Medicaid Providers Estimate They are Due at Least $8.5M in Delayed State Payouts

The state says it is meeting all federal standards for processing both redeterminations and new applications, and several reasons could prevent a claim from being paid

By Nicole Girten, Daily Montanan

Jason George has been waiting since September for the healthcare facility he works at in Sheridan to be reimbursed by the state for Medicaid expenses in one case – with facility owners taking out loans to make payroll and using their own funds to cover some patients’ prescriptions. And George isn’t alone.

In a survey conducted by the Montana Healthcare Association last month, all of the 21 Montana healthcare providers said they were struggling financially due to delays in payouts from the state – and collectively owed $8.5 million.

Medicaid payment delays largely stem from the Medicaid redetermination process, which started last summer, and new applications. Redetermination was when the state reevaluated Medicaid eligibility following the pandemic era’s “continuous coverage.”

Providers are saying new Medicaid applications are also taking longer than usual to process. Delays are three to six months long on average, but new application reimbursements only go back 90 days, according to the state.

Facilities are worried they won’t be able to recoup costs as they continue to provide care, with some reporting in the survey they already aren’t getting reimbursed past three months. George said for the first time in 12 years he’s considering formally contesting the state’s action.

The survey found among the 21 facilities, there were 114 redeterminations pending and 173 new applications pending – altogether waiting on $8.5 million in Medicaid to be approved by the state.

The state says it is meeting all federal standards for processing both redeterminations and new applications, and several reasons could prevent a claim from being paid – like the patient not being eligible, if the service requires prior authorization, among others – and the claim can’t be paid until those issues are resolved.

But Montana Healthcare Association Executive Director Rose Hughes recently told legislators from the providers’ perspective the problem has gone from bad to worse. She said Montana has about 56 non-state facilities, and there’s no reason to think the other facilities “aren’t experiencing the same problems and that these numbers aren’t bigger.”

“The bottom line is that these facilities are owed a lot of money, and they don’t see relief in sight,” Hughes said at a meeting in May. “It doesn’t look like it’s getting better.”

How one facility is making ends meet

George said some residents at Home Park Assisted Living have been stressed by the redetermination process, asking him “Am I going to have to leave?”

He said he reassures them they will still be receiving treatment and can stay, that the financial part is for the facility to figure out. He said the facility is out a total of $75,000, with the bulk of that, $30,000, from one resident.

George said this resident at the facility hasn’t had their application for Medicaid approved since September of last year, and the state didn’t acknowledge it until February. He said they might not be reimbursed past three months, but he’s contemplating filing a fair hearing request to dispute the state’s handling of the case.

In the meantime, the facility has had to borrow money from the bank to meet its immediate financial demands, he said – at an 8% interest rate the state has said isn’t the government’s responsibility to pay back.

Spokesperson for the Department of Public Health and Human Services Jon Ebelt said in an email Thursday the department isn’t responsible for “the business and operational decisions of any independent provider organization.”

George said they have an $80,000 credit line at a local bank, but if they have to borrow to cover for payroll they can hit the limit pretty quickly. He said the owners of the facility have sometimes chipped in their own funds to get payroll covered.

He said their payroll is pretty low all things considered because it’s a small operation. But in a month like May with three pay periods at $27,000 to $29,000, if the facility is short on Medicaid payments for a few patients, that can make a huge difference.

“You get your three payrolls in a month and you’re trying to make that, but you’re also out for three months on your Medicaid, or most of it, it just doesn’t work,” he said.

George says good, hard working people in the health department that are doing their best, but “somewhere there is a breakdown.”

The department has seen some recent turnaround, with Director Mike Randol officially stepping down earlier this month, as reported by the Montana Free Press.

One of the issues George sees is outdated technology, like glitches with the third-party system the state uses for facilities to request reimbursement. He said he pretty regularly has to resubmit claims.

He said the ripple effect he’s seeing is fewer assisted living facilities accepting Medicaid at all, and now patients who need care are turning to facilities that offer more care than they may actually need, like a nursing home, but that accept Medicaid.

Ebelt said the state has provided assisted living facilities assistance in the way of webinars and meetings, with resources available online.

Since April 15 about 13% of cases, or 39,000 members, have not had an initial determination of eligibility, Ebelt said. He said most still have coverage as the department works through processing them, but he did not specify a number.

Ebelt said DPPHS is prioritizing processing cases closed on procedural grounds and is within the 90-day reconsideration period, “which impacts our overall application processing timelines and the number of cases still pending determination.”

Legislators question DPHHS on facility payments

Lawmakers asked questions of Hughes and the department on the results of Hughes’ survey and what was holding up payments for facilities, as well as why some Medicaid members were taken off at all.

Rep. Jennifer Carlson, R-Manhattan, asked Hughes if she could give her an example of how a person who lives in a nursing home would become ineligible for Medicaid if they were qualified for coverage.

“What life circumstances change would cause them to become ineligible for Medicaid while they were living in a nursing home?” she asked.

Hughes said she would have trouble coming up with an example, and said maybe if someone inherited money that could disqualify them. She noted that in the vast majority of redetermination cases, people were found ineligible for procedural reasons, and if they are in a nursing home they are very likely eligible.

Ebelt said the last procedural terminations happened on March 1.

In a statement, DPHHS Director Charlie Brereton said the Medicaid redetermination process is an undertaking required by federal law following the pandemic.

“Through this process, DPHHS has ensured that the safety net doesn’t collapse and remains available for our state’s most vulnerable residents, while also protecting taxpayer-funded programs from intentional or unintentional abuse,” Brereton said.

Hughes told legislators one of the facilities had a resident die waiting to get approved for Medicaid, which can make it almost impossible to get the documents needed to get reimbursed by the state.

Ebelt said in the event of a client’s death, a family must continue to provide all requested information and work with the agency for DPHHS to make an accurate determination.

“DPHHS cannot continue to process the case if additional information is needed,” he said. “Additionally, DPHHS cannot provide information on the reason for a denied or incomplete determination to the provider unless the provider is an authorized representative on the case. If a client is determined eligible, then Medicaid payments are made to the facility as appropriate.”

“Conversely, if an individual is determined ineligible for Medicaid, then payment must be rendered from a different source.”

Ebelt said a comprehensive “closeout report” with the final redetermination data is in the works and will be available in June.

This story originally appeared in the The Daily Montanan, which can be found online at dailymontanan.com.