Springfield hospitals say they are being denied full payment from Medicaid to save patients going through drug overdoses and life-threatening infections.
Hospital officials who want to see more regulation of the companies carrying out Illinois’ latest reboot of Medicaid managed care say their hospitals also are being forced by the companies’ policies to keep patients as inpatients longer rather than discharging them to nursing homes.
Officials from Memorial Medical Center and HSHS St. John’s Hospital said the administrative and financial headaches result in Medicaid payment delays involving millions of dollars for months at a time and sometimes interfere with patient care.
The difficulties have resulted in hospitals hiring more office workers to wrangle with the bureaucracy of companies that are part of the managed-care program HealthChoice Illinois, according to Jay Roszhart, vice president of ambulatory networks and clinical integration for Memorial Health System.
“We face increased administrative burdens to get the appropriate level of billing to cover our cost for that patient,” he said.
Both Springfield hospitals support a package of bills backed by the Illinois Health and Hospital Association to improve the managed-care payment system covering 2.1 million Medicaid beneficiaries, or more than two-thirds of the state’s 3.1 million Medicaid population.
But the group representing the state’s six managed-care organizations, or MCOs — the Illinois Association of Medicaid Health Plans — said the denial rate for Medicaid claims is less than 11 percent rather than the 26 percent denial rate quoted by the hospital association.
“We agree the Medicaid program could benefit from more accountability, but providers should not be exempt from this accountability,” said Samantha Olds Frey, executive director of the Medicaid health plans group.
Danny Chun, spokesman for the hospital association, said hospitals include initial denials in the 26 percent denial rate because of resources it can take to secure full or partial payments from MCOs.
Chun said hospitals statewide are seeing initial denial rates that are “unacceptably high,” collectively resulting in “hundreds of millions of dollars” being withheld for medically necessary services that were authorized and provided to Medicaid beneficiaries.
The hospital association says the bills that it favors — which include Senate Bills 1697, 1807 and 1703 and House Bills 2715, 2814 and 2730 — would require a uniform set of rules on documenting medical necessity and would standardize denial codes and other procedures. The bills, which haven’t been voted on, also would create an arbitration process to review and correct “improper” denials by MCOs.
When asked whether Gov. J.B. Pritzker, a Democrat, would support the IHA-backed bills to tweak a managed-care system rebooted in early 2018 under his predecessor, Republican Bruce Rauner, Pritzker spokeswoman Jordan Abudayyeh wouldn’t answer directly.
“The governor believes health care is a right, not a privilege,” she said. “Protecting that right means ensuring that the state’s Medicaid system provides high-quality care for the more than 3 million recipients across the state. The governor is committed to bringing stakeholders together to assess the challenges and opportunities in the managed-care program and design solutions together.”
Memorial Health System’s initial denial rate is 21 percent from Medicaid managed care, which is still “incredibly high,” Roszhart said.
“Every one of these denials we could spend six to nine months fighting to try to get them overturned,” he said. “It is not a quick and easy, cut and dry scenario.”
Memorial Health System is fighting with MCOs over at least $10 million in Medicaid payments, Roszhart said.
At 500-bed Memorial Medical Center, where 18 percent to 19 percent of all patients are covered by Medicaid, the hospital was denied thousands of dollars in inpatient charges after caring for a drug-overdose patient for seven or eight days, including care in an intensive-care unit, Roszhart said.
The Medicaid patient’s MCO ruled inexplicably the patient needed only an outpatient, “observational” level of care and the related lower payment level, typically half of the inpatient rate, Roszhart said.
Another patient’s MCO gave Memorial an outpatient payment rate for five days of inpatient care for sepsis and treatment for bedsores after the patient was admitted from a nursing home, he said.
Memorial is still trying to get full payment for both patients’ care, he said.
St. John’s, a 415-bed hospital where more than 25 percent of all patients have Medicaid coverage, has experienced delays in MCOs agreeing to pay for nursing home care, behavioral-health services and pain control services for patients after discharge, said Dan Hoodin, vice president of managed care for Hospital Sisters Health System.
The delays have resulted in patients staying longer than necessary in the hospital and not receiving services in the most appropriate setting, he said.
Roszhart said he suspects MCOs are delaying those approvals to save money by potentially avoiding Medicaid payments to a nursing home or other provider. Under the current system, hospitals generally aren’t paid more by Medicaid for a longer stay, he said.
The refusal by some MCOs to pay for mental-health counseling in schools has resulted in Memorial Health System’s school-based counselors sometimes declining services for Medicaid-covered students, he said.
Those refusals didn’t take place before the Medicaid managed-care reboot, Roszhart said.
“We’re not going to necessarily turn a child away who’s in a mental-health crisis,” he said. “But for more routine care, it may mean that we’re not able to provide it.”
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March 15, 2019 at 12:16AM