Insurers continued receiving payments even after beneficiaries moved to other states, the paper reported
As Congress considers cuts in Medicaid funding, The Wall Street Journal reported that Medicaid managed care plans received at least $4.3 billion in duplicate payments over a three-year period, due to recipients who moved from one state to another.
Centene, the largest private Medicaid insurer, collected $620 million in duplicate payments between 2019 and 2021, while Elevance Health received $346 million and UnitedHealth Group took in $298 million, The Journal reported on March 26.
All told, more than 270 insurers received duplicate payments. The paper noted that private insurers handle coverage for 70% of the 72 million Medicaid recipients.
“We may be paying premiums on behalf of an individual who might have moved, and we don’t know that they have moved,” healthcare consultant Caprice Knapp, PhD, told the newspaper. “It definitely is wasteful.”
The reporting was based on an analysis of the Transformed Medicaid Statistical Information System (T-MSIS), a database of beneficiary information maintained by the Centers for Medicare and Medicaid Services (CMS).
In response to a Wall Street Journal article about managed care plans receiving billions in duplicate Medicaid payments, Craig Kennedy, chief executive of Medicaid Health Plans of America, noted how heavily regulated the health insurance industry is. (Photo copyright: LinkedIn.)
Multiple States Paid Double Payments to Medicaid Insurers
“Government guidelines stipulate that if Medicaid recipients move to another state, they are supposed to cancel their coverage in their former state when signing up in the new one, which often gives them a different insurer,” The Journal reported. “But the recipients don’t always cancel, leaving states to play catch-up.”
States paying the highest rates of duplicate payments include Georgia, Florida, and Indiana, according to The Wall Street Journal’s report.
To illustrate how this works, the story used the hypothetical example of a Medicaid recipient in Florida. There, the state pays $291 per month to the private Medicaid insurer. The individual moves to Georgia and enrolls in that state’s Medicaid program. Georgia begins paying an insurer $339 per month. But Florida continues to pay the monthly fee even though the recipient is now receiving medical care in Georgia. (The payment amounts are estimates based on averages in each state, the paper said.)
The state might not know that a beneficiary has moved until it conducts an annual eligibility check, the story noted. In the meantime, insurers “can collect months of payments before a patient is dropped from the rolls.”
To determine if a patient had moved, the analysis looked at where they received medical care. “The data don’t indicate where recipients are actually living or reflect all adjustments later made to payments,” the story noted.
Some insurers criticized the analysis. Most of the three-year period overlapped with the COVID-19 pandemic, when emergency rules made it difficult to disenroll beneficiaries, insurers told The Wall Street Journal. A Centene spokesman said the analysis “ignores the financial safeguards in place to address potential overpayments.” The insurer told the paper that it had repaid $2 billion to the states between 2019 and 2021.
The duplicate payments amounted to $800 million in 2019, then jumped to $1.3 billion in 2020 and $2.1 billion in 2021, the paper reported. KFF, citing CMS data, reported that states spent an estimated $880 billion on Medicaid programs in fiscal year 2023.
Craig Kennedy, chief executive at Medicaid Health Plans of American—an industry group that represents managed care organizations—told The Journal that insurers are closely watched by regulators.
“[Health insurance is] a heavily regulated industry,” Kennedy said. “Following rules and regulations is the No. 1 priority here.”
Office of Inspector General Weighs In
The Wall Street Journal analysis followed an earlier report from the US Department of Health and Human Services’ (HHS) Office of Inspector General (OIG). The OIG report, issued in September 2022, was based on an audit covering Medicaid managed care capitation payments in August 2019 and August 2020. It was also based on data from T-MSIS.
“All 47 States reviewed made capitation payments on behalf of Medicaid beneficiaries who were concurrently enrolled in two States,” the OIG reported. “Specifically, capitation payments were made on behalf of 208,254 concurrently enrolled beneficiaries in August 2019 and 327,497 concurrently enrolled beneficiaries in August 2020. The Medicaid program incurred costs of approximately $72.9 million in August 2019 and $117.1 million in August 2020 for capitation payments associated with beneficiaries in one of the two concurrently enrolled States.”
OIG advised CMS to provide state agencies with T-MSIS enrollment data. CMS dismissed the recommendation, claiming that the Public Assistance Reporting Information System (PARIS), designed to deter improper public assistance payments, was sufficient, and that T-MSIS would add inefficiency and confusion. However, current and former state Medicaid officials told The Wall Street Journal that PARIS “doesn’t always include up-to-date or complete information.”
Dettwyler is set to retire at age 92 after a long career helping clinical laboratories with their coding and billing systems
When William Dettwyler, MT, began working in a clinical laboratory, Harry Truman was president of the United States and scientists had not yet discovered the structure of DNA. Now, as he approaches his 92nd birthday in March, he is finally ready to retire from a career that has spanned more than seven decades, from bench work as a medical laboratory technician (MLT) to assisting labs with their medical coding and medical billing challenges.
Along the way, one of his coding innovations helped the State of Oregon save substantial sums in its Medicaid program. He also helped many medical laboratories increase reimbursement by correcting their coding mistakes. This from someone who left school after eighth grade to help on his family’s farm in rural Oregon.
In an exclusive interview with Dark Daily, Dettwyler discusses his long career and offered pointers for labs on improving their coding and reimbursement procedures.
Back in the 1980s, when he began his consulting work for labs, “they were very poor at billing,” he recalled. “Hospital billing staff didn’t understand lab coding. Reference laboratories didn’t do a good job of picking the right codes or even billing all the codes. Up until around the 1970s, hospitals didn’t even have to bill individual lab procedures with CPT codes. They billed with a revenue center code for all their lab services.”
These days “people are much more sophisticated,” he notes. “There are fewer coding problems compared to what it was in the 1980s and 1990s up to the 2010s.” However, he says he still has a handful of clients who call on his expertise.
“It was not unusual to go to a large university medical center and in three days tell the CFO on my exit review that the following year their lab would bring in about a half million more in revenue, just from my coding review. But I did not reveal to them that I had only gone to the eighth grade in a little one room school and was the lone graduate in my eighth-grade class,” wrote William Dettwyler, MT (above), owner of Codus Medicus in Salem, Ore., in an article he penned for Medical Laboratory Observer. For 75 years Dettwyler worked in the clinical laboratory industry. For much of that time he helped labs all over America improve their coding and reimbursement systems. (Photo copyright: LinkedIn.)
How It All Began
Dettwyler got his first taste of lab work in the early 1950s as a teenager washing glassware for a medical laboratory technician at a local medical practice. A few years later he completed an MLT program at Oregon Institute of Technology in Klamath Falls and landed his first lab tech job at a clinic in Portland.
His entry to consulting came in the early 1970s while he was working for a medical group in Salem. “I was helping the accounting personnel with their billing and noticed that Medicaid was not paying for a common test for syphilis that I was performing,” he recalled. “I contacted Medicaid, and they told me they didn’t understand laboratory procedures.”
After that, “they started to call me frequently with laboratory questions,” he said. “It wasn’t long before they asked me to help them on a part-time basis.” He also assisted with questions related to radiology.
By 1976, Dettwyler was devoting 35 hours a week to assisting the state Medicaid agency while still working as a lab tech.
Simple Hack Ends Overpayments
One of his career highlights came around 1981, when he discovered that the agency was overpaying for some pathology and radiology procedures by as much as 200%.
“Pathologists and radiologists are paid based on whether they are performing the complete procedure—the technical component and the professional component—or just the professional component, where they interpret the results,” he explained.
When billing for just the professional component, the physicians would add two digits to the standard code, so it might come in as 88305-26. However, the state’s computer system could only accommodate a five-digit code, so the state was paying as if the providers had done everything.
“The computer techs said the software couldn’t handle a seven-digit number in a five-digit box, so I devised a way for the computer to read the equivalent of seven digits,” he recalled.
His solution was to modify the codes so that the last digit was an alphabetic character. Instead of billing for code 88305-26, the physicians would bill for 8830F, and the state would pay them correctly.
Around that time, Dettwyler also began assisting a Medicare office in Portland. This forced him to cut back on his work as a lab tech. But he still worked around 60 hours a week.
“For most of my life, I’ve worked three jobs,” he said. “Work is my hobby.” He also had a large family to support—by 1976, he and his wife had 10 kids.
Transition to Lab Consulting
In 1986, the state was facing a budget shortfall and cut its Medicaid consultants, so Dettwyler decided to seek consulting work with labs while continuing to work at the bench.
“I really liked the coding because I had very little competition,” he said. “But I wanted to keep working in the laboratory mainly to understand the problems.”
While working for the state, Dettwyler attended coding seminars and workshops. He noticed that labs were losing revenue due to poor billing practices. “They didn’t understand all the coding complexities, so they really hungered for this kind of assistance.”
But first, he had to find clients. So he partnered with another lab tech who was offering similar consulting services.
Business picked up after Dettwyler contributed an article to the trade publication Medical Laboratory Observer about his process, which he calls “procedure code verification and post payment analysis.”
“That went like gangbusters,” he said. “We started getting calls from all over the country.”
Dettwyler later split from his partner and went to work on his own.
“I would sit down with the person who was responsible for coding, usually the lab or radiology manager,” he explained. “We would go over the chargemaster and cover every procedure to make sure the code and units were correct. When I was done, I would give them a report of what codes we changed and why we changed them.”
Beginning in 1989, he signed on as a contractor for another consultancy, Health Systems Concepts on the East Coast, where he remained until 2019.
Advice to the Current Generation
What is Dettwyler’s advice for someone who wants to follow in his footsteps and assist labs with their coding? “I wouldn’t recommend it now,” he said. “There’s less need for that kind of assistance than in the past.”
However, he does find that labs still run into problems. The greatest need, he says, is in molecular diagnostics, due to the complexity of the procedures.
In addition, labs are sometimes confused by coding for therapeutic drug monitoring, in which a doctor is gauging a patient’s reaction to a therapy versus screening for substance abuse. “Those issues are often misunderstood,” he said.
Microbiology also poses coding challenges, he noted, because of the steps required to identify the pathogen and determine antibiotic susceptibility. “It requires quite a bit of additional coding,” he said. “Some labs don’t understand that they can’t just bill a code for culture and sensitivity. They have to bill for the individual portions.”
Labs that work with reference labs also have to be careful to verify codes for specific procedures. “I’ll review the codes used by reference labs and, surprisingly, they’re not always correct. Reference labs sometimes get it wrong.”
If someone does want to become a coding expert, Dettwyler suggests that “they should first have experience as a lab tech, especially in microbiology, because of the additional coding. And they should try to work with somebody who is already doing it. Then, they should work with the billing department to learn how it operates.”
He also advises clinical laboratory managers to follow the latest developments in the field by reading lab publications such as The Dark Report. “You have to do that to keep current,” he said.
Despite never completing high school, Dettwyler eventually received his GED and an associate degree. “But the degrees didn’t really help me,” he said. “Much of it was on-the-job training and keeping my eyes open and listening.”
Study findings highlight financial impact underinsured have on healthcare providers, including clinical laboratories and pathology groups
Commonwealth Fund’s 2024 Biennial Health Survey released in November shows that not only are Americans underinsured, but many are swimming in medical debt. This is not good news for clinical laboratories. Simply put, labs must collect deductibles, copays, and out of pocket amounts from insured patients. If the patient is underinsured, that means the lab probably has to collect more—even 100%—of total charges directly from the patient.
The study conducted between March and June of 2024 collected data from 8,201 respondents ages 18-64, and despite two of every three respondents carrying health insurance through their employers, one of every four is underinsured, according to a Commonwealth Fund news release.
A further 44% of respondents have medical debt, with one of every four calling their out-of-pocket payments “nearly unaffordable,” the news release notes. Additionally, one out of five had a gap in coverage during the year.
“Congress, employers, insurers, and healthcare providers all play a role in lowering costs and making care more affordable, so families can avoid debt and get the care they need to stay healthy,” said Sara R. Collins, PhD, lead study author and Commonwealth Fund Senior Scholar and Vice President for Health Care Coverage and Access and Tracking Health System Performance, in the news release.
Astute laboratory managers will look beyond the study’s face value and consider the profound impact such findings could have on their own labs.
“While having health insurance is always better than not having it, the findings challenge the implicit assumption that health insurance in the United States buys affordable access to care,” the Commonwealth Fund said of its 2023 study. This sentiment rings true in the Funds’ latest findings as well.
“The Affordable Care Act has covered 23 million people and cut the uninsured rate in half. But high costs are a serious problem for many Americans, regardless of the kind of insurance they have,” said Sara R. Collins, PhD (above), lead study author and Commonwealth Fund Senior Scholar and Vice President for Health Care Coverage and Access and Tracking Health System Performance, in a news release. Clinical laboratories and anatomic pathology groups are greatly affected by underinsured patients. (Photo copyright: Commonwealth Fund.)
Labs Often Must Collect Payments Upfront
Many patients are in high deductible health plans and may forgo or delay ordered lab tests. Labs collect patient deductibles, copays, and out-of-pocket expenses directly from patients. However, underinsured patients may be required to pay for 100% of the services they receive, requiring the lab to collect these payments upfront.
Underinsured patients already facing a mountain of debt may struggle to pay for lab services. The debt many owe is substantial. “Nearly half (48%) of all adults with medical debt owe $2,000 or more; one of five (21%) carry a staggering $5,000 or more in debt,” Commonwealth Fund noted in its study.
Thus, collecting money owed is proving to be a problem for healthcare providers. Patient collection rates are plummeting to 48%, with “providers writing off more bad debt from patients with insurance,” TechTarget reported.
“Lower patient collection rates left providers facing bad debt. The analysis showed that 1.54% was the bad debt write-offs as a percentage of total claim charges in 2023. Researchers note that the percentage may be small, but the total cash amount equated to over $17.4 billion last year,” TechTarget added.
Having some rather than no insurance is not the safety net for patients previously thought. When it comes to the insured, their debt “accounts for 53% of the estimated $17.4 billion that hospitals, health systems, and medical practices wrote off as bad debts in 2023,” Business Wire noted, citing data from Kodiak Solutions’ quarterly revenue cycle benchmarking report.
Delaying Critical Lab Tests
The challenges the insured face with debt impacts labs in the long run. A staggering 57% of survey respondents reported passing on needed care because they could not afford it, and of those, 41% said their health concerns worsened when they denied themselves that care, Commonwealth Fund noted.
Increasingly poor health means patients might struggle to collect sufficient income to pay for their now added expenses, further causing them to struggle to pay for anything insurance might not cover, such as doctor ordered lab tests.
The affect this has on hospitals and medical laboratories casts light on the healthcare marketplace as a whole. It’s a trend that needs to be further studied.
“Most hospital bad debt is associated with insured patients, and nearly one in three hospitals report over $10M in bad debt,” are two of the top five financial healthcare statistics reported by Definitive Healthcare in a 2023 report.
“Expanding patient collection strategies may be key to maximizing revenue and avoiding losses,” TechTarget suggested.
Possible Solutions
The Commonwealth Fund study made clear that employer-covered healthcare does not guarantee affordable care or that ample care will be provided. Possible solutions from the study called on policymakers to “expand coverage and lower costs for consumers.” It added that “extending enhanced premium tax credits and strengthening protections against medical debt could make coverage more protective and affordable.”
Until a solution can be found, it’s wise to stay abreast of this trend and how it can impact the bottom line of clinical laboratories and anatomic pathology groups nationwide.
Are ongoing protests and federal investigations into health plan practices evidence that customers have reached a tipping point?
It is not common for beneficiaries to get arrested in front of their health plan’s headquarters. But that is what happened in July, when protesters gathered outside of UnitedHealth Group (UHG) in Minnetonka, Minn., to stress their dissatisfaction with the health insurer. More than 150 protesters participated in the demonstration. Eleven were arrested and charged with misdemeanors for blocking the public street outside of the headquarters.
Their main complaint is that the insurer systemically denies care for patients. This is a situation that probably resonates with hospitals, physicians, clinical laboratory professionals, and pathologists, who often see their own claims denied by health plans, including UnitedHealthcare.
“UnitedHealth Group’s profiteering by denying care is a disgrace, leaving people across Minnesota and all of the United States without the care they desperately need,” wrote members of the People’s Action Institute in a letter to UHG’s CEO Sir Andrew Witty. People’s Action organized the protest as part of its Care Over Cost campaign.
“Health insurance coverage has expanded in America, but we are finding it is private health insurance corporations themselves that are often the largest barrier for people to receive the care they and their doctor agree they need,” Aija Nemer-Aanerud, campaign director with People’s Action told CBS News.
“We have asked UnitedHealthcare for systemic changes in their practices and they have refused,” he told Bring Me The News.
Nemer-Aanerud told CBS News that UnitedHealth Group leadership has “refused to acknowledge that prior authorizations and claim denials are a widespread problem.”
“Our mission is to help people live healthier lives and help make the health system work better for everyone,” said UnitedHealth Group CEO Sir Andrew Witty (above) during a Senate Finance Committee hearing in May, NTD reported. “Together, we are working to help enable our health system’s transition to value-based care and are empowering physicians and their care teams to deliver more personalized, high-quality care that delivers better outcomes at a lower cost.” (Photo copyright: The Business Journals.)
People’s Action Institute Demands
In the letter, the changes People’s Action urged UHG to make include:
Ceasing to deny claims for treatments recommended by medical professionals.
Overturning existing denials for recommended treatments.
Stopping the practice of using Artificial Intelligence (AI) and algorithms to deny claims in bulk.
Executing a publicly shared audit and reimbursing federal/state governments for public money diverted by claims and prior-authorization denials within Medicare and Medicaid systems.
Expediting payment of claims.
Making public the details of denied claims and prior authorizations by market, plan, state, geography, gender, disability and race.
A spokesperson for UnitedHealth Group told CBS News that the company has had several talks with People’s Action and has settled some of the organization’s issues. That spokesperson also confirmed that UHG tried to discuss specific cases, but the issues People’s Action brought up had already been resolved.
“The safety and security of our employees is a top priority. We have resolved the member-specific concerns raised by this group and remain open to a constructive dialogue about ensuring access to high-quality, affordable care,” UnitedHealthcare said in a statement.
Profits over Patients?
The People’s Action Institute is a national network of individuals and organizations who strive to help people across the US overturn medical care denials made by insurance giants. Its Care Over Cost campaign aims to influence insurers to initiate systemic changes in their practices.
The recent protest occurred as UnitedHealth Group released its second-quarter financial report claiming $7.9 billion in profits. The company provides health insurance for more than 47 million people across the country and took in $22.4 billion in profits last year.
“UnitedHealth Group’s $7.9 billion quarterly profit announcement is the result of a business model built on pocketing premiums and billions of dollars in public funds, then profiting by refusing to authorize or pay for care,” said Nemer-Aanerud in a press release. “People should not have to turn to public petitions or direct actions to get UnitedHealthcare to pay for the care they need to live.”
“UnitedHealth Group made a decision to spend billions of dollars on stock buybacks, lobbying, and executive pay instead of paying for care people need,” Nemer-Aanerud told Bring Me The News. “They are harming people for profit and should be held accountable for that choice.”
“We all pay for this convoluted system, whether it is in our health insurance premiums or in our public programs. UnitedHealth Group is making billions of dollars in profit by denying people care, including in privatized Medicare and Medicaid plans, to the point that it has prompted a federal investigation … Still, we left the meeting with hope,” they added.
Protests like this one against UnitedHealth Group serve as evidence that the current system of commercial health insurance plans could be deteriorating. This descent may cause customers of these plans to take unprecedented actions to fight for necessary medical care.
As noted earlier, hospitals, physician groups, clinical laboratories, and anatomic pathology groups that see their own claims often denied by health insurers without a clear reason for the denials are probably sympathetic to the plight of patients who are frustrated with how UnitedHealthcare denies their access to care.
Theranos founder and former CEO continues down the path she began by defrauding her investors and lying to clinical laboratory leaders about her technology’s capabilities
As a result of the ban, Holmes is “barred from receiving payments from federal health programs for services or products, which significantly restricts her ability to work in the healthcare sector,” ARS Technica reported.
So, Holmes, who is 39-years old, is basically banned for life. This is in addition to her 11-year prison sentence which was paired with $452,047,200 in restitution.
“The exclusion was announced by Inspector General Christi Grimm of the Department of Health and Human Services’ Office of Inspector General,” ARS Technica noted, adding that HHS-OIG also “excluded former Theranos President Ramesh “Sunny” Balwani from federal health programs for 90 years.” This is on top of the almost 13-year-long prison sentence he is serving for fraud.
“The Health and Human Services Department can exclude anyone convicted of certain felonies from Medicare, Medicaid, and Pentagon health programs,” STAT reported.
“Accurate and dependable diagnostic testing technology is imperative to our public health infrastructure,” said Inspector General Christi Grimm (above) in an HHS-OIG statement. “As technology evolves, so do our efforts to safeguard the health and safety of patients, and HHS-OIG will continue to use its exclusion authority to protect the public from bad actors.” Observant clinical laboratory leaders will recognize this as yet another episode in the Elizabeth Holmes/Theranos fraud saga they’ve been following for years. (Photo copyright: HHS-OIG.)
Why the Ban?
“The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) cited Holmes’ 2022 conviction for fraud and conspiracy to commit wire fraud as the reason for her ban,” The Hill reported.
“False statements related to the reliability of these medical products can endanger the health of patients and sow distrust in our healthcare system,” Grimm stated in the HHS-OIG statement, which noted, “The statutory minimum for an exclusion based on convictions like Holmes’ is five years.
“When certain aggravating factors are present, a longer period of exclusion is justified,” the statement continued. “The length of Holmes’ exclusion is based on the application of several aggravating factors, including the length of time the acts were committed, incarceration, and the amount of restitution ordered to be paid.”
Rise and Fall of Elizabeth Holmes
Readers of Dark Daily’s e-briefs covering the Holmes/Theranos fraud saga will recall details on Holmes’ journey from mega success to her current state of incarceration for defrauding her investors.
In November 2022, she was handed an 11-year prison sentence for not disclosing that Theranos’ innovative blood testing technology, Edison, was producing flawed and false results. Theranos had “raised hundreds of millions of dollars, named prominent former US officials to its board, and explored a partnership with the US military to use its tests on the battlefield,” STAT reported.
To get Holmes physically into prison was a journey unto itself. At one point, evidence showed her as a potential flight risk. “In the same court filings, prosecutors said Holmes and her partner, William Evans, bought one-way tickets to Mexico in December 2021, a fact confirmed by her lawyers,” Dark Daily’s sister publication The Dark Report revealed in “Elizabeth Holmes’ Appeal Questions Competence of CLIA Lab Director.”
Drama around her move into prison continued. “The former CEO’s attorneys are making last-minute legal moves to delay her prison sentence while she appeals her guilty verdict,” Dark Daily reported.
At the same time, Holmes appeared to be on a mission to revamp her public image.
In the Times piece, Holmes talked about her plans to continue to pursue a life in healthcare. “In the story, Holmes contended that she still thinks about contributing to the clinical laboratory field. Holmes told The Times that she still works on healthcare-related inventions and will continue to do so if she reports to prison,” The Dark Report covered in “Elizabeth Holmes Still Wants ‘To Contribute’ in Healthcare.”
In the meantime, her legal fees continued to mount beyond her ability to pay. “Holmes’ prior cadre of lawyers quit after she could not compensate them, The Times reported,” The Dark Report noted. “One pre-sentencing report by the government put her legal fees at more than $30 million,” according to The New York Times.
Apparently, this closes the latest chapter in the never-ending saga of Elizabeth Holmes’ fall from grace and ultimate conviction for defrauding her investors and lying to healthcare executives, pathologists, and clinical laboratory leaders.
