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Medicaid HMO fined $3.7 million

ATLANTA - The state has slapped a fine of $3.7 million on one of three companies hired last year to run Georgia's Medicaid managed care program.

An audit by the Department of Community Health found that Peach State Health Plan failed to meet its contractual obligations to provide timely "prior authorizations" for medical services, agency spokeswoman Amanda Seals said Monday.

Seals said the fine was the first the DCH has imposed on any of the HMO-like companies the state is paying $3 billion to oversee Medicaid coverage for 1.2 million low-income adults and children.

"The department went back to make sure that no patients were harmed by the delays," she said. "That was very important for the department to find out."

Gov. Sonny Perdue brought managed care to Georgia's Medicaid program last year in an attempt to slow rising costs that were far outstripping the rate of inflation.

The goal was to improve the quality of health care for Medicaid enrollees by steering them toward permanent primary care doctors while saving money by keeping them from seeking routine care in costly emergency rooms.

But soon after the initiative was launched, doctors and hospitals began complaining that the companies were adding an extra layer of bureaucracy that was delaying both delivery of care and payment for services.

Seals said the DCH audited Peach State Health Plan and the other two managed care companies last winter to determine whether they were handling requests for prior authorization within 14 days, as required by their contracts with the state.

The audit found that Peach State was only meeting the standard in 75 percent of cases, a "less than satisfactory" rating that prompted the fine.

Seals said Peach State is appealing the penalty.

Sandy McBride, spokeswoman for Peach State's St. Louis-based parent company, Centene Corp., did not return phone calls Monday.

Atlanta-based consumer health advocate Linda Lowe said complaints from patients enrolled in the program and their doctors haven't been limited to delays in obtaining prior authorizations.

She said Medicaid patients also have been plagued by denials of "medically necessary" care and inadequate provider networks.

Last week, a member of the DCH's governing board, Mark Oshnock, asked the board's managed care subcommittee to conduct a review of the program, which is nearing its first anniversary.

Lowe welcomed that news, along with word that interested providers and patient advocates will be doing an external evaluation at the same time.

"It needs to be seriously looked at," Lowe said. "We've had enough time now that start-up glitches are not an excuse."

But Seals said DCH officials still are convinced that managed care is the right direction for the state to be moving with Georgia's Medicaid population.

"We feel they're doing a better job of improving health outcomes and at the same time getting better value for the state," she said.