Medicaid
payments fall
months behindSeveral factors combine to keep
millions from flowing to providers
Millions of dollars in outstanding bills for the treatment and care of some the state's most vulnerable Medicaid recipients are now being paid after care providers complained for months about not being reimbursed.
The providers were not paid for a variety of medical and ancillary services rendered through the Medicaid program for blind, disabled and aged patients. The program serves about 37,000 people.
Payment delays began soon after a new company, ACS State Healthcare, took over in October as fiscal intermediary for Medicaid claims. For the previous 30 years, Hawaii Medical Service Association held the contract.
Some providers say they are still owed millions of dollars for billings that date as far back as November, even though the state is up to date with current payments. Providers found that claims submitted for payment to a new automated processing system were being rejected. The automated system replaced a decades-old method of manual processing.
The state Department of Human Services, which has oversight for the program, says it is working with providers to settle all outstanding claims.
But when department Director Lillian Kohler looked into the problem after taking over the job in January, payments were already several months behind, she said.
"I found no one had been paid in about four months," she said.
After authorizing some payments to providers to tide them over, Kohler said the biggest challenge is reconciling the differences.
Kohler is hoping by May 30 providers will be able to come up with a final reckoning of what they are owed.
While large health care providers such as The Queen's Medical Center, which says it is owed about $2 million, have been stung by the delays, smaller health care and allied service providers are really struggling, said Rose Ann Poyzer, vice president for the Home Care and Hospice division of the Healthcare Association of Hawaii.
Poyzer represents 13 federally certified home health care agencies statewide, plus a number of private-duty nursing agencies as well.
"My providers are owed at least $1.5 million, by now probably closer to $2 million," she said. "Many have had to borrow money just to meet payroll. Some have literally mortgaged their homes in order to get a loan."
Poyzer said ACS has been working hard to catch up and is communicating with providers about the delays. But she says the major problem remains getting paid for services rendered during the few months following the ACS takeover of the contract.
Likewise, Queen's said it is being paid for current billings but is still waiting to be paid for some services that date back several months.
"(ACS seems) to still be struggling with those November, December and January claims," said Patricia Syling, director of the hospital's business office.
Syling said ACS has acknowledged it had problems in the transition period. One problem the company said it had encountered when it first took over related to obtaining necessary information from the state, Syling said.
"They said that it had to do with the state not having certain criteria in place for them," she said.
The jointly funded state-federal Medicaid plan is a collection of programs designed to serve different populations' needs. The service providers are also reimbursed in different ways.
For example, the so-called "waiver" program uses federal funding to provide nursing home services in a patient's home. Medical providers such as hospitals and doctors are reimbursed by Medicaid on a fee-for-service basis. Medicaid also covers items such as medical equipment, transportation, medications.
But by far, the majority of the state's Medicaid population is covered under the managed-care Quest program, which is administered directly by insurers such as Aloha Care, Kaiser Permanente and HMSA. The Quest program is unaffected by the billing problems.
Last year, the state changed the way the Medicaid contract was structured and made an agreement with the state of Arizona to use its Medicaid claims system. It chose Dallas-based Affiliated Computer Services to become the fiscal intermediary after HMSA decided not to submit a bid. The company then set up ACS State Healthcare to handle its Hawaii Medicaid contract.
ACS has Medicaid contracts in 15 states. But with the exception of Florida and Hawaii, ACS handles the entire process in all its other locations.
"Here we only do the front end and the back end. It's Arizona's Medicaid system," said Sharon Foster, Hawaii Account Manager for ACS.
State Human Services Director Kohler believes that segmentation in the system is part of the problem.
"Here they are in the same situation just like they are in Florida where they are handicapped in very serious ways," Kohler said.
Another part of the problem for ACS was learning from the state what it needed to do, Kohler said, as was educating service providers on the new system.
"People were comfortable with the old system but everything was brand new. Everyone had new ID numbers, procedure codes, server codes. At first the providers would call the ACS call center and wait two hours and then finally be told they could only resolve a few claims at a time. People weren't trained," Kohler said.
ACS now has an individual dedicated to resolving provider issues and back claims. There are also provider workshops on the new system being held on all islands.
But Foster said providers who need help with the system or believe they have outstanding claims need to call ACS to get those claims resolved.
"People need to come to us and we can process their backlogs," Foster said.
For the moment, many of the automatic claims editing features which caused so many of the rejections and problems for the smaller providers have been turned off, she said.
But over the next few weeks, that will change, as they are incrementally turned back on.
"We can't keep it suspended forever," Kohler said.
Nevertheless, the smaller service providers worry the same problems will re-occur and claims will get backed up again if the full system is re-activated and all the bugs aren't worked out.
Providers also hope the state will compensate them in some way to compensate for the months of non-payment. Kohler said she's also looking into that.
But new Medicaid reimbursement rates later this year, plus a new federal privacy law, will add more variables for the system to cope with.