Medicaid payment woes impact clients, providers

WASILLA — Judy Edwards faces a quality of life issue whenever she loads her son into the family car.

Her adopted son Eric, 7, has cerebral palsy and relies on his wheelchair to get around, so Judy bought a minivan big enough to fit the chair. Now she’s looking to have an automated device installed to hold Eric’s chair in place while the car is in motion. Unlike the current device that holds Eric’s chair in place, the automatic device she wants — an EZLock — would require less work to secure Eric’s chair. It would also fit her minivan, unlike a ramp, which requires a conversion van.

Medicaid is a federal program administered by the states, including Alaska, that provides health care for low-income individuals and families. However, several specialty programs known as waivers cover cases of exceptional need like Eric.

Judy, Eric’s only caregiver after her husband’s death, faces a difficult dilemma

“The waiver system will help you buy a lift, but then you have to buy a full-sized van,” she said. “Most people try to buy a minivan. The EZLock would help me. It would hold him I wouldn’t have to do as much bending over to make him secure.”

The system would prevent potential injury to Eric as well as Judy.

“For one thing, it’s safer for Eric if he could have it,” she said. “I’m also not a young mom. I have the possibility of hurting my back. Yes, it does impact our quality of life.”

The waiver program had given a prior approval, and everything was set, until this month, when Judy contacted the shop she was hoping would install the device and was told that because she was a Medicaid client, the provider could no longer afford to serve her.

“They said ‘We can’t get it done because Medicaid doesn’t pay,’” she said.

So Judy called an Anchorage business that provides the same service, and received the same answer.

Persistent computer errors

For several people familiar with Alaska’s Medicaid woes, Judy’s story came as no surprise.

They say the cause of the problem lies in a tangle of computer software, contract services, and what the Alaska Department of Health and Social Services has said are broken promises.

The state awarded a contract in 2007 to Affiliated Computer Services Inc., to update its Medicaid software to comply with changes in health care laws. The new system, called the Alaska Medicaid Health Enterprise system, was expected to finish in 2009, but it wasn’t until October 2013, three and a half years after the deadline, that the system went operational, according to widespread reporting and a September study commissioned by the Alaska Association on Developmental Disabilities and the Alaska Mental Health Trust Authority. Xerox acquired Affiliated in 2010.

Health care providers essentially pay for services out of their own pocket, then file a claim for reimbursement with the state. A computer system, in this case, the Enterprise system, tracks the patient, the health care provider, and approves or rejects the claims after it is filed.

However, the new system sometimes rejects legitimate claims, and sometimes doesn’t recognize patients eligible for various services, several people familiar with the system said.

Despite claims that most of the errors had been fixed, the Association study found that more than 500 errors remain in the system. About $561,000 in unpaid claims were filed in June 2014 (the most recent period covered by the study) alone. State officials now say fewer than 150 defects remain.

“One program has between $350,000 and $400,000 in outstanding claims that were denied or pended,” the survey reads in part.

Several businesses were forced to burn through cash reserves while they waited for Medicaid reimbursements that have not come, said Lizette Stiehr, executive director for the Association.

The bottom line for businesses is that a reimbursement rate that normally came in at .96 cents on the dollar has dropped to .74 cents in the months since conversion, according to Stiehr.

“The dollars are huge,” she said. “It’s spooky.”

Providers also face errors that, when corrected, result in other errors, a situation which resembles the classic carnival Midway game Whack-a-Mole, Stiehr said.

“We whack one error program, and additional errors pop up,” she said.

The most persistent error, which basically says that there is a conflict between the procedure and the provider’s listed specialty, was reported 31,059 times between October 2013 and June 2014.

Providers — two of whom, when contacted for the story, said they preferred not to be identified publicly — have mentioned burning through reserve funds, Stiehr said.

Linda Giani is an independent care coordinator, someone who helps people like Judy navigate the patchwork of agencies responsible for helping obtain and pay for the health care that people like Eric are entitled to. She’s reduced her workload to seven clients, since her husband’s job provides enough money for her family to care for her own child, who has special needs, Giani said.

While she’s “mostly retired,” and hasn’t faced problems of her own — the provider for her son is a larger company with better finances — she frequently hears from colleagues about the difficulties with the programs.

She contacted the provider, and was told the same thing that Judy was.

“They told me they could just not afford to do another job without getting paid for jobs they’d done in the past,” she said.

A friend faced similar difficulties.

“She had a lot of trouble getting paid,” she said.

Other states have filed lawsuits — the state has submitted a claim against Xerox for almost $50 million in liquidated damages — and state officials have worked hard to resolve the issue, Stiehr said.

Officials say they are working on the problem, but that’s doesn’t pay the bills, Giani said.

“If you’re the person who’s not getting paid, you don’t want to hear that,” she said. “The money (for the procedures) is there, but for whatever reason, the system is not working.”

Final fix months away

Officials say the system has improved drastically since it went live, but that a final solution may not take place until February 2015. Xerox delivered a corrective action plan this week outlining steps they will take to fix the situation, according to Health Care Services Division Director Margaret Brodie.

“In the last two weeks we have had a lot more success with behavioral health claims,” she said.

The system has paid out $35 million in the last week, improved from $27 million in the previous week, Brodie said. In addition, administrative hearings are scheduled to begin Feb. 17, with follow-up hearings scheduled for August, Brodie said.

Brodie said the waiver programs, dental programs, and some hospital claims remain problematic, but that improvements have been made.

“There are a few waiver providers such as care coordinators who are still an issue, however, we have a work-around process in place for the majority of the waiver providers,” Brodie said. “We are now paying them on a regular basis. We do have some issues with some hospital claims and some dental claims also.”

Xerox spokeswoman Erin Isselman confirmed that the company had submitted a corrective action plan to the state for review, but said details of the plan were confidential.

Contact Brian O’Connor at 352-2269 or brian.oconnor@frontiersman.com.