Aug 23, 2010

HMOs dispute $34M in state fines

The Florida Agency for Health Care Administration says the state's Medicaid HMOs owe $34 million in fines in a long-running dispute about enrolling newborns in health plans. The HMOs say the fines are unfair.

AHCA audits covering mid-2004 through 2007 found HMOs did not always follow requirements to enroll babies in their mothers' health plans soon after birth. That led the state to pay more for the infants' care than it would if they had been properly enrolled.

The agency is trying to hit HMOs with fines of $2,500 for each child not properly added to a health plan, but collection has been delayed by appeals. AHCA does not allege that the HMOs committed fraud but says they did not comply with requirements of their Medicaid contracts.

HMOs face fines in cases where they could not show they had submitted a form to start the process of enrolling newborns, agency spokeswoman Tiffany Vause said in an e-mail response to questions.

But Michael Garner, president of the Florida Association of Health Plans, said the industry complied with the requirements more than 90 percent of the time and that many plans were "almost perfect." He said HMOs disagree with the way the agency has interpreted contracts and considered documents that the plans provided.

"There's no malfeasance,'' Garner said. "No one is trying to hurt the state. No one is trying to hurt the health plans.''

The largest chunk of the potential fines, $20.9 million, would be imposed on two HMOs run by WellCare Health Plans, according to AHCA. This appears to be unrelated to repayments WellCare made last year following a federal investigation into charges of Medicaid fraud.

The second-largest amount, about $6 million, would be imposed on Amerigroup.

Other HMOs with smaller potential fines are Humana, UnitedHealthcare, Vista, Citrus Health Care, JMH Health Plan, Preferred Medical Plan, Universal Health Care and Total Health Choice. Healthy Palm Beaches has paid a $90,000 fine.

Amerigroup addressed the issue in a filing last week with the Securities and Exchange Commission. Amerigroup said the state Medicaid program rejected an appeal May 26, but the company will continue to oppose the fines.

"We are evaluating our appeal rights and believe that Amerigroup Florida has substantial defenses to the claims asserted by AHCA and will defend against the imposition of the claims vigorously,'' the filing said.

Company spokeswoman Tara Wall later issued a statement saying Amerigroup believes it has complied with enrollment requirements. (T)here are clear differences with the interpretation of the contract between Amerigroup and AHCA,'' Wall said. "We submitted documentation which we believe complies with our interpretation of the contract. ACHA disagreed and we are working to resolve the matter."

The disputes center on the "unborn activation process,'' which health plans are required to use. It involves notifying the state when an HMO member is pregnant and again when a baby is born, allowing for quick enrollment in the mother's health plan.

Along with speeding up enrollment, the requirement that HMOs follow the activation process also could help prevent abuses such as health plans trying to avoid covering newborns who have high-cost medical conditions.

AHCA alleges that HMOs could not show they complied with the process in thousands of cases during the more than three-year audit period.

"Bottom line, they're required to do it, they haven't been doing it, so they're getting fined,'' said Karen Woodall, a lobbyist who has long worked on children's health issues and has been critical of Medicaid HMOs. In the Amerigroup case, for example, AHCA is seeking to impose the $2,500 fines for 2,427 children. The agency said it paid $6.9 million in "fee for service" payments to hospitals and doctors and other providers, which is about $3.2 million more than would have gone to Amerigroup if the children had been properly enrolled. By Jim Saunders, Health News Florida