Amid complaints, Texas panel scrutinizes companies who run Medicaid


Medicaid families have reported being denied services by managed care organizations.

Managed care organizations denied many of those concerns.

Texas Health and Human Services Commission is working to increase oversight of managed care organizations.

For-profit companies paid by the state to coordinate services for Medicaid patients have denied disabled Texans critical care, advocates and families told state lawmakers Wednesday.

The House General Investigating and Ethics Committee and a subcommittee of the House Appropriations Committee heard hours of testimony, including from the Texas Health and Human Services Commission and the private companies called managed care organizations, who denied many of the concerns that families and advocates raised.

For nearly two decades, the state has been turning over Medicaid services and decision-making to managed care organizations, a move that has saved the state billions of dollars. Children with disabilities covered by Medicaid were rolled into managed care Nov. 1, 2016, and since then, parents have made thousands of complaints to the state health commission, including about medication, equipment, nursing care, therapies and other medical services being denied.

“The people that have suffered because of not getting the care that they need feel (managed care companies are) pointing fingers and saying, ‘We didn’t do anything wrong,’” said state Rep. Sarah Davis, R-West University, who heads the committee and subcommittee.

The American-Statesman and other media have published stories of Texas children with disabilities being denied Medicaid services by managed care companies.

Wednesday’s committee hearing was prompted by a Dallas Morning News series this month about a variety of problems with managed care, from inadequate numbers of doctors in networks to lavish spending by managed care companies.

Families highlighted in the series told lawmakers about their struggles. Linda Badawo of Dallas said her son became brain dead after the managed care company Superior HealthPlan had denied him round-the-clock nursing services even though he had problems with pulling out a tube that helps him breathe. Caroline Cheevers of Houston said her son was hospitalized after he was suddenly denied a prescription antibiotic he had been taking. Both women adopted their children from Texas foster care.

“It’s exceptionally frustrating having to spend this much time fighting for something that they should be getting without an issue,” Cheevers said.

Company representatives stood by their decisions in Cheevers’ and Badawo’s cases and told lawmakers their hands are tied by federal regulations as well as their contracts with the state. Medicaid requires managed care organizations to provide patients with medically necessary services.

Parents can appeal companies’ denials with the state, but the officers who oversee appeals don’t have medical backgrounds, said David Harmon with Superior HealthPlan.

“There are always opportunities for improvement,” Harmon said.

Former health commission employee Nancy Toll told lawmakers that the state has reduced fines for the managed care companies for not complying with their contracts or state and federal regulations.

“One of the problems was that I was told that if we implemented all of those fines, I would put the managed care organizations out of the business. If we can’t punish them … then how are any changes going to take place?” said Toll, who was in charge of a team of nurses at the state agency to ensure patients are getting care under managed care.

LeAnn Behrens with AmeriGroup said the company has paid $20 million in fines to the state and hasn’t used lobbyists to appeal to lawmakers to persuade the state to lower fines, a concern Toll had raised. Other companies said they weren’t using lobbyists either.

Managed care companies must send some of their profits exceeding 3 percent to the state. The amount the company must send back to the grows as its profits grow.

The health commission defended its oversight of managed care organizations, pointing to data that shows the agency has assessed more fines each year. In 2009, the agency assessed $1.6 million in liquidated damages and in the first three quarters of 2017, the agency assessed $27.4 million.

The agency freed up $4.5 million to add 98 employees over the next two years to increase contract oversight.

In March, the health commission requested that the inspector general’s office conduct an audit into managed care and denial of services for children with severe disabilities. The audit isn’t completed yet.

“Our relationship with (managed care organizations) is one of partnership with accountability. In the past, the agency has focused too much on partnership and not enough on accountability,” said Enrique Marquez with the state health agency. “There is no doubt that we have work to do.”

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