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Medicaid managed care under fire at 1-year mark

LILBURN - Taking the kids to the dentist is a big undertaking for Nia Compres. The Lawrenceville woman has four sons she has to take out of school to get their teeth cleaned and checked.

Last week, she found a dentist with an office large enough to handle all four at once, and it's much closer than her old dentist in Buford. But their first appointment at the Kool Smiles office in Lilburn could end up being their last.

The Atlanta-based dental chain, which has 10 offices in Georgia, is being terminated from the networks of two of the three HMO-like insurance companies that run Georgia's Medicaid and PeachCare programs.

Compres said if that happens, she might not be able to find another dentist she can afford.

"People need a place like this," she said. "Not a lot of places accept PeachCare, and when they do, they only accept a limited amount of patients. Somebody's going to miss out."

Compres' worries are at the heart of a class-action lawsuit filed in federal court last week by about a dozen parents whose children are patients at Kool Smiles.

Officials with the chain say the decisions by WellCare of Georgia and Peach State Health Plan to boot them out of their provider networks at the end of this month threaten to leave 71,000 Georgia children without a dentist.

But the Kool Smiles case is only the latest complaint surrounding the state's decision to bring the fiscal discipline of managed care to bear upon about 950,000 Medicaid and PeachCare enrollees.

Representatives of hospitals, doctors and other health care providers say increased paperwork and reduced payments are threatening their bottom lines, forcing some to stop accepting Medicaid patients and others to close up altogether.

Patient advocates say the resulting decline in providers willing or able to participate in the program is preventing patients from getting the care they need.

"(Kool Smiles is) the tip of the iceberg," said Heidi Moore of Alpharetta, a leading advocate for children with disabilities and mother of a 7-year-old boy with Down syndrome. "Access to care for children in this state is diminishing rapidly."

Savings achieved

From one standpoint, the initiative has been an unqualified success as it marks its first anniversary later this week.

When Gov. Sonny Perdue announced that he wanted to convert Georgia Medicaid from fee for service to managed care, he pointed to a program that was taking up an ever larger share of the state budget, with annual spending increases far outstripping the rate of inflation.

Now, the state is actually saving money from the program, $78 million during the last fiscal year.

"We immediately stopped the escalating costs," said David Bear, spokesman for Peach State Health Plan. "None of us want to talk about money, but it's a reality."

Those complaining loudest about the initiative don't argue that the savings are real.

But they say the three companies the state thus far has paid $2.3 billion to run the program - also including Amerigroup - are cutting corners in negative ways that weren't what they promised.

State political and health policy leaders from Perdue on down pitched the initiative as not only a cost-cutting move but a way to improve the quality of health care by providing Medicaid patients with a permanent primary-care doctor.

Having a medical home would keep them out of emergency rooms, where caring for them is both more expensive and - by its nature - lacks continuity.

"We have seen absolutely no evidence that this is happening," said Temple Sellers, general counsel for the Georgia Hospital Association.

Instead, Sellers said, the three "care management organizations" are falling back on the same old time-tested methods commercial HMOs use to keep costs down.

"The CMOs are saving money by denying access to patients and reducing payments to providers," she said.

Other strategies

Kathy Driggers, chief of managed care and quality for the Georgia Department of Community Health, said the state never promised that the medical-home concept would be the only strategy the CMOs would employ to meet their cost-cutting goals.

She said the companies have worked hard to cut down on authorizing services that are not "medically necessary." So-called "utilization" costs have long been a major factor behind the growth in Medicaid spending.

"That's what we're paying them to do," she said. "Providers hate that. They don't like the 'mother, may I.'"

Driggers said the consequences of the tighter restrictions on coverage the CMOs are enforcing has caused some providers to lose income.

Losing money is one thing. Shutting down services because Medicaid reimbursements are too low to keep providing them is another.

Jimmy Lewis, CEO of HomeTown Health Care, which represents rural hospitals, said only two of 35 "critical-access" hospitals in the state are still delivering babies.

"Most rural hospitals would drop every Medicaid service if they could," he said. "But the law won't let them."

Tom Meadows, CEO of Miller County Hospital in Colquitt, said he was forced to close an outpatient health clinic the hospital was operating in Blakely because the CMOs were reimbursing only $41 for every $100 patient visit.

The clinic was averaging 56 patients a day.

"There's not a local business anywhere that could continue to operate at that much less than cost," he said.

Lewis said the result of such closures is increasing the patient load in emergency rooms instead of reducing it, as the initiative promised.

Driggers concedes that trying to get Medicaid patients to stop using hospital emergency rooms for primary care remains a sticky challenge.

She said all three CMOs are working on it, using various strategies.

Losing access

In other instances, like Kool Smiles, providers are being forced out of the CMOs' networks rather than leaving voluntarily.

Tu Tran, co-founder and owner of the dental chain, said terminating such a large provider from two of the three networks can't help but restrict access to dental care in a state where 80 percent of the dentists don't accept Medicaid or PeachCare.

The other 20 percent simply couldn't take all of the patients who suddenly would be left in the lurch, he said.

"We've done the research," he said. "If every dentist currently accepting Medicaid patients doubled the number of Medicaid patients they saw, we'd still have 50,000 without a dentist."

Before Kool Smiles received its termination notices, the focus of the complaints against the initiative centered largely on speech, physical and occupational therapy services for children.

Many therapists were reporting problems gaining prior authorizations to treat patients, a situation aggravated by more burdensome paperwork requirements.

Lauren Waits, policy director for the advocacy group Voices for Georgia's Children, said making sure the CMOs are providing adequate coverage for the children enrolled in the program has been more of a concern for her than the supply of providers.

"We're interested in making sure kids have access to the coverage their plans promise them," she said.

Indeed, the prior authorizations issue has drawn the only fine the state has levied since the managed-care initiative began.

Last month, Peach State Health Plan was fined $3.7 million for failing to meet its contractual obligations to provide timely prior authorizations for medical services.

Hearings set

That episode and the Kool Smiles case have drawn the attention of Georgia lawmakers, who will be holding two days of hearings this week to check up on the program at the end of its first year.

House and Senate budget subcommittees will hear testimony from state health officials, representatives of the CMOs and the public.

"Conceptually, managed-care companies can keep costs under control with preventive programs and giving people a medical home," said Rep. Mickey Channell, R-Greensboro, chairman of the House budget subcommittee with jurisdiction over health spending.

"We want to find out how well they're doing that versus access now and when we had fee for service."

While the one-year anniversary marks a convenient time to look at the program, Driggers warns that it's too early following such a major change in direction for definitive answers.

"It is too early to be able to say whether we've improved the health care outcomes of our members," she said. "It takes two to three years or longer."