Clay’s Weekly Medicaid RoundUp: Week of January 6th, 2020

Soundtrack for today’s RoundUp pessimist readers- (bonus-

For optimist readers-

We made it to 2020. Where are the flying cars?

THIS ONE GOES UP TO 11! Come hang out at the 11th annual Medicaid Innovations Conference in Orlando in February. One of my favorite events (it must be- I’ve been to all but 1 of them over the years). Check out the agenda and sign up here-

ANDY, ANDY- SO FINE AND DANDY- HOW DOES YOUR BUDGET GROW? Continuing our coverage of the Good Guvn’r Cuomo’s Adventures in Bad Leadership this week. Andy announced a 1% cut to Medicaid providers on New Year’s Eve (Happy New Years, Suckers!). That cut will be for 90 days and will save about $126M. Sounds cool until you realize that just the Medicaid budget hole is $4B. Andy also promised a plan to deal with the overall deficit back in December. Part of that plan appears to be cooking the books again by delaying about $1.7B in Medicaid payments so that they appear in the next FY (He also did this last year, but secretly). We all wait with baited (bated?) breath for the new plan. Especially officials (and taxpayers) in the counties of NY. Cuomo’s recent state of the state hinted at increasing the share counties chip in to cover the costs of unfettered Medicaid spending. Innovation abounds in the legislature as well: the brilliant Dems in the statehouse want to “address the deficit” but without “cutting services.” I would also like to lose weight by eating cookies. Idiots.

NEW WAY TO GET A DO-OVER ON AN MCO BID? ELECT A NEW GOVERNOR, OF COURSE- If you lost out on the latest KY bids, dust off your proposal. Beshear- in his effort to undo all things Bevin- has ordered a do-over on the latest contract awards. Is that even legal? Is “legal” even a thing anymore?

MOLINA BACK ON THE WARPATH- The MCO will purchase NextLevel Health for about $50M. The buy will give Molina a strategic path to increase Illinois Medicaid revenues.

CMS TINKERING WITH 340B AGAIN- This time CMS is taking aim at duplicate discounts (that hurt Rx makers by hitting them with having to pay discounts in both 340B and the Medicaid Drug Rebate Program; MDRP). The federalis released a guidance bulletin Jan 8, outlining what The Big House views as best practices. Basically, the recommendations focus on using data to avoid overlaps, writing better contracts and limiting covered entities. Initial opposition was summarized as thus: These are great ideas, but it will make it harder for us to keep the federal money flowing. Doing the right thing is too costly.

YOU HAVE A FEW MORE WEEKS TO TELL CMS HOW MUCH YOU HATE CHANGES TO SUPPLEMENTAL PAYMENTS REGS (BUT DON’T MAKE IT TOO OBVIOUS HOW SELF-INTERESTED YOUR OPPOSITION IS)- I think the gist is best gleaned from a recent quote by CMS Administrator Veerma: “We have seen a proliferation of payment arrangements that mask or circumvent the rules where shady recycling schemes drive up taxpayer costs and pervert the system.” Supplemental payments to skilled nursing (and other) facilities now account for $3.5B each year (about 7% of all Medicaid FFS spend)- but when these payments are passed through the managed care model, CMS has very little idea what they are actually paying for.  Feb 1 is the deadline to weigh in on the proposed rule. The rule establishes new reporting requirements about what states are doing with the payments.

KANSAS HOPS ON THE EXPANSION TRAIN- The Good Guvn’r Kelly announced plans to take the free federal money last Thursday. The Kansas expansion plan will seek to get additional funding for services for the thousands of severely disabled members who have been on the waiting list for years. Just kidding – I am sure it will all go to comparatively healthy 20-year olds who don’t want to be forced to work to pay for their own “coverage.” To be fair to KS, they have cleared their waiting list in the past. Not all states (and certainly not expansion ones) can say the same thing.

$2.6B IN 2019 FRAUD RECOVERIES LAUDED BY DOJ. SOUNDS GREAT UNTIL YOU REALIZE CONSERVATIVE ESTIMATES PUT CARE/CAID FRAUD AROUND $100B EACH YEAR- Read the latest annual report here. It is getting better. Long way to go. Very long way.

FARRIS’S FANTASTIC FRAUD FOLLIES– And now for everybody’s favorite paragraph. The paragraph taxpayers love to hate. Let’s start the ticker and see who wins this week’s award.  Just a few tidbits this week, dear readers (it is just the first full week of the year, after all). Lets first go to Balmore (Baltimore), where we find someone murdered over Medicaid fraud. This one doesn’t have a dollar amount, but I wanted to share it with you to show you how pernicious and evil Medicaid fraud is. Latrina Ashburne, a teacher’s aide, was murdered (allegedly) by Devon Carter and Clifton Mosby. The broke into her home and shot her, thinking she was a Medicaid fraud whistleblower in a case against a friend of theirs.  Lets head north for some less lethal Medicaid fraud. In Danville, New Hampshire we find Richard Gaudette. Mr. Gaudette was sentenced for stealing $111k in Medicaid bucks using a personal care services scheme. He billed for services even when his clients were in the hospital or dead. For our last entry this week, let’s head west, way west- all the way on over to Alaska. We find John Zipperer in Wasilla, where he operated a $9M scam using unnecessary tests. He ran over 1M (or claimed he did) tests on urine samples using a lab he owned in Tennessee. His $9M scam was 10x the total amount that all other providers in Alaska were reimbursed for the same tests. Wow. John Z- you win this week’s award! Taxpayers, you of course lost, yet again.

That’s it for this week. As always, please send me a note with your thoughts to or give me a buzz at 919.727.9231. Get outside (finally get those leaves up if you haven’t. I know I haven’t. ) and keep running the race (you know who you are).

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