Two new reports out by state officials find that their respective Medicaid managed-care programs are rife with errors and waste. Blame was pinned on state Medicaid agencies as well as the private health insurers that cover Medicaid beneficiaries.
The reports from California and Massachusetts come just a few weeks after the CMS proposed a rule that would create the biggest changes in Medicaid managed-care regulations in more than a decade.
The California State Auditor on Tuesday chided regulators and health insurers who cover low-income residents in Medi-Cal, the name of the state's Medicaid program. About 9.3 million of the state's 12.2 million Medicaid beneficiaries are enrolled in managed-care plans. Those plans receive fixed monthly payments for each member they cover.
Anthem Blue Cross, Health Net and Partnership HealthPlan of California had inaccurate and inadequate provider networks, the audit found. Their directories of in-network providers had erroneous information for 3% to 23% of listed providers. Common errors included inaccurate telephone numbers and incorrectly labeling whether doctors were accepting new patients. Last year, California similarly found deficient provider information and networks in the state's new exchange plans.
But the auditor said the California Department of Health Care Services, which oversees Medicaid, failed to verify that the insurers' provider information was accurate and that beneficiaries were able to easily access care.
“This audit confirms longstanding concerns about the oversight of Medi-Cal managed-care plans,” said Anthony Wright, executive director of consumer advocacy group Health Access California, in a statement. “With the care of millions of Californians at stake, we need increased legislative and regulatory action to ensure patients can access the care they need.”
In Massachusetts, 1.7 million people are enrolled in a Medicaid managed-care plan. The program is called MassHealth. The Office of the State Auditor said in its report Tuesday that $521 million was squandered through improper payments, although the agency placed most of the fault on the state. For instance, MassHealth paid providers $233 million in fee-for-service medical claims for patients who were already enrolled in a managed-care plan, which receives lump-sum payments in advance.
“They represent duplicative spending because the Commonwealth paid twice for the same service: first as a portion of the capitated (per-member) premium and then through the (fee-for-service) claim,” the Massachusetts report said. A majority of the double-dipped payments went for behavioral health services and emergency dental care.
An additional $288 million was wasted because the managed-care insurers and Massachusetts did not have matching lists of what services had to be covered. “MassHealth has failed to fully realize the cost savings potential of managed-care organizations,” Massachusetts State Auditor Suzanne Bump said in a news release.
Problems with private Medicaid HMOs were the subject of an HHS Office of Inspector General report last year. The watchdog agency said Medicaid members couldn't quickly visit physicians due to poor state and federal oversight of provider network standards and a reliance on self-reported information from health insurers.
“Access to timely medical care is critical to improving the quality of care and may help reduce unnecessary costs resulting from delayed care,” Dr. Julie Taitsman, the OIG's chief medical officer, wrote in a Modern Healthcare op-ed in January. “Our testing was limited to the Medicaid program, but other sources suggest that access to timely care and accurate provider information are not exclusively issues for patients in Medicaid managed care.”
Indeed, the networks and provider directories of Medicare Advantage and other private health plans have had issues of their own. The CMS' proposed Medicaid managed-care rule included provisions to beef up provider networks, but the federal government said states will play the primary role in determining parameters.