.

"We are in the very beginning of a transition of a very significant program change," AmeriHealth's Harding said. "It is always difficult to go through change. We feel the hardship and certainly reach out to providers in these situations.

"I would not say the first three months have been perfect, but there are positive stories along with negative stories. We have worked quickly to respond and address problems. It's tough at the beginning, but it gets better and better as time goes on."

All three MCOs said they believed they were working diligently and efficiently to pay claims, and thought the number of rejected claims will begin to level off once providers receive more education and become more comfortable with the new process.

But some Senators remained skeptical.

"I have no doubt that Kim (Foltz), Cynthia (MacDonald) and Cheryl (Harding), (and) Mikki (Stier) ... are very smart women, who know what they're doing and are trying to move this along," Mathis said. "But we have fallen short in this transition.

"... You all have a vision, you know what it is supposed to look like. Let's work toward that in the next 30 days."

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