As Medicaid Denials Surge, Some Question Optum Assessments

As Medicaid Denials Surge, Some Question Optum Assessments
Luke Mattingly, president and CEO of CareLink, says changes in eligibility determinations hurt patients and his bottom line. (Karen E. Segrave)

Arkansas in-home service providers say changes in Medicaid rules are hurting them and their elderly clients.

Hundreds of Medicaid beneficiaries in the ARChoices program were denied benefits this year for in-home care, said Luke Mattingly, president and CEO of CareLink of North Little Rock, a nonprofit that serves elderly clients in and around Pulaski County. The in-home services include meal-making, bathing and light housekeeping.

Out of the 2,431 current beneficiaries in ARChoices, 17% were denied services, according to the most recent numbers from the Arkansas Department of Human Services. For the 1,207 new ARChoices applicants, 33% were denied.

And reviews of nearly 150 beneficiaries who had been denied benefits were later found to eligible, DHS said.

Still, CareLink has seen its Medicaid revenue fall $1.6 million over its past two fiscal years, which end June 30, he said. He said he anticipates more revenue declines through the end of the calendar year. CareLink has about a $15 million budget.

Mattingly said the sagging revenue is tied to changes in the way Medicaid beneficiaries are assessed for benefits in the traditional Medicaid Personal Care program. And annual caps placed on the amount of care beneficiaries receive has also caused CareLink’s Medicaid revenue to fall, he said.

“As all these changes occurred and overall volume decreased for all providers, competition to serve participants has become very aggressive,” Mattingly said. “So I could be losing market share as well.”

In 2016, CareLink had about 700 aides; now it employs 500.

Other in-home providers share a similar script.

“We are suffering and our clients are suffering,” said Jacque McDaniel, executive director of East Arkansas Area Agency on Aging, which has its headquarters in Jonesboro.

In the first seven months of 2019, the agency’s revenue from Medicaid was down 19% compared with the same period in 2018, she said.

McDaniel said she hasn’t had to lay off any employees as a result of the decline in revenue. It has about 300 workers; about 200 of those are aides.

“It’s really hard, honestly, to see a way out of this situation,” McDaniel said.

DHS hired Optum Health Care Solutions Inc. of Eden Prairie, Minnesota, in 2017 to handle the assessments.

A legislative committee is looking into the number of denials that Optum recommended for people who receive in-home care and those in assisted living facilities, said State Rep. Charlene Fite, R-Van Buren, chair of the House Aging, Children & Youth committee and a member of the Arkansas Legislative Council’s Review Subcommittee.

In August, the subcommittee told Optum to report back in November on how it “fixed the problem” with “the number of claims that were denied,” Fite said. “Legislators were concerned with the number of people being told that … they no longer qualify” for Medicaid benefits.

State Rep. Dan Douglas, R-Bentonville, said he was concerned about the way Optum handled the assessments for in-home and assisted living benefits. For those current Medicaid beneficiaries in assisted living centers, 15% of 392 were denied benefits, and 21% of the 214 new applicants were denied.

“It’s problematic whenever you have a 93-year-old woman that’s legally blind and deaf and been in assisted living for several years” who is reassessed by Optum and told she doesn’t qualify for services, Douglas said. “What is she to do?”

DHS spokeswoman Amy Webb acknowledged some issues with the assessments, but said “we have worked to address those where we could and we’re continuing to monitor that.”

Optum’s contract for the current year is $16.35 million, and the total value over seven years is $87 million, Webb said.

CareLink has about 225 people in the Medicaid program called ARChoices in Homecare, which provides in-home and community-based services to beneficiaries.

Mattingly said dozens of those clients don’t have a care plan in place because the plans they were operating under expired this month. He said CareLink is providing services to those clients in the meantime, though.

CareLink also had to spend about $90,000 more to deal with the Medicaid changes, including hiring an additional administrator and reassigning other staff members, Mattingly said.

“So they’ve reduced my overall volume, they have not increased the rate to accommodate the minimum wage [increase in January], but they have increased my administrative costs tremendously as a provider,” Mattingly said. “Now, from an older person’s perspective, it’s just horrible trying to get services right now.”

He said that he fears the elderly will try to stay in their homes as long as possible, which could increase hospitalizations because they won’t be getting the care they need. Or they might land in a nursing home prematurely.

“Everybody agrees that home community-based services are more economical,” Mattingly said. “Yet here we are putting all kinds of restrictions on allowing access to people at a time when we have 10,000 people a day turning 65” across the county.

DHS Responds

The independent assessments are moving forward as quickly as possible, said Paula Stone, deputy director of the DHS Division of Medical Services, which administers Arkansas Medicaid.

“We’re doing several thousand assessments per month across all the populations,” she said. DHS contracted with Optum to handle the independent assessments that included people in the traditional Medicaid Personal Care program. Since 2017, Optum has done 105,000 assessments to see if beneficiaries need in-home care or other services, Stone said.

Webb said using the independent assessments was a policy change that DHS made after receiving recommendations from the Legislative Health Task Force.

The task force was created after Gov. Asa Hutchinson said in 2015 that he wanted to reform Medicaid. The task force set a goal of saving Medicaid $835 million over five years through 2021, and more than $950 million has been saved in the first three years.

Stone said the decision to use an independent assessor came after a realization that providers were making decisions on services to be offered to beneficiaries, which let them act on a financial incentive to provide more services.

In addition, for some Medicaid beneficiaries, the federal Centers for Medicare & Medicaid Services requires independent assessments, Stone said.

Mattingly said he understands the need to have someone acting as a gatekeeper between the provider and client, but the current system is hurting clients. He said he had seen he has seen beneficiaires who previously qualified for an average of 12 hours a week of services be limited to 10 hours a week.

McDaniel, of the East Arkansas Area Agency on Aging, said some clients are now capped at $5,000 worth of benefits annually. “They may need home care. They may need home-delivered meals. They may need medical supplies,” she said. “But now they have a budget, so they have to give up something.”

Stone said if a beneficiary doesn’t receive approval for benefits, that “doesn’t mean there aren’t other services that are available. So what we’re really doing is looking at the individual to make sure what they need and how to help them obtain those services.”

In the meantime, White River Area Agency on Aging says it is doing its best to keep providing care to clients while they appeal the denial of services.

“We have taken the risk on ourselves to try and provide the care, just hoping in the end some of these things will iron out,” said Shanna Maguffee, White River’s chief operating officer.

“We just want to take care … of the elderly and disabled in our area.”