Kaiser Health News is an excellent source of information on health care and health care reform. See About KHN.
This article, from Kaiser Health News is about states that can't seem to separate themselves from Medicaid contractors that have defrauded them, misused Medicaid funds, and otherwise failed to meet their obligations under contracts with state Medicaid agencies.
Most states give the excuse that they do not want to disrupt care to Medicaid recipients by abruptly canceling contracts with health plans. The hesitancy of states to cancel contracts or otherwise penalize contractors for abuses may have more to do with the relative powerlessness of Medicaid recipients (who are poor, disabled, and elderly) who bear the brunt of poor quality or unavailable services and the relatively powerful health plans and their political clout with state decision makers.
Here are some excerpts from the article at KHN:
"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 paid millions to settle civil fraud allegations that it failed to screen children with special needs and faked data.
"Despite these problems, state health agencies in these — and other states — continued to contract with the plans to provide services to patients on Medicaid, the federal-state program for the poor and disabled."
"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 under the federal health law. Many will be placed in managed care.
"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."
"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.
"Dembner’s group is surveying states to find out if — and how — they sanction managed care plans, focusing on companies that operate in multiple states.
"'So far, we found that only a small number of states impose fines and many of them are for paperwork violations — the plans didn’t file this form or that form on time,' Dembner said, noting that just a handful of states have levied sizeable penalties."
"Linda Edwards Gockel, spokeswoman for the Texas Health and Human Services Commission, said that in 2009, officials were concerned about a pilot program in the Dallas-Fort Worth area run by Evercare, a subsidiary of UnitedHealth Group. The program, which coordinated care and long-term services for the elderly and people with disabilities, had been fined more than $600,000 for not providing proper access to care and failing to coordinate services.
"Gockel said Texas decided to cancel the contract 15 months early, but continued to do business with Evercare because the problems in Dallas-Fort Worth weren’t affecting services it was providing elsewhere."
"In Illinois, Medicaid Deputy Administrator Jim Parker said his office was unable to cut ties with Harmony Health Plan, a subsidiary of WellCare Health Plans, and Family Health Network, a nonprofit community plan, even though they had serious quality problems over a decade.
"'Their performance was abysmal,' Parker said, noting that their quality rankings were in the low percentiles.
"Parker said one reason the state kept awarding them contracts was that they agreed to participate in a program in several counties in which members enrolled voluntarily and weren’t required to join. Most companies weren’t interested in that business because there wasn’t a guaranteed number of patients.
"The other reason was more complex.
"'Managed care can be a big political issue at the state level,' Parker said. 'You had a divide in Illinois. Republicans in the legislature were pushing the state to go to more managed care. In light of that, it was not politically feasible to get rid of the existing plans. They were around for political reasons.'"
"CareSource, a Dayton, Ohio-based nonprofit Medicaid plan, agreed in 2011 to pay the federal government and the state $26 million to settle civil fraud allegations that it failed to provide screenings and other services for adults and children with special needs and submitted false data to the state. The company denied the allegations, but said it settled to bring the matter to a close.
"CareSource spokeswoman Jenny Michael said the company had no comment.
"Ohio Medicaid spokesman Sam Rossi wrote in an email that the settlement 'did not include any actual finding of wrongdoing, and there was never an allegation of consumer harm.' He said CareSource has taken steps in recent years 'to better document the services it provides.'
"CareSource remains Ohio’s largest Medicaid managed care plan."
Health plans operating in multiple states
"Another plan that faced fraud allegations was Amerigroup Corp. of Virginia Beach, a national managed care company that currently operates in 12 states. It agreed in 2008 to pay $225 million to the federal government and Illinois to settle a civil case that alleged it had defrauded the state’s Medicaid program because it avoided enrolling pregnant women and unhealthy patients and submitted thousands of false claims to the government. The company did not admit any wrongdoing.
"Amerigroup, which was purchased by WellPoint in late 2012, had already left Illinois when its contract expired two years before the settlement. The other states did not rescind their contracts."
"Health care fraud experts said they couldn’t think of a single case in recent years in which a plan had been dropped because it was the subject of a Medicaid fraud probe." [emphasis added]
"Florida health officials continued to contract with WellCare after FBI agents raided the national managed care company’s Tampa headquarters in 2007. That eventually led to criminal charges, and earlier this year, several former WellCare top executives were convicted in a scheme to defraud Florida’s Medicaid and Healthy Kids programs by falsely inflating the amount it spent on care.
"In 2009, WellCare signed a 'deferred prosecution agreement' with the U.S. Attorney’s Office, agreeing to pay $80 million to resolve potential criminal charges in the fraud case. Last year, the company finalized a $137 million settlement to resolve civil fraud allegations. It did not admit wrongdoing in the civil case.
"In February, Florida officials allowed the company to expand its Medicaid services to all 67 counties. Today, WellCare, which has 1.8 million Medicaid members in eight states, is the largest Medicaid managed care plan in Florida."
FYI: Michigan Medicaid Managed Care Health Plans