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Health services contracts spur questions

Ralph B. DavisHeartland News Service

August 21, 2012


Lawrence Messina


Associated Press


CHARLESTON (AP) — West Virginia lawmakers say last week’s interim study meetings raised several red flags about multimillion-dollar contracts awarded through the Department of Health and Human Resources.


A House-Senate oversight committee learned that the department has spent millions on a nonprofit firm, the Delmarva Foundation, to monitor the performance of three companies that help provide Medicaid services. Those three companies also have received multimillion-dollar contracts.


Department Deputy Commissioner Tina Bailes said Delmarva is paid around $600,000 a year. State auditor’s office records show Delmarva has received $5.5 million since 2005.


But committee members questioned what, if anything, has been done with Delmarva’s annual reports that show sub-par and in some cases worsening performances by these companies.


“Somebody’s not doing their job here,” said Delegate Bobbie Hatfield, D-Kanawha and a nurse. “It comes down to somebody or a group of people saying, ‘Look, we have a problem here. What have you done to implement, to change these statistics. Who does that fall on?’”


The three companies — Carelink Health Plans, The Health Plan of the Upper Ohio and Unicare — operate the managed care portion of the Medicaid program. Managed care is similar to health maintenance organizations, or HMOs, found in private insurance. It’s an alternative to the traditional route of paying a fee for each doctor visit, medical test or procedure.


Known as Mountain Health Trust, Medicaid’s managed care portion covers around 170,000 people. Services provided by the three companies totaled $343 million during the just-completed budget year, according to department officials.


Figures presented by Bailes and Marci Kramer, a Delmarva representative, showed how the health of those recipients has changed year-to-year. While managed care aims to control cost, advocates say its main goal is improving health by developing care plans and encouraging such basic steps as making doctor appointments and taking prescriptions.


Co-Chair Don Perdue cited how all three companies have yet to reach a national benchmark for improving the health of people with diabetes, while one has lost ground each year since 2009. The Wayne County Democrat noted the severity of that chronic ailment in the state; West Virginia ranks second in the county for its rate of diabetes among adults, according to the nonprofit Trust for America’s Health.


“And you said we have not raised any flags over that, we haven’t brought any kind of censures or brought any kind of action to that issue. That’s a little disturbing to me,” Perdue told Bailes. “If we’re going to spend $600,000 on something to tell us what’s going on, and we see this and there’s no response, it tells me either we don’t need to do the contract, or we need to do it ourselves at a much lower rate, if we’re not going to use it anyway.”


Bailes said the agency’s only real option is to cancel a contract and find a different company to run the program.


“This is certainly a good opportunity for the plans to consider a performance improvement project surrounding the diabetes measures,” Bailes said. “So, while this gives us an opportunity to look at that, and improve upon that, there are no sanctions that are tied directly to that measure, per se.”


Kramer said people on managed care share some of the burden for the outcomes shown in the annual performance reports. But Perdue questioned that view, saying other states were finding ways to meet the benchmarks.


“We’ve had three years to get there, and we’re not getting there. … There’s some kind of disconnect between your report and what gets done about it,” Perdue said.


The concerns raised by Perdue, Hatfield and other committee members followed the release of a legislative audit that criticized the department’s handling of another Medicaid-related contract.


The Bureau of Medical Services, which oversees Medicaid, is trying to issue the latest version of a six-year contract for the electronic system that processes claims and oversees records for the health care program. The contract is among the largest awarded by state government, currently costing $20 million a year. But the bureau has twice had to cancel the seeking of bids for this Medicaid Management Information System, including once because of a possible conflict of interest.