Poorly managed payments and delays meant healthcare workers spent hours on administrative tasks rather than helping patients amid a pandemic-era spike in demand. mental health services. Some were unable to accept new clients, while others lost staff for less financially precarious jobs.
When it became clear in early 2020 Since Optum was unable to process claims quickly and accurately, providers were paid estimated rates based on 2019 invoices. Many were overpaid for their 2020 work after the pandemic forced them to cut back and they had to pay the difference. The discrepancy left some in debt even as more claims went unprocessed.
State Sen. Clarence K. Lam (D-Howard), a physician and Senate chairman of the Joint Audit and Evaluation Committee, in a statement called the episode reminiscent of the state’s purchase of 500,000 faulty coronavirus tests of South Korea, and his problematic acquisitions of masks and ventilators from the firm Blue Flame Medical.
“The level of waste and ineptitude uncovered by this audit is revolting and an indictment of current broken leadership in the Department,” he said.
Optum spokesman Aaron Albright said in a statement that the company has improved: “While we recognize that the system did not meet expectations in January 2020, we have worked closely with the state and the provider community to address those problems.”
State Health Secretary Dennis R. Schrader referred questions Friday to health department spokesman Chase Cook, who said in an email that the department “has already made significant changes to our internal procurement process and is moving forward with additional organizational changes.”
A spokesman for Gov. Larry Hogan (R) declined an interview request.
Health department officials said they agree with most of the auditors’ findings and recommendations and plan to act on some now and another 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 the current contractor, Beacon Health Options, by $72.1 million.
“I’m not… seeing a lot of places where [Optum provides] this type of administrative service, organization services on behalf of governments,” State Comptroller Peter Franchot (D) said, before ultimately voting to approve the contract at a July 2019 Public Works Board meeting.
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 highest bidder, but that his proposal had been evaluated as the best in technical aspects.
The audit said the state’s evaluation of the proposals did not include an adequate review of Optum’s prior experience, qualifications and subcontractors. The auditors found that state officials also failed to adequately examine a key subcontractor, InfoMC, which would be responsible for the most critical aspect of the contract, the claims processing system. In 2018, a county mental health board in Ohio terminated its contract with InfoMC for failing to satisfactorily process claims. The audit report said the California and Washington health departments also faced serious problems with InfoMC. A company employee said Friday that she would pass a request for comment to company officials, but they did not immediately respond.
State officials failed to ensure the claims processing system was working prior to its launch in January 2020, according to the audit. The system failed to process authorizations for health care services, improperly denied valid claims and failed to generate payment information using standard health care industry reporting forms, the auditors said.
The shortcomings caused Elect to make $1.06 billion in payments during 2020 based on prior year estimates. Since then, doctors, consultants and hospitals have had to reconcile estimated payments with actual claims and settle the difference.
Lori Doyle, director of public policy for the Maryland Community Behavioral Health Association, which represents 105 organizations, said the audit confirms that alarm service providers have been going off for two years. Throughout, she said, she, the state and Optum blamed providers who have decades of experience filing electronic claims.
“It feels like we’ve been crying in the dark,” he said in a phone interview on Friday. “This has been a disaster from the beginning.”
Providers hired clerks to navigate Optum’s faulty systems using money that would otherwise have been spent on clinical staff, he said. Providers serve low-income adults and children who receive Medicaid and do not have many options for treatment of mental illness and substance abuse; clientele they often endure poverty and food insecurity
Doyle said the problems with Optum arose just as the pandemic began, closing many providers and making it impossible for many patients to access services.
“It was a double whammy: the pandemic and Optum,” he said.
Sondra Tranen, executive vice president of Partnership Development Group Rehabilitation Services, a community behavioral health care business serving Baltimore City and County and Montgomery and Prince George’s counties, said in an interview Friday that delayed reimbursements they made it impossible for doctors to bear the financial risk. to accept new patients.
PDG sees about 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 their entire lives and are at high risk of hospitalization.
Since Optum reneged on the contract, auditors said, the state has not collected the full damages it is entitled to because officials feared it would trigger litigation or cause Optum’s performance to suffer even more.
In late 2020, Optum was informed by state health officials that it had not yet provided a working system, the auditors said. The contract allows the state to collect $25,000 per day in the event that Optum is not operational. These and other damages would total $20.5 million, but the state refused to collect 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 counties, said the pay debacle made her mission-driven employees feel undervalued.
“I hope that 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,” he said.
