Is Medicaid Managed Care a Fraud?

The recently released report from the Department of Health and Human Services’ Office of the Inspector General (OIG) entitled “Access to Care: Provider Availability in Medicaid Managed Care” raised some serious issues about the fraudulent tactics many of these plans use to support state funding of their activities.
The OIG’s summary of their study to assess availability of Medicaid managed care providers indicated that:

“… slightly more than half of providers could not offer appointments to enrollees. Notably, 35 percent could not be found at the location listed by the plan, and another 8 percent were at the location but said that they were not participating in the plan. An additional 8 percent were not accepting new patients. Among the providers who offered appointments, the median wait time was 2 weeks. However, over a quarter had wait times of more than 1 month, and 10 percent had wait times longer than 2 months. Finally, primary care providers were less likely to offer an appointment than specialists; however, specialists tended to have longer wait times.”

This report goes on to note that federal regulations require states to have standards for timely access to care that all Medicaid managed care organizations (MCOs) must meet to ensure each MCO maintains a network of providers that is sufficient to provide adequate access to Medicaid services covered under the contract between the state and the MCO, with due consideration for:
  • The anticipated Medicaid enrollment
  • The expected utilization of services
  • The numbers and types of providers needed
  • The numbers of network providers who are not accepting new Medicaid patients, and
  • The locations of providers and Medicaid enrollees
Most states have adopted at least one of the following three standards for access to care:
  • Standards that limit the distance or amount of time enrollees should have to travel to see a provider
  • Standards that require appointments be provided within a certain timeframe, and
  • Standards that require a minimum number of providers in relation to the number of enrollees
Unfortunately, not many states “seek to reliably measure whether plans comply with access standards or commonly include calls to providers.” Nonetheless, to access state capitation payments, Medicaid managed care plans routinely declare that they meet these access standards. Based on the OIG report, it would appear that many of these declarations are false, and thus fraudulent.
Why don’t states make stronger efforts to ensure access to care compliance by MCOs, especially now that Medicaid enrollment is growing under Obamacare? The answer may be that for many, state funding for their Medicaid program is insufficient to enable the MCOs to meet these standards. Rather than acknowledging this shortfall and contributing more budget dollars to support the program — or acknowledging the failures of a program that legislators would like to believe can meet the health needs of their poorer citizens on a shoestring — it is better to turn a blind eye to the problem. In addition, Medicaid managed care is big business, and some of these plans use campaign contributions to wield a lot of clout in state governments, and thus, with state regulators.
Why is timely access to primary and specialty care important for Medicaid enrollees and for Medicaid programs themselves? In the long run, it is likely that timely access saves taxpayers’ money, reduces unnecessary suffering and death, improves health and provides long-term economic benefits to enrollees and to communities. However, if you are a Medicaid managed care plan and you experience a fair amount of enrollee turnover (which is common in the Medicaid program), investing in the long-term health of your enrollees is not so good for the short-term bottom line. If Medicaid patients can’t get in to see their assigned primary care provider, or a specialist, guess where they go: yep, they go to the emergency department, where they will get the care they need even if the plan retroactively denies or inappropriately reduces payment. Thus, the ED is the real safety net for this tattered safety net, and hospitals and emergency care providers are the underappreciated, and occasionally vilified, fingers in this leaky dike.
The sad thing is that some (mostly not-for-profit) MCOs do a good job ensuring access, but Wall Street is backing a different set of horses. The OIG’s report calls on CMS to put pressure on the states to improve oversight and assessment of MCO compliance with access to care standards, but really, many of the same disincentives to raising this bar apply equally to federal regulators and to Congress.
This post originally appeared at The Fickle Finger on Dec. 15, 2014.

[Image credit: "I'm not a liar!" by Tristan Schmurr licensed under CC BY 2.0]