Some nursing home operators say they haven’t been paid since the state transitioned to managed care on July 1. Photo from Getty Images.

By Whitney Downard
Indiana Capital Chronicle

INDIANA — Jeff Huffman and other nursing home operators in the state say they haven’t been paid for their work since the state transitioned to managed care for certain Medicaid services on July 1 — marking two weeks in limbo for providers in the PathWays to Aging program.

“Basically, we rely on Medicaid reimbursements to keep our bills paid and keep operating. When all of a sudden the spigot gets turned off … that’s not going to last long for a small company,” said Huffman, the chief operations officer and chief development officer of The Strategies.

The Strategies operates five nursing home and rehabilitation facilities across the state in Muncie, Loogootee and Vincennes and employs roughly 300 Hoosiers to care for 230 residents.

“We’re two or three payrolls away from not being sure what we’re able to do,” Huffman said.

Paul Peaper, the president of the Indiana Health Care Association that represents the interests of operators like Huffman, said he’s heard from several facility teams about issues submitting claims.

“We’ve got three different managed care entities all with their own claims portals. As you’re submitting your claims into each of their claims portals, it looks different and reports out different information at different times,” Peaper said. “It’s trying to track — okay, is this claim pending? Is this claim denied? Is this claim rejected? Is this claim paid?”

Adding more complications to the process, providers bill on different schedules — either weekly, twice a month or monthly. So while the first rounds of weekly providers have started billing, only a handful of bimonthly providers have started billing and monthly bills haven’t been submitted at all.

The Family and Social Services Administration tasked with overseeing the transition to managed care clarified that electronic nursing facility claims are not considered late until after 21 days.

During the transition period, FSSA has sent periodic updates to stakeholders about continuity of care, essentially saying that the Managed Care Entities couldn’t withhold payments due to issues like prior authorizations.

The July 1st Transition

Under managed care, the state contracts with major insurers Anthem Blue Cross and Blue Shield, Humana Healthy Horizons in Indiana and United Healthcare Community Plan to pay for and manage the health care of a Medicaid population. While the delivery model stabilizes expenses for states, enrollees have more mixed results.

Hoosiers enrolled in the Healthy Indiana Plan or traditional Medicaid were already under managed care but Indiana shifted its last major population — elderly and disabled Hoosiers utilizing long-term services and supports — on July 1.

Long-term care providers vigorously tried to delay — if not outright stop — the state’s managed care proposal, pointing to reported issues and costs in other states.

“At the heart of it, we’re dealing with an aged and disabled population in a small care setting. There’s just a real concern that putting any layer — a la a managed care entity — in between the care our members provide and their residents could delay or impact their care,” Peaper said.

Post-rollout, Huffman said he’s had varying levels of success communicating with the managed care entities about the denials.

Prior to the transition, Huffman said that Indiana was “the most efficient Medicaid system in the country,” saying that facilities “could bill on a Friday and get paid on Wednesday or Thursday the following week.”

Peaper said much of that efficiency came from having just one portal for one payer — the state — and the processing seemed to be “near instantaneous.”

Additionally, long-term care facilities operate on thinner margins than their counterparts, Peaper said. Nursing homes and assisted living facilities are also the one segment of the health care industry workforce that has yet to recover from the COVID-19 pandemic.

Potential Remedies Ahead?

State law does permit providers, including nursing homes, to petition for emergency relief in the first 210 days of the managed care transition period.

“The office of Medicaid policy and planning shall establish a temporary emergency financial assistance program for providers that experience financial emergencies due to claims payment issues while participating in the risk based managed care program,” Senate Enrolled Act 132 reads.

Under the law, a financial emergency is when claims denials exceed 15% during one billing cycle or when a provider goes 21 days without payment for a minimum of $25,000 in aggregate claims.

Additionally, the state’s Medicaid director has the discretion to categorize something as a financial emergency for providers. To qualify, providers must have participated in the claims testing process and submit relevant documentation to FSSA. The state agency then has seven days to respond and — if the circumstances qualify as a financial emergency — then the office “shall” direct the managed care entities to provide an emergency payment within seven days.

However, that payment will only cover 75% of the average claim — “which is kind of like giving the insurance company a 25% discount,” Huffman said.

The insurers then “shall reconcile the temporary emergency assistance payment funds with actual claims payment amounts,” according to the law.

The law also authorizes a workgroup, made up of MCEs, state officials and providers — including nursing homes, Area Agencies on Aging and home health services — to address claims issues.

Peaper isn’t a member but the IHCA does have a representative with the claims workgroup.

Still, he expressed caution when monitoring the rollout of PathWays, noting the importance of getting the program right considering the ramifications on providers and residents.