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Louisiana's Medicaid Billing Snafu

Charles Maldonado on the state's newly privatized Medicaid billing for some health services, and the problems some clinics are having with the new system

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Cecilia McNeil, COO of The Guidance Center in Chalmette, says the state's new privatized Magellan software for Medicaid billing isn't ready to go — though it launched March 1.
  • Cecilia McNeil, COO of The Guidance Center in Chalmette, says the state's new privatized Magellan software for Medicaid billing isn't ready to go — though it launched March 1.

Cecilia McNeil, chief of operations and finance for the Guidance Center, a mental health rehabilitation (MHR) center located in a Chalmette strip mall, apologizes for the clutter in her second-story office — two times. The "mess" is forgivable. But cleaning up the folders on her desk isn't her biggest problem at the moment.

  McNeil turns on her computer and loads up Clinical Advisor, a Medicaid reimbursement computer program built by state contractor Magellan Health Services that was supposed to make life easier for her and her husband Michael, the company's CEO. The Guidance Center employs 80 clinical and support staff providing rehabilitative treatment to nearly 680 clients, many with severe, chronic mental illness, and 95 percent of their clients use Medicaid.

  Clinical Advisor is an online records management system intended to streamline inter-clinic communications and the mechanism through which clinics submit Medicaid claims. It's not working. As a result, providers — many of which, like the Guidance Center, serve Medicaid clients — haven't been able to submit Medicaid claims. What's more, they say, the newly formed Louisiana Behavioral Health Partnership (LBHP) between the state and the private contractor is denying certain types of claims that used to be paid. And the McNeils have had to cut back.

  "My background is performance improvement," McNeil says, looking at the monitor. "So this drives me crazy."

  Paul Dykes, CEO of Magellan's local arm, Magellan of Louisiana, cautions that the program is still quite new.

  "You have to understand the magnitude of what we're implementing here in Louisiana," he says. "There has never been a managed care system" (for behavioral health here, he says).

  Magellan is engineering and installing a massive database that will allow clinics to share information on treatment, patient prescriptions and medical history, Dykes and other Magellan officials say. While the state is paying the company per-patient fees for management services, individual providers get the software without charge.

  "We're providing a data infrastructure that the state never had," says Dr. Craig Coenson, Magellan of Louisiana's chief medical officer and former chief medical officer for the Metropolitan Human Services District in New Orleans.

Last September, Magellan landed the contract to manage tens of millions of dollars' worth of behavioral health services for thousands of Medicaid patients statewide. The Connecticut-based company has Medicaid administration contracts in 25 states, according to its website. The company's most recent annual report to the Securities and Exchange Commission shows nearly $3 billion in annual revenues in 2011, with $270 million in profit. Nearly $1.5 billion of those revenues, and $121 million in profit, came from public sector contracts.

  On March 1, the state of Louisiana launched the LBHP with Magellan. "This new approach puts people first and at the center, focuses on collaboration and builds a more efficient system," said Louisiana Department of Health and Hospitals (DHH) Secretary Bruce Greenstein said in a statement posted that day on the state's website.

  The Clinical Advisor software program was supposed to be ready to go the day the LBHP became active. But the McNeils and other providers interviewed by Gambit report problems with Magellan's system ranging from passwords not working to being unable to enter required information such as client medical records and diagnoses.

  "There are three issues with the billing system," Michael McNeil says.

  Issue one: Providers haven't always been able to enter new or existing client information into the Clinical Advisor database, and when they do, the system isn't stable. The McNeils found that out on March 3, when they had to re-enter nearly all of their clients into the system after information disappeared overnight. "It's caused a huge amount of extra work for us," Cecilia McNeil says.

  Issue two: The company hasn't been able to enter progress notes on patients — what services they've received and how they've responded to them. "They have no idea what's been done since March 1. To me, if I was responsible for oversight of Medicaid services on a state level, I'd be concerned," Michael McNeil says.

  Issue three: MHRs using the system can't get their billing processed. "Nobody's been able to bill," says Elias Hanusiak, who works for Enhanced Destiny Services, a mental health rehabilitation center in New Orleans.

  Deputy DHH Secretary Kathy Kliebert, first contacted on March 9, said that only MHR agencies were reporting problems with the system. Last week, Gambit spoke with several non-MHR agencies whose staff members reported they were unable to log in to the program.

  Kliebert responded that implementation is being phased in slowly. Non-MHRs, she now says, are not supposed to use it yet.

  "That may have been part of [Magellan's] original plan, hoping to have everybody ready to go by March 1," Kliebert says, noting that there were too many people to train in too short a time. The plan therefore changed shortly before the system went online. She said the partnership began with MHRs, of which there are more than 100 statewide. "Then they would phase in the other providers."

  Magellan local CEO Dykes says that process will happen in three planned phases. Kliebert anticipates the entire process could take about six months.

Despite glitches in the transition process, MHRs such as the Guidance Center haven't seen an actual interruption in payments. They received their last direct Medicaid payments, from a pre-March 1 billing cycle, on March 6. To make sure those companies don't lose money while the billing system is tweaked, Magellan sent out advance payments to providers who haven't been able to bill through the program.

  "It will be based on the historical claims that they've had. They did receive claims from Medicaid on March 6, so they won't have an issue with cash flow," Kliebert says.

  Michael McNeil confirmed that the Guidance Center got its check on March 13; he declined to give the dollar amount. "It'll cover what needs to be covered for the next two weeks so we can operate," he says.

  Dykes says the total advance payments came to more than $1.8 million, which was paid to 97 MHRs.

  Despite that temporary assistance in maintaining short-term cash flow, Michael McNeil says he's not sure at what level his business will be able to operate long-term — a situation that has nothing to do with the functionality of the new software.

  Under the LBHP, he says, providers are no longer being paid for Medicaid claims for services provided over the phone. Some phone services, such as scheduling calls, were never covered.

  But others, including suicide calls, were covered under the old system, he says. He describes one recent incident where a suicidal client called the Guidance Center. Between telephone counseling, calling the police and arranging for hospital accommodations, staff members were on the phone for two hours.

  DHH's Kliebert adds that other phone services — such as calls to other clinics or to patients' parole or probation officers — are now being handled by LBHP, and thus are not billable. The McNeils were not aware of that change.

  "Those coordination services are now coordinated by Magellan," Kliebert says. "So there's no need for providers to do those services."

  Still, many clients have come to expect — and depend upon — emergency calls and supplemental counseling calls that occur between face-to-face counseling sessions. Michael McNeil says his staff members sometimes spend hours on the phone every day. He says payments for phone services used to average about $26 per hour.

  "[Phone services] were always billable," says Hope Gersovitz, clinical director of the Family Preservation Services MHR in New Orleans. "They completely were before. I'm not really sure yet how we're going to deal with that with the umpteen-million other problems we're experiencing with this."

  Dr. Craig Coenson, Magellan of Louisiana's chief medical officer and former chief medical officer of the Metropolitan Human Services District in New Orleans, says the company provides its own toll-free number for crisis calls (1-800-424-4399).

  According to Lisa Faust, Magellan of Louisiana spokeswoman (and a former spokeswoman for the Louisiana DHH), the change was the state's decision, outlined in new Medicaid regulations that became effective March 1. "DHH's interpretation of the service manual is that is not billable," Faust says of such phone services.

Having many previously billable claims denied under the new rules leaves clinics with several choices, none of them good. They can ask their staff members to work for free. They can refuse to take calls and risk possible malpractice charges. They can submit a claim for phone care as another, approved service — such as counseling — and possibly be charged with attempted fraud. Or they can pay for phone care out-of-pocket and cover those costs by cutting back elsewhere, which is what Michael McNeil says his company has done.

  "As of last Saturday, we've cancelled paid time off, holiday pay, licensure supervision [paying for staff member licensure training]," he says. "And effective the end of this month, our health insurance and life insurance policies will be canceled. ...

  "The clients we serve now have a better safety net than our employees."

  He says staff members are talking about quitting. Some of the McNeils' employees have medical problems themselves and need the benefits that are being eliminated. Even those who don't are, in general, highly educated workers, with masters and other higher-education degrees, and could get jobs at other agencies. "Maybe at Magellan or DHH," Michael McNeil says. "Or out of state."

  Dr. Anthony Speier, head of the Office of Behavioral Health for DHH, says he can't comment on cases like the McNeils'.

  "We can't solve a problem when it's generalized. We can solve a problem if it's specific. ... You don't really know how to fix a problem until you know the specifics," Speier told Gambit. He adds that LBHP has a robust appeals process for denied claims and that the Magellan-DHH partnership has already shown itself to be extremely responsive to provider complaints. "We've got the right processes in place and they've got the right processes in place. We feel the processes we need to communicate with providers are available."

  "That willingness to work through these issues will make sure this process works out in the end," Kliebert promises. He adds that Magellan has been spending lots of time with providers, working one-on-one, doing daily webinars and hosting conference calls to work out these kinks.

  "I'm on the phone with Magellan right now," Gersovitz says. "There's a conference call every day. It's a nightmare."

  Cecilia McNeil says she's put 12 of her 20 support staff members on the job working with Magellan and LBHP rather than running the Guidance Center. She says she's been assigned a personal rep from the company to take her calls. "But we've never had a [Magellan representative] on site," she says.

  There are other ways for MHRs to submit claims — through the mail, for example.

  "They have been reminded that they can make claims in other ways," Coenson says. But Faust adds that some may not have the time or the resources to handle the additional submission work, so not all have been steered toward those alternative channels.

  Speier says that many of these problems are "unintended consequences of a process" that will ultimately improve service delivery. "One of the things, the thing, that drives both Magellan and us in this process is that it's a clinically driven process: getting clients into the right kind of care," Speier says.

  "I have always felt Magellan was a great company," Cecilia McNeil says, adding she's still optimistic that a statewide mental health records database will increase efficiency. For now, she says, "This is absurd. It's almost two weeks since [the website went] live."

  Kliebert says the implementation of LBHP represents a huge change in state health care, and that an adjustment period for providers is to be expected.

  "It's a different world than how they previously did services," she says.

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