Deny, Deny, Deny: Medicaid Administrative Vendors Come Under Fire

The program has grown so much in recent years that claims adjudication is outsourced. There’s more money to be made in denying care, than approving it.

So how do Medicaid managed care health plans administer all that new business they’ve gotten since the passage of the ACA? An interesting story today by Kaiser Health News (KHN) offers some insight into at least one disquieting solution. Many Medicaid managed care plans outsource their claims denial processes to vendors.  

KHN got hold of a whistleblower complaint against a company called Agilon Health, which is owned by a private equity company. Medi-Cal, California’s Medicaid program, investigated and found that Agilon, paid to administer care for about 400,000 Medicaid patients, delayed care for at least 1,400 of them. 

KHN reports: “Government oversight, not rigorous to begin with, fades as taxpayer money filters down through layers of companies eager to seize on Medicaid’s substantial growth under the Affordable Care Act. Medicaid officials say they have authority only over the health plans, not their subcontractors.”

Ron Kuerbitz, Agilon’s chief executive, counters that while there may have been some delays in care, there were no unjustified denials. 

As KHN reports, Agilon is not the only company to come under scrutiny. And the problem is growing along with managed care’s footprint in Medicaid.

“Nearly three-quarters of the 73 million low-income Americans on Medicaid are now in managed care, in which states pay health insurers fixed monthly amounts for each enrollee to cover the range of services they need,” KHN reports.