Reimbursement News

Providers in Iowa Face Medicaid Claims Reimbursement Delays

Following the implementation of the Medicaid managed care program, some providers in Iowa have experienced significant claims reimbursement delays and more denials.

By Jacqueline LaPointe

- After privatizing the Medicaid program in April, some healthcare providers in Iowa have experienced serious delays in Medicaid claims reimbursement that have caused some organizations to consider shutting their business doors.

Providers experience claims reimbursement delays after Iowa privatizes Medicaid

According to Chelsea Keenan of TheGazette.com, some managed care companies — which took over the oversight of 560,000 Medicaid clients — have issued delayed, missing, or incorrect Medicaid claims payments, especially for home health providers.

The union that represents the Consumer Directed Attendant Care program, which employs in-home caregivers, stated that several providers have reported issues with Medicaid payments, including resubmission of claims paperwork several times without resolution, reimbursements being sent to incorrect or outdated addresses, and challenges with contacting the managed care companies.

Additionally, a DesMoinesRegister.com report indicated that some healthcare agencies have also seen an increase in claims denials for “trivial or unclear reasons.”

“We’re getting denials that we have no idea what they mean,” Tami Lichtenberg, Executive Director of Iowa River Hospice, told the news source.

The Iowa River Hospice has reported that it is almost $50,000 short because of the recent uptick in Medicaid claims denials and Litchenberg has applied for a line of credit to keep the business open.

“It’s getting to a crisis situation where some smaller agencies are probably going to have to close their doors,” said Starla Elseberry, a board member of Disability Rights Iowa, at a local meeting.

An agency that provides care for individuals with intellectual disabilities or mental illnesses also told the news source that the managed care companies do not reimburse as much as the state-run Medicaid program, which has created financial burdens for smaller facilities.

For example, Amerihealth, one of the managed care organizations, has paid the agency $130 per day to treat a patient with severe mental illness, whereas the state reimbursed $320 per day for the same patient.

The reduced payment rates have caused the agency to stop taking on medically complex patients under Medicaid managed care. Some employees have also quit citing delayed payments and frustration with the situation.

The report explained that claims reimbursement issues could spell trouble for the state’s healthcare system, which relies on home health providers to help some patients transition and stay out of expensive institutions, especially for preventable hospitalizations.

Healthcare agencies that shutdown as a result could also affect more than just Medicaid beneficiaries losing healthcare services, stated the report.

In response, Iowa’s Department of Human Services explained that managed care companies are working on resolving medical billing issues. The companies have also offered training to help providers understand the new billing systems.

The department has already processed 4.6 million clean claims since April and the average processing time is 8.5 days, reported the article. However, the department has not released data on claims denials.

“CDAC [Consumer Directed Attendant Care program] providers are a very important component of offering waiver services and [are] allowing more Iowans to stay in their homes instead of living at a facility, and we are committed to supporting them as they work to file timely, accurate claims — including the member’s signature of approval — with the new health plans,” said Amy McCoy, spokeswomen for the Department of Human Services.

“The health plans expect CDAC payments to normalize this month.”

Other states have experienced similar consequences following the privatization of their Medicaid programs, including Ohio, Kentucky, Kansas, and Illinois.

For example, some home health providers in Ohio reported in 2014 that reimbursement delays caused providers to go months without pay, agencies were forced to take out loans to stay open, and patients were left without caregivers. The transition to Medicaid managed care was especially disruptive for dual eligible beneficiaries, according to an study in the American Journal of Managed Care (AJMC).

After Ohio’s challenges were reported, Kentucky’s Medicaid Commissioner Lawrence Kissner, who took the position after the state’s 2011 transition, told the AJMC that payment delays were common in the months following the implementation of managed care, but the situation would improve over time.

Additionally, CMS finalized a rule in April that would update Medicaid managed care reimbursement policies to better align the program with other health insurance affordability programs. The program’s new regulations, which have not been updated since 2003, are being phased in over the next two years.

CMS designed the rule to better reflect the growing role of managed care in state Medicaid programs, especially as more states have recently chosen to adopt the system.

Dig Deeper:

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8 Tips for Avoiding Denials, Improving Claims Reimbursement