States Balk At Terminating Medicaid Contracts Even When There's Fraud Or Poor Patient Care

States are increasingly turning to insurance companies to provide coverage for people on Medicaid in hopes of saving money and improving care.

In Florida, a national managed care company’s former top executives were convicted in a scheme to rip off Medicaid. In Illinois, a state official concluded two Medicaid plans were providing “abysmal” care. In Ohio, a nonprofit paid millions to settle civil fraud allegations that it failed to screen special needs children and faked data.

Despite these problems, state health agencies in these - and other states - continued to contract with the plans to provide services to patients on Medicaid, the federal-state program for the poor and disabled. States are increasingly turning to insurance companies to provide coverage for people on Medicaid in hopes of saving money and improving care. Health care experts say that’s because states are reluctant to drop Medicaid plans out of fear of leaving patients in a bind.

“You probably won’t find many examples of states flat out pulling the plug. That’s sort of the nuclear option,” said James Verdier, a senior fellow at Mathematica Policy Research, a nonpartisan think tank. “There are all sorts of sanctions you can impose — financial penalties, limitations on enrolling new beneficiaries. States will almost always use those sanctions to work with a plan and try and get them up to speed, to the extent they can.”

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Source: Kaiser Health News