Audit: Md mishandled mental health services payment contract



Maryland state health officials botched oversight of a vendor they hired to pay mental health providers, causing accounting nightmares for clinicians and delays in care for patients in crisis, according to an audit released Friday by the state’s Department of Legislative Services.

Auditors found the state health department failed to properly review Optum before hiring the UnitedHealth Group subsidiary to process claims for Medicaid or government-funded behavioral health care. State health officials have also chose not to assess damages as allowed by the contract, in part because they feared litigation.

Mismanaged payments and delays meant that health workers spent hours on administrative tasks instead of helping patients amid soaring demand in the pandemic era. Mental Health services. Some have been unable to take on new clients while others have lost staff to less financially precarious jobs.

When it became clear in early 2020 that Optum could not process claims quickly and accurately, vendors received estimated fees based on 2019 invoices. Many were overpaid for their 2020 work after the pandemic forced them to cut expenses and had to pay back the difference. The discrepancy left some in debt even as other claims went unaddressed.

State Senator Clarence K. Lam (D-Howard), physician and Senate Chairman of the Joint Audit and Evaluation Committee, in a statement titled the episode recalling the state’s purchase of 500,000 faulty coronavirus tests of South Korea, and its struggling supply masks and ventilators from Blue Flame Medical.

“The level of waste and incompetence uncovered by this audit is disgusting and an indictment of the Department’s current broken leadership,” he said.

Optum spokesman Aaron Albright said in a statement that the company has improved: “While we recognize that the system fell short of expectations in January 2020, we have been working closely with the state and the supplier community to resolve these issues”.

Health Department Secretary Dennis R. Schrader posed questions on Friday to Health Department spokesman Chase Cook, who said in an email that the department “has already made significant changes to our internal sourcing process and moving forward with additional organizational changes.”

A spokesman for Gov. Larry Hogan (R) declined a request for an interview.

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Health department officials said they agree with most of the auditors’ findings and recommendations and plan to act on some now and others in two years when Optum’s contract ends.

State officials awarded the contract in 2019 despite concerns about Optum’s track record after the company underbid incumbent contractor Beacon Health Options by $72.1 million.

“I don’t see many places where [Optum provides] this type of administrative service, organizing services on behalf of governments,” State Comptroller Peter Franchot (D) said, before finally voting to approve the contract at a Public Works Board meeting. in July 2019.

Schrader, then the health department’s chief operating officer, said his agency had done “a lot of due diligence on this.” He said that Optum was not only the lowest bidder, but that its proposal was evaluated as the best on technical aspects.

The audit indicated that the Crown’s evaluation of proposals did not include an adequate review of Optum’s experience, qualifications and previous subcontractors. Auditors found that state officials also failed to adequately review a key contractor, InfoMC, who would be responsible for the most critical aspect of the contract, the claims handling system. In 2018, an Ohio county mental health board withdrew from its contract with InfoMC, for failing to process requests satisfactorily. The audit report indicates that the California and Washington health departments are also facing serious issues with InfoMC. A company employee said Friday that she would forward a request for comment to company officials, but they did not immediately respond.

State officials did not ensure that the complaints-handling system was working before its launch in January 2020, according to the audit. The system was unable to process health care service authorizations, falsely denied valid requests, and was unable to generate payment information using standard reporting forms from the healthcare industry, the auditors said.

The deficiencies have led Opt to make $1.06 billion in payments in 2020 based on estimates from the previous year. Since then, doctors, advisers and hospitals have had to reconcile estimated payments with actual claims and settle the difference.

Lori Doyle, director of public policy for the Community Behavioral Health Association of Maryland, which represents 105 organizations, said the audit confirms service providers have been sounding the alarm for two years. At every turn, she said, the state and Optum blamed providers who have decades of experience filing electronic claims.

“It’s like we cried in the dark,” she said in a phone interview on Friday. “It’s been a disaster from the start.”

Providers hired clerical workers to navigate Optum’s faulty systems using money that would otherwise have been spent on clinical staff, she said. Providers serve low-income adults and children who receive Medicaid and do not have many options for mental illness and addiction treatment; clients often endure poverty and food insecurity.

Doyle said problems with Optum hit right at the start of the pandemic, shutting down many providers and making it impossible for many patients to access services.

“It was a double: the pandemic and Optum,” she said.

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Sondra Tranen, executive vice president of Partnership Development Group Rehabilitation Services, a community behavioral health care company serving Baltimore City and County and Montgomery and Prince George counties, said in an interview Friday that delays in reimbursement prevented clinicians from assuming the financial risk of taking on new patients.

The CEO serves approximately 1,200 people a year for psychiatric rehabilitation, targeted case management and therapy. Many are adults with serious mental illness who have often been in the public mental health system all their lives and are at high risk of hospitalization.

Because Optum failed to honor the contract, auditors said, the state did not collect the full damages it is entitled to as officials fear it could trigger litigation or lead to deterioration. additional performance of Optum.

In late 2020, state health officials informed Optum that it had still not delivered a working system, auditors said. The contract allows the state to collect $25,000 per day for Optum’s failure to be operational. These and other damages would amount to $20.5 million, but the state has refused to recover them, according to the audit.

Karen Carloni, executive director of the Southern Maryland Community Network, which provides community behavioral health services in Calvert, Charles and St. Mary’s counties, said the payments debacle has left her mission-driven employees feeling underwhelmed. -assessed.

“I hope a new administration will take the time…to look back and understand what happened so that we don’t make the same kind of mistake again,” she said.


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