Georgia doctors take on Medicaid HMOs over slow pay

The state medical association has asked the governor to delay statewide implementation of the Medicaid managed care program until problems are addressed.

By Amy Lynn Sorrel — Posted Sept. 11, 2006

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Georgia perinatologist Brad S. Bootstaylor, MD, says his Atlanta practice has not received Medicaid reimbursements for more than two months. He has had to lay off two employees, and his group is owed about $300,000 in outstanding claims since three private HMOs began to take over management of the state's Medicaid program in June.

"The transition to private insurers has made it difficult to provide the care that these patients need and deserve," said Dr. Bootstaylor, who practices at Atlanta Perinatal Associates. Between 30% and 40% of the group's patients are on Medicaid.

That is why Dr. Bootstaylor, along with about a dozen other doctors and medical groups, filed a lawsuit in August alleging that Peach State Health Plan, WellCare of Georgia and AMGP Georgia Managed Care Co. have violated the state's prompt-pay law.

The statute requires them to reimburse doctors within 15 business days of receipt of a clean claim.

The doctors, who are seeking class-action status, also allege that the managed care plans knew they were incapable of processing and paying claims on time when the Georgia Dept. of Community Health awarded them the $3 billion Medicaid contract last July.

"We have a contract ethically and morally to provide the best care to our patients, and they have a written contract to pay practitioners for doing that," Dr. Bootstaylor said.

Because of millions of dollars in late reimbursements, the doctors who filed suit claim they have had to lay off staff and scale back patient services.

WellCare and Amerigroup Corp., the parent company of AMGP Georgia, denied the allegations. The switch to managed care was meant to provide more services to Medicaid patients and is "off to a very solid start," said Amerigroup spokesman Kent Jenkins.

He said 99% of AMGP's clean claims are paid within 15 days and that the average time is within three days of receipt.

"Providers are getting paid, and low-income Georgia residents are getting health care," Jenkins said.

WellCare spokeswoman Carol A. Cassara said the company has met the standards of its contract and takes an average of six days to process a claim from the date of receipt.

"We understand that this is a significant change in the way Medicaid used to be handled, and ... we know from our experience in other states that it will pay off in improved quality of care," she said.

Peach State Health Plan did not return calls for comment.

State officials also declined to comment on the lawsuit, but the Georgia DCH reported that during July, there were three to four weeks of payment delays, for which some physicians received interim payments. DCH statistics showed that as of Aug. 11, 96% of clean claims were processed and either paid or denied within 15 business days. State officials touted the move to managed care as a way to conserve budget dollars and expand access to care.

Worse to come?

But Roderick E. Edmond, MD, the doctors' attorney, said the problem is that the HMOs have the upper hand in withholding reimbursements and that the doctors' claims are being rejected because of the plans' internal problems processing and keeping up with claims.

"The question to ask is what percentage of claims submitted are being considered clean and what percentage of the dollar value of those submitted is being paid," Dr. Edmond said.

Dr. Bootstaylor explained that the plans have asked him to submit claims electronically first, "then they turn around and say they need it on paper, and then they deny the claim."

The Medicaid managed care program, called Georgia Healthy Families, went into effect in the Atlanta and Central Georgia regions June 1 with about 600,000 enrollees. Doctors are concerned that the statewide transition, slated to provide care to more than 1 million members as of Sept. 1, will exacerbate existing problems within the new Medicaid managed care program.

The Medical Assn. of Georgia has not taken a position on the lawsuit. But in an August letter to Gov. Sonny Perdue, doctors requested that the program be put on hold until certain deficiencies are addressed.

In addition to delaying reimbursements to doctors, the health plans have not been able to process electronic claims adequately and aren't allowing doctors to make simple adjustments, the MAG letter stated. The HMOs also have failed to assign patients to a doctor in the appropriate specialty or geographic location because of internal electronic errors.

The operational issues "have significantly disrupted the ability of physicians to care for their patients," wrote MAG President William R. Hardcastle, MD. "It is clear that these problems are of such magnitude that we are asking that [the governor] delay implementation of the HMO program in other regions."

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Case at a glance

Atlanta Perinatal Associates et al. v. Peach State Health Plan, AMGP Georgia Managed Care Company Inc., WellCare of Georgia Inc.

Venue: Superior Court of Fulton County, Georgia
At issue: Whether the HMOs contracting with the state to provide Medicaid benefits are violating state prompt-pay laws by delaying reimbursements to physicians. Health plans say they are paying claims on time.
Potential impact: Doctors say overdue payments make it difficult to continue treating Medicaid patients and force them to cut staff.

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