Medicaid Patient Shift Squeezes Some Home Health Care Providers

The abrupt exodus of thousands of South Texas Medicaid patients from one managed care health plan is putting financial strain on home health providers already struggling to stay in business after the state’s transition to Medicaid managed care.

In July, Molina Healthcare announced it was cutting its reimbursement rates and internal administrative costs by 10 percent. John Molina, chief financial officer of the company, said that after its Medicaid health plan expanded to South Texas, the firm was losing $14 million a month in Texas.

Molina said he realized the rate cuts were painful to providers, but the move was made in order to “stay in business and not impact patient care.”

“The minute that a handful of attendants in one area got word that their pay was being decreased because Molina cut reimbursement rates, the word spread,” said Vanessa Sandoval, a registered nurse and administrator at Texas Visiting Nurse Service. Because the relationship between Medicaid clients and home attendants is so close, patients switched health plans rather than lose their attendants, Sandoval said.

Since Molina announced the rate cut, 11,400 patients have switched from Molina to one of four other health plans offered in South Texas, according to the Texas Health and Human Services Commission.

“That’s caused issues for the other plans that have seen an influx of patients they weren’t expecting,” Stephanie Goodman, a spokeswoman for the health department, wrote in an e-mail to the Tribune. Patient care has not been interrupted, but there have been delays in getting authorizations for home health services while “the plans catch up on the paperwork for all the members who left Molina,” she said.

State officials and health plans have assured providers they will be retroactively reimbursed for continuing services, but home care agencies fear that without prior authorization, there is no guarantee of payment.

In August, Sandoval’s agency did not have authorization for 70 percent of its Medicaid clients and had to take out a multimillion-dollar credit line to ensure it could pay employees. “We were risking a lot of money” by continuing to care for patients without authorization, she said.

Sandoval said the agency could not discontinue care for patients like Antonio Fuentes, a 28-year-old who has cerebral palsy and cannot speak, because his mother works during the day and cannot stay home to care for him. Yet, for three months the agency did not know whether it would receive payment for care provided to Fuentes.

There is also concern among home care providers that health plans are authorizing less time with patients, which could increase the number of minor injuries. “We have someone that burned herself trying to cook because the attendant used to be there to help with a certain meal at a certain time of the day,” Sandoval said.

In 2011, state officials projected that Texas would save $300 million in the first biennium by expanding Medicaid managed care to South Texas. Lawmakers backed the expansion, arguing that contracting companies to provide Medicaid benefits at lower rates would make the program more efficient.

Texas paid $614 million for home health services for Medicaid clients in 2011, according to a state audit published in September. The auditors found nearly a quarter of the case files tested did not contain a statement from a health practitioner that home care was medically necessary and that South Texas had significantly higher expenditures for home care than any other region in 2011.

Both Molina and home care advocates said they were working with the state to address the efficiency problems found in the state’s audit.

“We are sincere in wanting to find a long-term, viable resolution to this,” Molina said. “The most important thing is we don’t want to be adversaries with the providers.”