Author: MM_ADMIN

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FWA- Western suburbs OB-GYN pleads guilty to Medicaid fraud

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Monique Brotman was convicted of stealing $58k from Medicaid, but she says things are not as they seem and she plead down to avoid jail time. Amount you spent on this (if you pay taxes)- $58,747.57.

 
 

Clipped from: https://www.chicagotribune.com/news/breaking/ct-obgyn-river-forest-medicaid-fraud-20221130-lhg2fzy5trenrberezf4npuxje-story.html

A suburban OB-GYN alleged to have fraudulently charged Illinois’ Medicaid program pleaded guilty Tuesday in Cook County Circuit Court, Attorney General Kwame Raoul’s office said.

Dr. Monique Brotman, 52, of River Forest, billed Medicaid $58,747.57 for ultrasounds and other procedures that were not provided, alleged the attorney general’s office, which prosecuted the case. The alleged false charges occurred between December 2008 and February 2015, Raoul’s office wrote in a news release.

“Thousands of Illinois residents rely on Medicaid for their health care. Defrauding the people of Illinois by misusing needed Medicaid resources will not be tolerated,” Raoul wrote.

The OB-GYN was ordered to pay full restitution upfront and will be excluded from the Medicaid and Medicare programs for at least five years. She was also sentenced to five days of community service, the news release said.

Brotman told the Tribune she’s operated a private practice in the western suburbs since 2008, part of a decadeslong career.

“And I would like to do so again,” Brotman said. She has been told that her medical license will be automatically suspended for the term of her five-year probation, a temporary stoppage of her practice that she called “heartbreaking.”

“Things are not what they seem,” Brotman said, adding that she had doubts about some of the alleged fraudulent charges but decided to plead guilty to avoid facing potential jail time.

“I think that it was very heavy-handed, and I don’t think that the punishment mirrors the offense,” she said. “This is something that occurred almost a decade ago in a very dark time in my life, and that should be taken into account.”

Brotman’s office hasn’t accepted Medicare or Medicaid since the investigation into her office began in 2015, she said. She said she believes the pause should have been counted as time served.

The attorney general’s statement credited the Illinois State Police for investigating the fraud allegations and said Assistant Attorney General Rob Sparano handled the case.

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FWA- Maryland Man Pleads Guilty to Defrauding Medicaid of More than $700,000 in Scheme Involving Personal Care Services

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Joseph Tamjong of D.C. billed for 3,400 hours of personal care services while he was travelling internationally, including 156 times he claimed to work 24 hours in a 1-day period- Amount you spent on this (if you pay taxes)- $733,405.

 
 

Clipped from: https://www.justice.gov/usao-dc/pr/maryland-man-pleads-guilty-defrauding-medicaid-more-700000-scheme-involving-personal-care

Defendant is 12th Individual to Plead Guilty Since August 2018

            WASHINGTON – Joseph Tamjong, 51, of Lanham, Maryland, pleaded guilty today to defrauding the D.C. Medicaid program out of $733,405. 

            The announcement was made by U.S. Attorney Matthew M. Graves, Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division, Maureen R. Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the region that includes Washington, D.C., and Daniel W. Lucas, Inspector General for the District of Columbia.

            Tamjong pleaded guilty in the U.S. District  Court for the District of Columbia to health care fraud, which carries a statutory maximum penalty of 10 years in prison. Under federal sentencing guidelines, Tamjong faces a likely recommended sentence of between 27 and 33 months in prison. He has agreed to pay $733,405 in restitution and $396,155 in a forfeiture money judgment. The Honorable Christopher R. Cooper, who accepted Tamjong’s guilty plea, scheduled sentencing for March 7, 2023.

            In court documents, Tamjong admitted that between December 2014 and February 2022, he was employed as a Personal Care Aide and/or a Participant-Directed Worker to provide personal care aide services to residents of the District of Columbia who needed assistance performing activities of daily living, such as getting in and out of bed, bathing, dressing, and eating. Tamjong admitted that he submitted false timesheets that claimed he provided these personal care services when in fact he did not.

            As part of his scheme, he even caused Medicaid to be billed for approximately 3,400 hours of services that he purportedly provided when he actually was traveling internationally. On 156 separate occasions, he also caused Medicaid to be billed for 24 hours of services that he allegedly provided in one day.

            The FBI, the Department of Health and Human Services’ Office of Inspector General, the District of Columbia’s Office of the Inspector General’s Medicaid Fraud Control Unit, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the D.C. Medicaid program.

            Tamjong is the twelfth former personal care aide since August 2018 to plead guilty to defrauding Medicaid in the U.S. District Court for the District of Columbia. Six of those aides were sentenced to 13 months in prison; a seventh and eighth were sentenced respectively to 15 months and 10 months.

            The government urges the public to provide tips and assistance to stop health care fraud. If you have information about individuals committing health care fraud, please call the Department of Health and Human Services’ Office of Inspector General hotline at (800) HHSTIPS [(800) 447-8477] or the D.C. Office of the Inspector General at (800) 724-TIPS [(800) 274-8477].

            This case is being prosecuted by Assistant U.S. Attorney Kondi Kleinman with assistance from Paralegal Specialist Michon Tart.

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FWA- Group Home Owners Sentenced in $1 Million Medicare Fraud Scheme

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Lindell King and Yndera Diggs got kickbacks from Behavioral Medicine of Houston (BMH) to send patients their way. Amount you paid (if you pay taxes)- $538k to Lindell and Ynedra; $1M to BMH for the resulting services they billed for the patients they bought via kickbacks.

 
 

Clipped from: https://www.justice.gov/opa/pr/group-home-owners-sentenced-1-million-medicare-fraud-scheme

A Texas married couple was sentenced today for a $1 million Medicare fraud scheme, including violations of the federal Anti-Kickback Statute.

Lindell King, 53, of Missouri City, was sentenced to 60 months in prison. Ynedra Diggs, 45, also of Missouri City, was sentenced to 70 months in prison. King and Diggs were also ordered to pay $537,992.55 in restitution.

On April 4, King and Diggs were convicted after trial in the Southern District of Texas of conspiracy to defraud the United States and to pay and receive health care kickbacks, and multiple substantive violations of the Anti-Kickback Statute.

According to court documents and evidence presented at trial, both Diggs and King were patient recruiters who owned and operated group homes in which Medicare beneficiaries lived. In exchange for sending their group home residents to the Behavioral Medicine of Houston (BMH), a community mental health center that purported to provide partial hospitalization services, BMH paid Diggs, King, and other patient recruiters illegal kickbacks in cash and by check, often concealed as payment for “transportation” or other sham services. During the course of the conspiracy, BMH fraudulently billed approximately $1 million to Medicare in claims related to patients it received in exchange for the kickbacks paid to Diggs and King.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer B. Lowery for the Southern District of Texas; Acting Special Agent in Charge Jason Meadows of the Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge James H. Smith III of the FBI Houston Field Office; and Chief William Marlowe of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

The HHS-OIG, FBI, and MFCU investigated the case.

Trial Attorney Monica Cooper and Acting Assistant Chief Brynn Schiess of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

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TECH- Google rolls out search features for Medicaid, Medicare patients

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Google seeks to replace your local Medicaid eligibility state employee.

 
 

Clipped from: https://www.fiercehealthcare.com/health-tech/google-rolls-out-search-features-aim-make-it-easier-sign-medicaid-medicare

 
 

LAS VEGAS—When many people are looking to enroll in health benefits, they turn to Google as a source of key information on eligibility, the application process and in-network providers.

In this spirit, the Google Search team has quietly rolled out multiple features for its search engine that aim to make it easier for users to access key information about obtaining Medicaid and Medicare benefits, as well as which doctors locally accept those types of coverage.


(Google)

If someone submits a search query for Medicaid in their state, for example, the top of the results will populate with multiple buttons that direct them to key results on eligibility requirements, how to apply and where they can log in to their accounts. Searching for Medicare generates similar buttons, as well as an option to pull up news about the program.

Hema Budaraju, senior director of product for health and social impact at Google Search, told Fierce Healthcare that access to information is a social determinant of health, and addressing that challenge is a key part of how the tech giant is thinking about equity.

“It’s equity by design in the product,” Budaraju said in an interview at the HLTH conference, “and we’re very proud of being part of the journey.”

Helping people secure coverage is one piece, better enabling them to use it effectively is another. Another recent addition to Google’s search allows people to seek out local physicians and the results will include if those doctors accept Medicare and Medicaid.

When a user clicks into a specific physician, they can also further investigate their options using a “check insurance info” option that allows them to filter by specific Medicare and Medicaid carriers and plans.

Budaraju said the goal was to offer these details in “an easily consumable manner” that enables them to make “timely” decisions about their care and coverage. She added that these tools are not limited to Medicare and Medicaid, and that Google has rolled out similar functionality for the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program and electronic benefit transfer (EBT) programs as well.

The journey in accessing data on these social programs is “nonlinear,” Budaraju said, and often requires people to sift through multiple webpages and sites to find the details they need. That’s why Google saw an opportunity to streamline the experience.

She said the Search team also sees an opportunity to use this framework as a baseline for other scenarios, such as economic security, crisis response or in extreme weather. The focus on equity and easing the user experience is replicable in other areas, she said.

“There is a beauty to understanding, ‘What is the journey?'” Budaraju said.

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MH/RX- Mental health declines as Medicaid funds record psychotropic drug use

 
 

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: The author wants to be ticked about expansion but also wants to benefit from the idea that lockdowns caused a surge in MH needs. Besides all that we get some decent data on MH drug trends in Idaho.

Clipped from: https://idahofreedom.org/mental-health-declines-as-medicaid-funds-record-psychotropic-drug-use/

 
 

 
 

Taxpayer-subsidized government healthcare is not making people healthier. 

New data shows that the use of psychotropic drugs among Medicaid beneficiaries is projected to reach an all-time high for the third consecutive year. With one in every five Medicaid prescriptions in Idaho written for these drugs, there exists a serious problem with mental health throughout the Gem State.

Psychotropic drugs are generally used to treat mental health conditions like anxiety, depression and mood disorders. In 2016, there were just under 400,000 claims for such medications. Since then, the use of these drugs has increased significantly, with claims growing 86% as of 2021.  Estimates for 2022 say that Idaho Medicaid will spend $91 million to cover just short of one million claims for psychotropics by the end of the year.


Figure 1

Medicaid expansion and the COVID-19 pandemic both started in early 2020, as did the steep increase in psychotropic use. In the previous decade, spending on psychotropic medications declined by 5% per year and the number of prescriptions declined by 1% per year, when adjusted for inflation and Medicaid enrollment. Since 2020, however, this decline suddenly became a sharp annualized increase of 6% in prescriptions and 15% in spending (see Figure 2). 


Figure 2

Medicaid expansion added to the number of people who could receive benefits. But that change alone does not explain the rapid increase in prescriptions and prescription expenses. Demographic changes played a key role.

The effects of the pandemic – exacerbated by harsh government policies, including Gov. Brad Little’s statewide lockdowns – created a surge of Idahoans applying for Medicaid. For adults under 40 and those in their 60s, lockdown policies created isolation, unemployment, and economic hardship, all of which harmed their mental health significantly more than was the case for all other age groups. This likely generated a demographic shift necessary, among both existing and new Medicaid enrollees, that accounts for the sudden rise in psychotropic drug use. Despite the state’s relatively quick economic recovery touted by the governor, these concerning trends remain and are worsening.

There is cause for skepticism about the efficacy of prescribing psychotropic drugs to treat mental health conditions. One groundbreaking study asserts that the foundational theory supporting antidepressants – the chemical imbalance theory – is incorrect. Naturally, this research also calls into question whether antidepressants are effective forms of treatment. This theory has also been the basis of hesitancy for doctors and patients to stop antidepressant treatments, leading to lifelong use by people who would otherwise be able to seek better alternatives.

Despite doubts about the efficacy of some psychotropics, like antidepressants, these types of drugs are still commonly overprescribed. A national study notes that three out of every five visits where a new psychotropic drug was prescribed to a patient had no corresponding psychiatric diagnosis. Not only is this practice potentially detrimental to patient health, but the same study links this over-prescription to rising costs within the Medicaid system.

This tendency to overprescribe psychotropic drugs also made it common for patients to be taking more than one of these medications at the same time. Disturbingly, patients on Medicaid are significantly more likely to be taking multiple psychotropic drugs, despite this being an ill-advised practice that could have harmful effects on patients. This is especially concerning for the case in Idaho, as the state ranks among those with the highest incidence of this practice.

What is happening within the Medicaid system is an example of how government control negatively impacts people’s lives. The big government policies that dictated how we weathered the pandemic destroyed the livelihoods of many Idahoans and had long-term negative effects on their health and freedom. 

The entrapment of patients in chronic therapies is a common convention of modern medicine. Guaranteeing that patients continue their treatments without the hurdle of paying for them – as the Medicaid system does so well – is good for business among medical interest groups. Some healthcare professionals are beginning to notice these practices, resulting in the increasing popularity of osteopathic physicians versus their allopathic counterparts – that is, DOs rather than MDs. Scholars are finding that not only are mental health conditions not treated well with medications, but lifestyle plays a greater role in mental health than originally thought, and the medical community is beginning to take note.

Patients should be weary of those claiming to advocate for their well-being, only to call for bigger government and more social programs. Like subsidies and bailouts to support companies that are failing due to their bad business models, Medicaid is subsidizing the use of healthcare treatments and practices that may not be best for patients. However, the consequences of doing so are more severe than traditional business bailouts and the result is a worse healthcare system for everyone.

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MH (LA)- Mental health providers decry ‘mind-numbing’ prior authorization burdens as Senate debates reforms

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Prior auth requirements in LA are causing extreme delays, especially for MH services.

 
 

Clipped from: https://www.fiercehealthcare.com/providers/mental-health-providers-decry-mind-numbing-prior-authorization-burdens-senate-debates

 
 

Several mental health providers told a key Senate panel that prior authorization requests are getting in the way of patient care, as the chamber debates a key reform package. 

A subcommittee of the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing Wednesday on youth mental health. Some of the providers complained of long wait times and high administrative costs for prior authorization, a cost management tool employed by insurers that requires approval before physicians can administer certain services or prescribe drugs.

“It is mind-numbing,” said Ashley Weiss, director of medical student education in psychiatry for Tulane University and one of the panel’s witnesses. “It will take weeks sometimes getting prior authorization for community-based mental health services.”

A particular concern is getting responses for Medicaid mental health claims. Weiss said that in Louisiana there are five companies that provide managed care for Medicaid and each has a different prior authorization system. 

“The amount of administrative support you need to get these done is astronomical,” she said. 

There does need to be some authorization system in place and a process for helping youths understand the medications that they are prescribed, but the wait for approval of such requests is burdensome, said Sharon Hoover, professor of psychiatry and co-director of the National Center for School Mental Health with the University of Maryland.

“The wait times for getting into mental healthcare … for families can be really impossible to navigate,” she said.

The House did unanimously pass the Improving Seniors Timely Access to Care Act earlier this year, which would require all Medicare Advantage plans to install electronic prior authorization systems to speed up the gap between requests and approvals. It would also set up a system to get faster approvals for items and services that routinely get the green light. 

While the legislation passed the House back in September without any opposition, it remains unclear if the Senate will clear it before the end of the year. 

Sen. Roger Marshall, R-Kan., endorsed the legislation during the panel hearing, calling prior authorization “the number one physician administrative concern in America.”

Marshall, an obstetrician, said that his nurses sometimes deal with multiple fax requests from insurers as opposed to e-mails. While the legislation only focuses on Medicare, Marshall pledged to “go after [the Children’s Health Insurance Program] and Medicaid” in future packages.

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MCOs- UnitedHealth Group expects to bring in nearly $360B in revenue for 2023

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Its good to be king.

 
 

Clipped from: https://www.fiercehealthcare.com/payers/unitedhealth-group-expects-bring-nearly-360b-revenue-2023

 
 

UnitedHealth Group expects double-digit revenue growth in 2023, with the company’s top line protected to come in between $357 billion and $360 billion next year, the company announced Tuesday.

The healthcare giant also expects a profit of between $21.7 billion and $22.3 billion and net earnings of $23.15 to $23.65 per share, according to materials (PDF) released as part of the company’s investor conference. Cash flows from operations are expected to range from $27 billion to $28 billion.

UnitedHealth Group expects adjusted net earnings between $24.40 to $24.90 per share.

The company’s top line for 2022 is now expected to be approximately $324 billion. Net earnings are expected to be $20.85 to $21.05 per share and adjusted net earnings are expected to be $21.85 to $22.05 per share, as announced in the third-quarter earnings release.  

Net earnings attributable to shareholders are expected to hit about $20 billion this year.

UnitedHealth is already one of the most profitable health insurers, and its strong growth in 2023 will largely be driven by the company’s Optum division for healthcare services. 

Revenue at Optum is expected to grow next year by 15% to 17%, led by its outpatient medical centers business and its healthcare data and consulting services unit. Optum’s revenue is expected to grow from $183 billion in 2022 to between $212 billion and $214 billion next year.

UnitedHealthcare’s health insurance division serves 51 million people worldwide, according to the company. Health insurance enrollment in the U.S. is expected to grow by more than 2%, covering more than 47 million people.

UnitedHealth reported its third-quarter earnings in mid-October, where it posted $5.3 billion in profit and $80.9 billion in revenue for the quarter. It was the most profitable major national payer for the third straight quarter.

Through the first nine months of the year, UnitedHealth Group has reported $15.35 billion in profit and $241.4 billion in revenue.

In early October, UnitedHealth Group completed its controversial acquisition of Change Healthcare just weeks after securing a federal court win allowing the merger to go forward.

The two companies first announced plans to merge in January 2021.

In mid-September, the merger beat a challenge from the Department of Justice (DOJ) on antitrust grounds, and a federal judge gave the companies the go-ahead to close pending the divestiture of Change’s ClaimsXten business.

But the feds aren’t going down without a fight and want another shot at blocking the acquisition.

The DOJ issued a notice of appeal this month, saying it would take the case to D.C. circuit court. In the brief filing, the DOJ added that New York and Minnesota would also join the legal challenge. UnitedHealth is based in Minnetonka, Minnesota, a suburb of the Twin Cities.

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MCOs- Medicaid managed care merger starts Jan. 1 in Virginia

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: VA is pulling together their 2 different Medicaid managed care programs.

 
 

Clipped from: https://dailyprogress.com/news/state-and-regional/medicaid-managed-care-merger-starts-jan-1-in-virginia/article_72f8c64c-d60a-5c26-a520-2f5c53469c9e.html

Virginia health care providers want the next multi-billion-dollar, Medicaid managed care contract to tackle longstanding complaints about insurers’ practices – but the state and insurers say the imminent merger of the state’s two managed care programs could fix many of those.

On Jan. 1, the state will merge the two programs, which cover virtually all the 1.8 million Virginians whose health care is paid for by the $18.7 billion, joint federal-state system.

It contracts with six insurers, formally called “managed care organizations” or MCOs, to run the plans the two programs offer Medicaid recipients.

But what insurers’ guidelines for their coverage can differ depending on which program their plans come under, even if the insurers have plans for both programs, said Doug Gray, executive director of the Virginia Association of Health Plans.

“I think that’s where a lot of confusion comes up,” he said.

Providers sometimes think they’re dealing with one program when their patients are actually in the other, he said.

On Jan. 1, the new “Cardinal Care” will merge the Medallion 4 managed care plans that serves children, pregnant women and adults – that last category has grown with Medicaid expansion, since in years past only very low income parents qualified – and the Commonwealth Coordinated Care Plus plans that serve older adults who also are on Medicare, children and adults with disabilities, and individuals in long term care.

Cardinal Care won’t change or reduce any existing coverage, the state’s Medicaid agency, the Department of Medical Assistance Services, said.

But looking ahead to the negotiations for a new five-year managed care contract with insures, providers at a DMAS advisory group, said it needed to be written to address their complaints about denials of coverage for specialized services.

The state plans to begin negotiations on a new five-year contract next year and to nail down an agreement by 2024. That contract will succeed the current contract which expires in fiscal year 2026.

It will involve a complicated juggling of the interests of several actors — patients, doctors and other providers some of whom are often at cross-purposes, MCOs — and the state agencies involved with the program — DMAS, which handles the money and sets the rules and the Department of Social Services, which determines which individuals are eligible for coverage.

Providers and insurers clash most often.  

Providers are often ignored when they bring issues to an insurer, said Marcia Tetterton, executive director of the Virginia Association for Home Care and Hospice.

Jennifer Faison, executive director of the Virginia Association of Community Services Boards, said the new contract needs to ensure more accountability over insurers’ utilization review – the process by which the firms decide whether or not a service will be covered.

The kind of work that’s the focus of Virginia’s community services boards — mental health care outside of hospitals – will be a major emphasis in the new contract, Secretary of Health and Human Resources John Littel has said.

This year has already seen a major step up in Medicaid’s mental health coverage with last December’s expansion of coverage for multisystemic therapy, intensive treatment for youth aged 11 to 18; functional family therapy, short term treatment for disruptive youth; 24-hour-a-day mobile crisis response; community stabilization for people recently receiving crisis care and short term residential stays in a crisis stabilization unit.

Craig Conners, director of payer relations at the Virginia Hospital and Health Care Association said standards for when an insurers’ network of doctors, hospitals and other caregivers is deemed adequate needs to be looked, while coordinating care when a patient is discharged is a problem.

Cardinal Care should make it easier to manage gaps in care, the Medicaid agency says, and it will provide care coordination services as needed.

The unification of Medallion 4.0 and Commonwealth Coordinated Care Plus into Cardinal Care should also simplify processes for contracting with providers and their credentialing, the Medicaid agency said.

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MCOs- Analysts worry about long-term viability of ProMedica’s Paramount health plan

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: ProMedica swears its not on the ropes. But that whole losing Ohio thing really didn’t help.

 
 

Clipped from: https://www.toledoblade.com/business/development/2022/11/28/analysts-worry-about-long-term-viability-promedicas-paramount-health-plan/stories/20221128131

 
 

David Barkholz

The Blade

dbarkholz@theblade.com

Though analysts have applauded ProMedica’s plan to divest 147 money-losing nursing homes, the handoff to new operators will be expensive and the long-term viability of ProMedica’s Paramount health plan has become a concern, according to a new report from Moody’s Investors Service.

Paramount has just 88,000 health plan members today after losing about 256,000 Medicaid members last year when the state of Ohio declined to award it a new Medicaid contract under competitive bidding. It also has about 303,000 less-lucrative dental plan members.

In a report on November 17, Moody’s noted there is “uncertainty about the health plan’s long-term viability given its low remaining membership and high competition for commercial and Medicare products.”

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The credit-rating agency also indicated that Paramount will lose revenue next year when an administrative contract runs out that it had with Anthem to transition the Medicaid members it lost in Ohio. Anthem paid ProMedica $50 million in the first quarter for access to that book of business.

Health plans like Paramount need at least 150,000 members to be viable long-term and not be at risk to adverse selection of patients who run up outsized medical costs, said Kevin Holloran, a senior healthcare analyst with Fitch Ratings.

He said Paramount’s 88,000-member health plan count “is really on the small side.”

When Ohio did not re-award a Medicaid contract to Paramount, it cost the insurer about $1.57 billion this year in annual premium revenue. Paramount also announced about 200 job cuts after the loss.

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In an email statement, ProMedica said Paramount is competitive and there are no plans to sell it or its various product lines.

“There is no present consideration of divesting any Paramount health plans,” the statement said.

“While we are transitioning out of the Ohio Department of Medicaid’s managed care program on Feb. 1, 2023, we continue to have competitive Medicare Advantage plans, Marketplace Health Insurance, employer-sponsored health plans and dental insurance to grow Paramount Health Care.”

Paramount has been profitable throughout 2022. For the nine months ended Sept. 30, Paramount posted operating income of $39.1 million, a decrease of $24.1 million compared with the prior-year period.

Mr. Holloran said Paramount can gain the size it needs by acquiring another health plan or organically seeking new contracts with businesses and individuals.

If ProMedica doesn’t want to go down either of those avenues, selling Paramount eventually could be an option as well, Mr. Holloran said.

Moody’s said ProMedica also is looking at additional spending to provide “operating reserves” for the new operators of 147 skilled nursing homes that ProMedica has agreed to divest.

ProMedica has not revealed how much it has agreed to pay. But it easily could be more than $100 million given the scope of the operations being divested, Mr. Holloran said.

In December, ProMedica is expected to close the deal, in which it essentially agreed to give the 147 money-losing skilled nursing homes to a joint venture between Toledo-based Welltower and Integra Healthcare Properties of New York City.

It is surrendering a 15-percent stake worth about $412 million it had in a Welltower joint venture to own and operate the 147 nursing homes. ProMedica and Welltower initially purchased the nursing homes in a $3.3 billion deal for HCR ManorCare.

That turned out to be the price for getting out from under operating losses at the nursing homes. Those nursing homes were responsible for the bulk of losses in ProMedica’s senior care division that totaled $229.3 million in the first half of 2022.

In its report Nov. 17, Moody’s maintained ProMedica’s Ba2 rating on its borrowings but switched its status from under review to a negative outlook going forward. Ba2 is a notch below investment grade or junk bond status.

Part of the agency’s reasoning is that though operating losses and cash burn will be reduced by the divestiture, results are expected to fall at Paramount and ProMedica will likely take a writedown of its nursing home assets that may leave the hospital company perilously close to violating covenants on bonds and bank loans.

On the plus side, ProMedica returned its 11 hospitals to operating profitability in the third quarter. The core hospital division eked out an operating gain of $5 million in the quarter after operating losses in the first half of 2022. That $5 million operating gain compared with a $26.1 million operating gain posted in the year-earlier third quarter.

In its statement, ProMedica said it will continue “to take the requisite steps to strengthen our balance sheet throughout 2023.”

“ProMedica respects the revenue bond rating given by Moody’s Investors Service. As shared previously, we have not been immune to the challenges facing the healthcare industry, such as high inflation and persistent workforce shortages,” the statement said.

First Published November 28, 2022, 3:45pm

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MCOs- Centene in the headlines: 9 recent developments

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Coupla highlights about Planet Centene.

 
 

Clipped from: https://www.beckerspayer.com/payer/centene-in-the-headlines-9-recent-developments.html

From striking a deal to sell Magellan Specialty Health to allegedly delivering “unacceptable” performance for its Medicaid managed care contract for Illinois foster youths, here are nine stories about Centene that Becker’s has covered since Oct. 31.     

1. Centene CEO Sarah London was named among the 118 most influential women in corporate America by WomenInc.

2. Centene holds the largest share of the ACA exchange market in the U.S. at 15 percent, according to a study from the American Medical Association. 

3. Centene completed the sale of its Spanish and Central European businesses to Vivalto Santé, a French private hospital group, 

4. Centene is selling Magellan Specialty Health to healthcare administration company Evolent Health in a deal worth up to $750 million. 

5. Centene named Monte Ford, former CIO at American Airlines, to the company’s board of directors. 

6. Centene was named the 56th best employer for veterans, according to Military Times’ “Best for Vets: Employer Survey.”

7. Centene delivered “unacceptable” performance for its Medicaid managed care contract for Illinois foster youths, an investigation from the Illinois Answers Project found. 

8. Centene donated to political candidates in states where it is up for Medicaid contract selection or defending itself against overbilling accusations, sometimes through multiple subsidiaries, according to a Kaiser Health News report. 

9. Bill and Hillary Clinton were among those who paid tribute at a memorial for late Centene CEO Michael Neidorff.