Is Alternative Lending The Answer for SME Cash Flow?

Health care payments are hardly a simple topic, but Idaho providers wanted to make things as easy as possible for their patients. But when a contractor allegedly fell behind on payments to local providers, things began to get tricky.

Behavioral health service companies in Idaho claim that a new contractor that was hired to assist in managing the care of Medicaid patients has fallen behind on its payments to the providers. The health care providers give counseling and other behavioral health services to low-income and disabled adults and children on Medicaid.

The contractor, Optum Idaho, claims that it fixed a glitch that resulted in absurdly tiny claims payments to the companies. However, some providers told the Associated Press that the problem started last September, when Optum took over management of Idaho’s Medicaid behavioral health system.

That glitch resulted in Optum incorrectly sending checks to providers totaling amounts like $.05, $.07, or $.11 starting on August 1, according to the AP. Remittance documents from United Behavioral Health–Optum’s parent company–to Boise’s Access Behavioral Health, show payment errors dating to October, reported the news source.

“Whatever we get from Optum is the money we directly use to pay our employees,” Access owner Nikki George said. “And if we send in a claim for $60, we’re paying our employees $40 of that and if we only get 5 cents, we don’t have any money to pay our employees.”

Unfortunately, Optum is operating within its state contract, which states that Optum must pay 90 percent of claims “on time and accurately within 30 days.” Optum Idaho said that, in terms of its most recent glitch, 29 of 1,725 providers received the tiny checks. That means that less than 1 percent of total claims made during the week of August 11 were affected.

Access patients have not been affected, according to George, but when Optum stops paying claims, Access takes out loans to continue to pay employees and ensure that patients remain untouched.

George added that she has considered suing Optum–the contractor even suggested in an E-mail that Access take legal recourse if it is dissatisfied–but does not believe her small firm would financially survive the legal battle.

“As a network subcontractor with Optum, if the dispute and resolution process identified by Optum are not (meeting) your agency’s expectation, your next option is that you may decide you need to take legal recourse to help with the resolution,” Health and Welfare’s Division of Medicaid Contract Monitor Carolyn Burt wrote in an E-mail, according to George.

This is not the first instance of problems arising over alleged incorrect payment practices. Back in May, PYMNTS.com reported on the court case with the Pennsylvania Chiropractic Association (PCA). PCA alleged that the IBC was using unfair payment recovery practices; specifically in the way IBC determined overpayments to PCA members treating patients covered by ERISA plans, usually for large and self-funded employers.

A Chicago court found that IBC must change its payment and recoupment practices. In that instance as well, the IBC claimed that the payments issue was from computer glitches in 2006 and 2007 and went out to PCA members who weren’t authorized to provide capitated services. IBC then began withholding payments for non-capitalized services in order to account for the overpayments.

A judge ruled that in the future, when seeking repayment for previously-issued reimbursements, “IBC shall identify the specific health insurance plans applicable to each claim at issue, and differentiate between those plans which are governed by (ERISA) and those which are not.”