By Chad Terhune
Kaiser Health News, January 3, 2019
Marcela Villa isn’t a big name in health care — but she played a crucial role in the lives of thousands of Medicaid patients in California. Her official title: denial nurse.
Each week, dozens of requests for treatment landed on her desk after preliminary rejections. Her job, with the assistance of a part-time medical director, was to conclusively determine whether the care — from doctor visits to cancer treatment — should be covered under the nation’s health insurance program for low-income Americans.
She was drowning in requests, she said, and felt pressed to uphold most of the denials she saw. “If it was a high-dollar case, they tried to deny it,” Villa said. “I told them you can’t deny it just because it’s going to cost $20,000.”
Villa, 32, did not work for the government. She did not even work for an insurer under contract with the government. She worked for a company now called Agilon Health. Owned by a private equity firm, it’s among the legion of private subcontractors looking to profit from Medicaid patients.
California’s Medicaid program, known as Medi-Cal, has determined that the Long Beach company, which was paid to coordinate care for about 400,000 patients, improperly denied or delayed care for at least 1,400 of them, state officials confirmed. The state Department of Managed Health Care is investigating further.
The state findings, along with internal company documents and a whistleblower complaint obtained by Kaiser Health News, shine a light on the potential dangers of outsourcing care for poor people. Government oversight, not rigorous to begin with, fades as taxpayer money filters down through layers of companies eager to seize on Medicaid’s substantial growth under the Affordable Care Act. Medicaid officials say they have authority only over the health plans, not their subcontractors.
Skimping On Services?
Nearly three-quarters of the 73 million low-income Americans on Medicaid are now in managed care, in which states pay health insurers fixed monthly amounts for each enrollee to cover the range of services they need.
Under this system, keeping patients as healthy as possible is one way to make money. Another is to deny or skimp on services.
Increasingly, Medicaid plans outsource the work of managing patients’ health and medical treatment to subcontractors like Agilon — passing along a share of the government money coupled with the financial risk posed by a fixed budget.
These firms can be powerful gatekeepers. They run physician groups, bear responsibility for forming doctor networks and judge whether a request for care is necessary.
Agilon is a big player in California — doing business with insurers such as Molina Healthcare and Blue Shield of California.
Agilon’s June report depicts an operation that was often stretched thin: Nurses were handling 120 to 200 requests for care per day, on average, with no full-time medical director to review the findings.
From 2014 until May, the company relied on a family physician who was working 10 to 12 hours a day running his own medical practice, according to the report.
Ultimately, Agilon’s internal investigation found that patient care may have been denied 439 times since 2014 without a physician’s review of the medical records — a potential violation of state law. Under California law, only a licensed physician or health care professional who is “competent to evaluate the specific clinical issues involved” can determine medical necessity.
“These private entities get very little oversight,” said Linda Nguy, a policy advocate at the Western Center on Law & Poverty in Sacramento, “and there’s real harm being done to patients.”
By Don McCanne, M.D.
Private Medicaid managed care companies using private subcontractors to appropriate to themselves our public funds by denying health care – need we say more?
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