Clay’s Weekly Medicaid RoundUp: Week of September 26th, 2016

Soundtrack for today’s RoundUp pessimist readers-


Or you can click the one for optimist readers – (in which Ginger Rogers sings a verse in pig latin in 1933)


THE LAST FRONTIER AND ACS (ER, XEROX) SETTLE THEIR DIFFERENCES- The original complaints centered around Xerox not getting provider payments out the door fast enough (and some payment errors, too), and the state wanted $47M in damages. The settlement announced this week landed on no hard cash penalty, but instead AK will get 100,000 hours of “free” work in the deal. Shareholders do not fear – looks like the state will still pay the full contract amount for the DDI and Ops. Subscription revenues continue- Phew!


WE NOW HAVE A LABEL, AND ITS “CONSERVATIVE” MEDICAID EXPANSION- Looks like cost-sharing (via HSAs and optional coverage buy-ups) for health insurance bennies is now called “conservative” based on this week’s Modern Healthcare analysis of the Anthem analysis of the Healthy Indiana Plan (HIP). For those unfamiliar, Anthem has about 150,000 bennies there. So they have a bit of perspective on what’s going on. According to the Anthem analysis, 70% of all Medicaid bennies chose to buy up into the “HIP Plus” option (which gets you dental and vision on top of what you get for HIP Basic). Nearly 60% of bennies with less than $230/ month income chose to buy up into Plus. And it looks like having a Plus card in your pocket has positive impacts – preventive screenings (which are covered under Basic, too) go up and ER goes down. The essential read is that when given choices for more coverage and a small cost, people choose it and it changes their behaviors. Shorthand – skin in the game.  Some establishment advocates are pooh-poohing it, saying its hurting Basic (remember the coverage is the same for everything except vision and dental), pointing fingers at MCOs to say “what are the MCOs doing to get them to more screenings and preventive visits?” No one is asking what the members are doing, of course. Back to that label in the headline. Some say “conservative” Medicaid expansion. I say “responsible” Medicaid expansion. Cue outrage, name-calling and snake-oil health economic theories that ignore basic human behavior.


DO-DO-DA-DO-DO [TRYING TO GET THE “WE’RE IN THE MONEY” MELODY ACROSS IN A HEADLINE]- MCOs added 3M bennies this year. Assuming an average cap across all rate cells of $200, that’s $600M more in revenue. Further assuming 2% profit, that’s another $12M added to the bottom line. Still small potatoes compared to 2015’s MCO enrollment surge of 8M, though.


FARRIS’S FANTASTIC FRAUD FOLLIES– And now for everybody’s favorite paragraph. Let’s start the ticker and see who wins this week’s award. Steven Schwartz of Chicago was charged with billing for $60k in personal assistance services not provided. Glenn Schabel of Long Island was sentenced this week for his role in nabbing $150M for prescription meds he then diverted to the black market (he was ordered to pay back $5.5M). First Call, a medical transport company in Buffalo, NY, agreed to pay $173k to settle allegations it got Medicaid payments for rides made by unqualified drivers. Physician’s Ambulance Services (in Cleveland, OH) basically got popped for the same thing, to the tune of $109k. Mr Schabel– you have impressed us all with the size of your pilfery. Go forth – through those iron gates over there to your left. See you in a few years.

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 (take a break from the 24 hour news cycle – isn’t it terrible?) and keep running the race (you know who you are).


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