The Division of Medicaid awarded $1.4 billion dollars in new contracts to its two managed care companies in June, months after an independent report had determined that the companies were failing to deliver on their current contracts.
The 73-page report, commissioned by the Legislature in 2016, found that United Healthcare and Magnolia Health had fallen short on several required performance measures. It also determined that Medicaid had failed to oversee the companies or hold them accountable, even as United and Magnolia continued to defy the rules in their contracts.
The chairs of the Senate and House committees on Appropriations and Medicaid received the report in February, but it was never made public. While some committee members requested the document and received it, others say their requests went unanswered. Mississippi Today obtained the report through other channels, then provided it to several members of the Legislature for comment.
After reviewing the report some legislators said it raised questions, not just about the companies, United and Magnolia, but also about how well Medicaid has managed its own managed care program.
“It’s blatantly obvious that it’s dysfunctional, extraordinarily dysfunctional. It seems to me the managed care companies are doing exactly what they want to do,” said Rep. Steve Holland, D-Plantersville. “It’s time to have a wake up call, and this study is the wake up call we need. But we’ve got to massage it and see where it fits into the public policy perspective.”
Representatives of the Division of Medicaid, however, say they “firmly dispute” the findings of the report, which was produced by independent consultant Navigant.
“The Mississippi Division of Medicaid has extensive quality and performance measures in place for the coordinated care companies participating in MississippiCAN – Magnolia Health and United Healthcare Community Plan. The findings published in Navigant’s report earlier this year were hurried and widely inaccurate. DOM has complete confidence in Magnolia and United Healthcare’s continued dedication to meeting contractual requirements,” the agency wrote in an emailed response to Mississippi Today.
David Mosley, a managing director at Navigant who worked on the report, said, “We stand by the report.”
After completing its report, Navigant sent the findings to four members of the Legislature: Sen. Terry Burton, R-Newton; Senate Appropriations Chairman Buck Clarke, R-Hollandale; Senate Medicaid Chairman Brice Wiggins, R-Pascagoula; and Rep. Greg Snowden, R-Meridian.
Wiggins said the report was not intended to go to the entire Legislature, but if any committee members were denied a copy, it was an oversight.
“It came out right smack dab in the middle of the legislative session. There were a million things going on,” Wiggins said.
“It was always public and no one ever requested it from me. If they had, they would have received it.”
Although the report has largely remained under lock and key, whispers of its findings have mounted in recent weeks in light of a complaint filed against Medicaid by two managed care companies in June. These companies, Amerigroup and a new in-state nonprofit, Mississippi True, have alleged that the agency’s rating system was engineered to favor out-of-state for-profit insurers, such as United and Magnolia. Both of those companies ultimately received new contracts.
In February, Medicaid put out a request for proposals for MississippiCAN, its managed care program. Seven companies including Amerigroup and Mississippi True applied. In addition to Magnolia and United, Medicaid awarded a contract to a newcomer, California-based Molina Healthcare.
In light of Navigant’s findings, which Medicaid received prior to evaluating the proposals, some legislators questioned why United and Magnolia deserved another contract with Medicaid.
In particular, Mississippi True, which was formed by a network of more than 60 Mississippi-based hospitals, has received a great deal of support from legislators, many of whom said they still don’t understand why Medicaid did not give them a contract.
“I think this is something Mississippi True should have gotten. We’re rejecting an in-state nonprofit group in favor of out-of-state, for-profit corporations who can’t deliver,” said Rep. Jay Hughes, D-Oxford. “They’ve had trouble from the beginning, and they’re still having trouble remitting the amounts they should be paying to large hospitals, rural hospitals (for) vital health care for the people on Medicaid.”
Medicaid said that a company’s past performance, good or bad, has no bearing on the contract procurement process, per state rules.
“The companies that bid on the new contracts were graded on the exact same requirements and criteria, based on what was included in their proposals, to ensure a level playing field and objective process,” the Division of Medicaid said in its statement.
On its face, the goal of managed care is simple: reduce health care costs by keeping patients healthy. Unlike a fee for service model, in which Medicaid directly reimburses providers based on the services they provide, Medicaid pays its managed care companies a set rate per patient. The managed care companies then have an incentive to invest in less expensive preventative care, such as well visits and regular health screenings.
Medicaid has said its managed care program has prevented $210 million in additional state spending since it launched in 2011. But some legislators have questioned the accuracy of that number. Although Medicaid enrollment has declined since 2015, costs have continued to rise, according to the Division of Medicaid. In fiscal year 2015, the agency requested $985 million from the state. In 2017, that request hit $1.03 billion.
“It doesn’t do what it aims to do. It has not saved Mississippi taxpayers one red cent,” said Rep. Becky Currie, R-Brookhaven. “This past year, we had 30,000 less people enrolled in Medicaid and we gave them a $50 million deficit appropriation. It doesn’t add up. They just give us voodoo numbers when we ask, ‘What’s going on, why didn’t you take less money this year?’ They don’t really know the answer.”
What is clear, according to the Navigant report, is that patients enrolled in Magnolia’s and United’s managed care programs have not been receiving markedly more preventative care.
Appendix E of the report looked at United and Magnolia’s performance between 2013 and 2015 in 24 health measures required by the MississippiCAN contract. Data was not available from the insurers in more than half of the categories, but where it was available the results were decidedly mixed. United showed improvements in 7 of 13 measures, while Magnolia posted improvements in 6 of 11 measures.
Between 2013 and 2015, the percentage of patients having their body mass index monitored rose 4.19 percent under Magnolia and 5.9 percent under United. The percentage of children receiving lead screenings also rose, as did the percentage of patients receiving nephrology screenings, which measure kidney function, a key metric in diabetics.
But other basic preventative health measures fell during that same time period. Although well-child visits in infants rose 15 percent under Magnolia, they dropped 5.74 percent under United. Childhood immunization rates also dropped under both Magnolia and United, 3.37 percent and 15.09 percent, respectively. In addition, United and Magnolia’s patients received less timely prenatal care and less postpartum care in 2015 than they had two years earlier.
According to Holland, this points to one thing: The managed care companies are not actually managing their patients.
“It’s pretty obvious to me that that commitment to prevention has not been fulfilled,” Holland said. “It’s time for a full scale physical and fiscal review of where we are in managed care. That’s the bottom line.”
Medicaid interpreted the findings differently, arguing that “the data show the companies have made consistent improvements in most areas. Individuals can’t be forced to go to his or her doctor for a check-up, but coordinated care plans are able to incentivize beneficiaries and promote preventive health in ways that fee-for-service Medicaid cannot.”
Hughes argues it’s the company’s responsibility to provide these services. And if they’re not, “then that’s not managed care,” Hughes said.
Navigant also gave United Healthcare low marks on how satisfied health care providers, such as doctors and hospital administrators, were with the insurer. Low provider satisfaction with managed care companies can lead to providers dropping out of the managed care network, which then decreases patients’ access to care.
According to a 2014 survey, which was the most recent made available, only 28 percent of providers who responded said they were satisfied with United. And only 35 percent said they would recommend United to a peer. In contrast, a 2015 survey indicated 63 percent of providers were satisfied with Magnolia and 73 percent would recommend the insurer to their peers.
“I will tell you that most providers in my area do not take Medicaid managed care, and it’s because they can’t get paid. (As a provider) why am I going to do all this paperwork and jump through all these fiery hoops, just to be denied?” Currie said. “And that’s when you have these emergency room increases, because (patients) have nowhere else to go.”
Provider dissatisfaction with the state’s managed care companies has been well-documented recently. In March, Children’s Hospital of Alabama dropped Mississippi’s Medicaid patients, saying the managed care companies had not consistently paid their bills.
Children’s Hospital is not alone. According to the Navigant report, the overall percentage of providers accepting new patients decreased nine percentage points, from 88.4 percent in 2013 to 79.3 percent in 2015. United declined 14.1 percentage points from 2013 to 2015, going from 89.8 percent to 75.7 percent.
United, in particular, has received a large degree of criticism from providers. Two years ago, Forrest General sent a contract termination letter to United, which hospital CEO Evan Dillard blamed on non-payment of bills. Then last fall North Mississippi Medical Center in Tupelo took out a full-page advertisement in a local newspaper accusing the insurance giant of not reimbursing the hospital for services. Both disputes have since been settled.
Mississippi Today provided a copy of the report to United on Thursday, and the Mississippi Association of Health Plans responded on behalf of both United and Magnolia, although they said they are still reviewing the document.
“Both health plans have contracted with the Mississippi Division of Medicaid since 2011, and during their six years of partnership, have implemented a number of programs that have improved the quality of life for the people they serve. This includes quality incentives for physicians and their practices, empowering members to take more ownership of their health care and encouraging better preventative care to reduce the number of emergency room visits,” wrote the Mississippi Association of Health Plans in its statement.
Lack of oversight
Medicaid has vehemently defended both Magnolia and United, arguing that the results were “hurried and widely inaccurate” because the timeline for gathering data was far too short. Navigant contracted with Medicaid to produce its report on Nov. 15, 2016, and Navigant said the agency submitted data over the next 10 weeks.
But this defense only highlights another of the report’s findings, say some legislators —that Medicaid had failed to properly monitor its managed care program or collect data on the companies’ performance.
“If they were consistently tracking this information, they would have had this data,” Hughes said. “It’s an excuse, and it’s a very poor excuse.”
In its report, Navigant found that the Division of Medicaid does not have well-defined standard operating procedures for monitoring and oversight of its managed care program. As a result, the report said, Medicaid staff would likely have a hard time thoroughly reviewing managed care reports and proactively addressing any problems they find, both of which are required by federal Centers for Medicare and Medicaid Services.
Navigant’s report describes a Byzantine system of data collection and review where large volumes of information are easily left unvetted. Medicaid collects 216 reports annually from each of its two managed care companies, but Navigant said they were unable to verify that Medicaid staff was actually able to analyze all of the reports or make changes to the program based on the data in them.
As a result, the Navigant report said, Medicaid was unable to hold United and Magnolia accountable for services they provided to patients and providers. An external quality review of United and Magnolia looked at different measures of performance in 2013 and 2015. Of the 17 measures included in Navigant’s report, the 2013 review showed that Magnolia needed to improve in 12 measures, while United needed improvement in 14. Medicaid responded by creating a corrective action plan to address these issues.
But two years later, the review found the companies’ performance had not gotten better, with Magnolia now needing improvement in 14 areas and United needing improvement in 15.
Wiggins defended the agency and managed care, arguing that “what we were doing before (MississippiCAN) was not working.” But he also acknowledged that Medicaid’s monitoring had fallen short.
“And they need to be doing better with that,” Wiggins said. “They need to be the ones holding managed care companies accountable.”
The report backs this up, saying that Medicaid’s ability to show that it is using data to improve its managed care program “will be critical for MississippiCAN’s continued success.”
Holland agrees, arguing that unless Medicaid starts holding its managed care providers accountable, MississippiCAN will never improve, regardless of which companies get a contract.
“The division of Medicaid itself is a major stakeholder in this,” Holland said. “When they can’t tell you what’s going on, you’ve got the fox guarding the hen house big time, and those managed care organizations just go do anything they want to do.”
Burton, who sits on the Medicaid and Appropriations Committees, said he’s inclined to take the report’s findings with a grain of salt. He said constituents had frequently called to complain about United and Magnolia, but he hasn’t received many calls recently.
“Managed care is very new, so we expected that there would be some growing pains so to speak. And the period of time that they did their research was way before February,” Burton said. “I’m not defending anyone who’s doing wrong. I’m just saying those calls have stopped. And they were awarded contracts, so apparently some things have changed since the information that was obtained in that report came out.”
Medicaid received the Navigant report in late February and responded with a 9-page rebuttal to many of Navigant’s findings. In its response, the Division of Medicaid said it is working on many of the issues, including developing standard operating procedures for reviewing reports and implementing a platform for tracking report follow up.
But in a 120-page response to the Legislature the following week, the agency strongly criticized Navigant’s findings, saying “we are disappointed with the final product and find its usefulness far less than adequate.”
“We entered this review process in good faith and in the hopes that a fair evaluation and constructive recommendations would be the outcome. Instead Navigant parroted back our current practices, repeated the content of letters we received from CMS and other readily accessible information from the internet such as federal regulations,” Medicaid wrote in the cover letter to their response.
Regardless of whether MississippiCAN needs improving, further evaluation will be coming. One of Navigant’s recommendations included conducting a second study, this time to examine whether the program has saved the state the millions of dollars it claims it has. In Medicaid’s 2018 appropriations bill, the Legislature set aside $250,000 to conduct this assessment with an outside contractor. Medicaid posted its request for proposals last Friday.