Uncertainty Reigns in Texas Transition to Medicaid Managed Care

Tens of thousands of Texans rely on home health care agencies to provide them with the care and assistance they need to stay well and maintain a sense of independence. In most cases, these patients are covered under a Medicaid plan that pays for the majority of their home health care expenses.

Recently, Texas transitioned to a managed care model for Medicaid patients. In March 2012, the state completed that transition, shifting approximately 1.1 South Texas patients into health maintenance organizations. The majority of these patients live in poor, rural areas.

Though the change was intended to save money and streamline care, it has not been without its problems. After the shift, some HMOs started losing money. They passed some of those losses on to home health care providers in the form of reduced reimbursement rates. In the ensuing months, many home health care organizations have been left wondering about their long-term viability.

Patient Surge Threatens Reimbursement

One of the most pressing problems hit in July 2012, when Molina Healthcare announced that it would significantly reduce reimbursement rates. At that time, the company's chief financial officer said the HMO had been losing $14 million per month since it expanded into the South Texas Medicaid market.

What followed was a mass exodus of home health care patients from Molina to one of the four other managed care plans that serve Medicaid patients in South Texas. As of early October, approximately 11,400 patients had left Molina for another plan. Most made the switch because they wanted to maintain their relationship with their current home health care provider.

The influx of home health care patients has left the remaining managed care plans struggling to keep up with paperwork and provider reimbursements. This means that many home health agencies are providing care with the hope - but no promise - that they will eventually be paid for their work. A spokesperson for one home health agency told the New York Times that as many as 70 percent of its Medicaid patients were being cared for without prior authorization from a health plan. The agency had to take out a credit line worth millions of dollars just to keep up with its payroll.

How a Health Care Attorney Can Help

Both state officials and the participating managed care plans have assured providers that they will be reimbursed. However, without formal prior authorization, home health agencies say it is hard to know for certain what will happen.

Texas home health agencies have a number of options when it comes to seeking reimbursement from managed care organizations and health insurance companies. In some cases, health care organizations can benefit from filing a complaint with the Texas Health and Human Services Commission. In other cases, home health agencies may want to take legal action against the HMO.

It is also important to consider all of the other issues that come along with Texas' transition to managed care for Medicaid patients. Staying on top of regulatory compliance, licensing, employment issues and long-term business plans can help home health agencies emerge from the transition in a strong position.

Consulting with an experienced health care attorney can help home health agencies stay poised during this period of change.

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