Healthcare providers in Indiana are suing the state's Medicaid office, saying the agency hasn't been making timely payments to providers.
Medical Associates, a group of emergency room physicians in Indianapolis, filed a class-action lawsuit in Marion County Circuit/Superior Court in Indian-apolis in June. The suit was filed after Indiana and its Medicaid administrator, EDS Corp., switched to a new computer system in February and the state subsequently fell more than $100 million behind on Medicaid payments.
"There's been a lack of sensitivity by the state toward the providers that take care of Indiana's neediest healthcare recipients," said Irwin Levin, an attorney representing Medical Associates, which cares for 12,000 Medicaid patients annually. "There are a lot of healthcare providers that won't take Medicaid patients, and now they've created an environment that's even less palatable for them."
The state acknowledged early glitches in the $5 million system installed in February but says it has rebounded and is processing Medicaid claims several times faster than the old system.
"We changed from an 18-year-old computer system to a new system with lots and lots of changes and lots of opportunities to make mistakes," said James Verdier, state Medicaid director.
The suit claims the state is violating federal and state laws. Indiana state law says Medicaid claims must be acted on "within 30 days of receiving them." Meanwhile, federal law says the state must pay 90% of claims within 30 days if it has the required billing information.
Levin says providers were due $100 million as of mid-June.
In an effort to cushion the blow of the late payments, the state paid providers more than $200 million in cash advances during the past four months. "We've recouped just $70 million of the more than $200 million in cash advances," Verdier said. "Much more cash is out our door than providers are going to be able to justify that they are short.
"Indiana is paying its Medicaid bills, unlike our neighbor, Illinois," Verdier said, citing Medicaid problems in Illinois, which owes providers more than $1 billion in unpaid claims.