The state needs to recover $200 million in double payments to Medicaid providers to balance the budget – money it has been sending out for the past year while work continues to fix a billing system that hasn’t worked right since the day it was installed.
Rebecca Wyke, the governor’s finance commissioner, said the number is closer to $341 million, but the $200 million is needed to balance the books for this fiscal year, which ends June 30. Recovery efforts will continue into fiscal year 2007.
The money represents actual bills paid on top of the estimated payments the state sent out to providers when the computer was processing no claims. It includes both state and federal money.
Asked about her confidence level that the $200 million will be collected in time, Wyke said, for the first half, or $100 million, the chances are very good.
“The confidence level to get to $200 million is going to be week by week,” Wyke said.
If the goal isn’t met, the state can essentially borrow from Medicaid money budgeted for 2007 as long as the numbers balance out over two years, she said.
What that will do to the state’s cash flow, or cash in hand to pay its Medicaid bills, is unclear. In a presentation to the Legislature’s Appropriation’s Committee last month, the administration warned it could run out of money by April 1.
The Department of Health and Human Services sent out a letter last week to all Medicaid providers alerting them it will limit the amount of bills it pays each week to $40 million, or $3 million less than the average.
The letter says: “The reality we face is this: the double payments of interims and claims now amounts to hundreds of millions of dollars. This threatens the ability to meet our future financial responsibilities to the provider community.”
One health care provider called the letter “idiotic” saying it did nothing but alarm those who take care of Medicaid patients.
Sen. Richard Rosen, R-Hancock County, a member of the Health and Human Services Committee, said his concern is legislators have no way of knowing what the department really owes for Medicaid services or whether it will be able to balance its budget.
He also questions the practice of essentially borrowing from the 2007 budget to balance 2006.
“I don’t think it satisfies the constitutional requirement imposed on the Legislature to balance the budget each fiscal year,” Rosen said.
Rep. Darlene Curley, R-Scarborough, who is on the Appropriations Committee, said the money owed back is a “potential budget-buster.” She has asked for weekly updates on the amount being collected.
Intentional double-payments
The double-payments are a result of the ongoing efforts of the Department of Health and Human Services to fix a Medicaid billing system that was installed in January of 2005 and was incapable of processing claims for six months. In some cases it still isn’t working right, although the state says it is now processing 85 percent of the bills submitted.
To keep the state’s more than 7,000 Medicaid providers -from nursing homes to physicians – whole, the state started sending out so-called interim payments or estimates based on what was billed the previous year.
Now that the system is finally processing many of the claims, providers are getting their bills paid on top of the interim payments. The state decided to pay the bills through the system in order to have an accurate accounting of what services had been provided.
To date, $480 million in interim payments have been sent out, and some are still being made to providers whose bills, because of the intricate coding the new billing system requires, aren’t processing.
Wyke said of that number, which is growing every day, $341 million is estimated to be a double-payment and $200 million is targeted for collection this year. The exact amount, however, is unclear.
“It doesn’t become an overpayment until the system starts working,” and pays the actual bill, Wyke said, and there may be mitigating circumstances, including providers that stopped submitting bills until the system is fixed or those that have been paid for some, but not for others.
Providers concerned
The biggest recipients of Medicaid in the state are nursing homes, because almost all of their patients are eligible for the government subsidy.
Nursing homes are cooperating and sending money back, said Richard Erb of the Maine Health Care Association, which represents long-term care facilities, but are not willing to send all the money back until all their claims are processed.
“They have received interim payments and, in many cases, have been overpaid through the interim payment system, but in many cases there is still a significant number of unpaid claims as well,” Erb said.
“It’s almost universal that providers are owed payment on some very old claims,” Erb said, some dating back to January of last year.
Mary Lou Dyer, director of the Maine Association for Community Providers, represents those who provide services for the mentally retarded. The state was having so much trouble with the coding in their bills, they were intentionally pulled out of the system from the end of August until the beginning of this January.
“We’re still not having our claims processed reliably or paid reliably and our folks are not willing to think about a repayment,” Dyer said. “We’ve still got people going into their line of credit,” to pay the bills.
“We’re still getting a huge number of (claim) rejections,” she said, adding the Department of Health and Human Services “just informed us they just corrected 1,000 codes for MR” in the computer system.
Gordon Smith of the Maine Medical Association, representing many of the state’s physicians, has little confidence the state will be able to collect what it says it is owed by June 30 because there are still so many billing problems.
He gave an example of those bills submitted for so-called dual-eligible patients – qualifying for both Medicaid and Medicare.
“They’re not even going to be paid until the next fiscal year,” Smith said, unless providers “stop billing electronically and put them on paper.”
While physicians he represents get a small fraction of what’s spent on Medicaid in the state, some practices have “just had it,” Smith said. That situation was made worse last week by the “idiotic letter saying ‘now were going to limit the payments each week.'”
“It’s not the providers’ fault that the state has under-funded the Medicaid program,” Smith said. “Now they’re holding us hostage, saying ‘you’ve been paid twice.’ They need to fix the machine. Then they’ll have credibility to go back to the providers. (Until that happens) Would you give it back? I wouldn’t and neither would the providers.”
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