Some small Cedar Rapids providers run into Medicaid issues after privatization

May 26--Two months into the $5 billion handover of the state-run Medicaid program to private managed care, several small providers in Cedar Rapids have run into snags affecting their bottom lines.

Dan Hernandez, owner of the Way Shuttle -- a Non-Emergency Medical Transportation (NEMT) provider -- estimates he's seen a 35 percent drop in business since April 1.

Transportation services work a little differently than with other Medicaid providers. Each managed-care organization (MCO) works with a transportation broker. Brokers then contract with transportation providers, receive calls from Medicaid recipients and handle the ride scheduling.

Under the state-run, fee-for-service Medicaid program, Iowa worked with transportation broker Access2Care, a Colorado-based company. Now, under managed care, AmeriHealth Caritas Iowa works with Access2Care; UnitedHealthcare of the River Valley works with Missouri-based MTM; and Amerigroup Iowa works with Atlanta-based LogistiCare.

Part of the problem, Hernandez said, is that while filling out an online application company to contract with LogistiCare (Amerigroup), a prompt or error message led him to believe his company was not large enough to work with. MTM (UnitedHealthcare) has yet to schedule him any rides.

"I contacted MTM, filled out the application online, but a few weeks go by and I don't hear anything," he recalled. "So I called and was told, 'We'll get back to you when we need you.'"

To compensate for the lost business, he's now working for Uber in his down time.

"I'm waiting to see if it evens out," he said.

About 90 percent of his business was providing rides to Medicaid patients, he said, and he's built relationships with many of them while taking them to and from medical appointments.

Amerigroup spokeswoman Denise Malecki said that LogistiCare does not have a minimum car requirement and that the broker would be happy to work with his shuttle service and walk him through the application process.

Meanwhile, Hernandez said he's seen an increase in cabs from Waterloo and Iowa City companies providing these services to Medicaid enrollees.

"I don't how they do business, but cars coming from those areas to drive someone five, six or seven miles to an appointment ...," he said, adding it does not seem like an efficient use of resources.

Nick Sorbe, manager of Dolly's Taxi in Waterloo, said the company certainly has seen an uptick in cars scheduled to shuttle Medicaid recipients around since the transition.

Dolly's -- which has 25 total cars to provide NEMT services -- works to build schedules that make sense if drivers are called to areas such as Cedar Rapids, he said.

"We've built our business model on providing transportation when others aren't available," he said, explaining the company has picked up Medicaid enrollees as far west as Sioux City for appointments. "We've got a wide range of service."

Billing issues

Iowa Medicaid Director Mikki Stier said earlier in May that the three MCOs have received, processed and paid more than 300,000 claims.

But Cedar Rapids-based Pediatric Center still is ironing out several claims processing issues two-months into the transition, said Chris McAndrew, office administer of the private primary care clinic. The clinic sent in several dozen claims after the switch to test the billing process, but only two were processed correctly, McAndrew said.

That lead her to hold off on sending other claims in until problems were resolved.

"We just sent in a bunch because we don't want to get into a cash crunch," she added.

Pediatric Center met with representative from the MCOs on Thursday to try to fix the problems.

The company, which has six physicians that work between two locations, has not been able to get all three MCOs to properly list physicians with both addresses -- despite submitting names in February. This becomes an issue if a doctor works at one clinic but is listed as only working at the other clinic's address. McAndrew explained, because the MCO can't pay the claim.

In addition, under the old fee-for-service system, the clinic received an enhanced Medicaid reimbursement rate closer to Medicare reimbursement levels. This was an initiative started under the Affordable Care Act aimed to improve access to primary care as Medicaid coverage expanded.

However, the pediatrics clinic has been unable to receive assurance from one of the MCOs that those enhanced fees will continue. The other two were not paying at the enhanced fee level but told the clinic Thursday that they believe the issue was corrected.

There also is uncertainty regarding immunization reimbursements for Hawk-i enrollees -- a state insurance program for low-income children. Under state-run Medicaid, the clinic was sent vials of vaccines from the Iowa Department of Public Health's Vaccines for Children program -- federally purchased immunizations eligible for low-income children at no cost to health care providers.

The clinic would administer the vaccine and then get reimbursed for the cost of administration.

Under managed care, providers now must bill the MCOs directly for vaccine costs and administration. However, McAndrew said that the state's reimbursement rates have not been updated in quite some time and are significantly below cost when you factor in the cost of the vaccines.

"We were prepared to send kids to the county health department because we couldn't lose that money," she said. "The state sent out an email at the eleventh hour saying we would be reimbursed at cost. But there is no definition of what 'cost' is. There's no instructions and the MCOs told us they don't know how to handle it."

This is especially problematic as the summer is a busy immunization time as parents prepare for the upcoming school year.

"We only have a 90-day waiting period" to bill, she said. "The MCOs told us it's probably better to just get it in and have it paid wrong."

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