Newspaper article St Louis Post-Dispatch (MO)

Medicaid Agencies Keep Using Problem Providers; States Are Reluctant to Drop Managed-Care Companies Outright, for Fear of Leaving Poorest Patients in the Lurch

Newspaper article St Louis Post-Dispatch (MO)

Medicaid Agencies Keep Using Problem Providers; States Are Reluctant to Drop Managed-Care Companies Outright, for Fear of Leaving Poorest Patients in the Lurch

Article excerpt

In Florida, a national managed-care company's former top executives were convicted in a scheme to rip off Medicaid. In Illinois, a state official concluded two Medicaid plans were providing "abysmal" care. In Ohio, a nonprofit group paid millions to settle civil fraud allegations that it failed to screen special- needs children and faked data.

Despite these problems, state health agencies in these and other states continued to contract with the companies to provide services to patients on Medicaid, the federal-state program for the poor and disabled.

Health care experts say that's because states are reluctant to drop Medicaid plans out of fear of leaving patients in a bind.

"You probably won't find many examples of states flat-out pulling the plug. That's sort of the nuclear option," said James Verdier, a senior fellow at Mathematica Policy Research, a nonpartisan think tank. "There are all sorts of sanctions you can impose financial penalties, limitations on enrolling new beneficiaries."

States are increasingly turning to insurance companies to provide coverage for people on Medicaid in hopes of saving money and improving care. About 30 million Americans on Medicaid now belong to a managed-care plan, and beginning in January, millions more will become eligible for Medicaid under the federal health law. Many will be placed in managed care. States give managed-care plans a fixed amount per member each month to set up networks of doctors and hospitals that provide care to members.

STATES' RESPONSIBILITY

Thirty-six states and the District of Columbia have enrolled some or all of their Medicaid population in private health plans, many of them owned by major insurers that operate in multiple states.

State health officials are responsible not only for monitoring and oversight, but for enforcing contracts and cracking down on plans that violate the rules or perform poorly.

Advocates say that states need to do a better job of policing problem plans and not wait until a contract is up for renewal to pull the plug.

"You have a situation where too many states take a hands-off approach. I think there's a significant risk of substantial harm to consumers," said Alice Dembner, project director for Community Catalyst, a national health care consumer advocacy group.

Occasionally, a state does force out a plan, but it's usually insurance regulators acting because of money issues. …

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