A Medicaid Management Company’s intentional refusal to cover the cost of requested services is not reasonable. A case in point occurred recently.

One of the Healthy Louisiana Medicaid Management Companies (they prefer, “Managed Care Organization” or “MCO”) asked our organization to provide care for a child they believe requires one-on-one staffing to ensure the child’s safety. (One-on-one staffing requires a child be directly supervised by one Mental Health Specialist.)

In acknowledging the child’s needs, the MCO drafted a Single Case Agreement for the 1:1 care, offering to pay $6.00/hour for the requested care, a rate that is less than 50% of the costs of requested care and less than even the Federal Minimum Wage.

In what world does this make sense?

We countered with a rate that is still less than the cost of providing 1:1 and the MCO refused, which – because the MCO holds responsibility and authority for managing the care and outcomes for this child – it has every right to do.

As Louisiana’s Department of Health prepares for the next round of Healthy Louisiana Medicaid management contracts, LDH must keep in mind that MCOs are profiting from their business in Louisiana. So much profit in fact, that other companies are eager to come into Louisiana for the profits they will receive in managing Louisiana’s Medicaid system. Also, we know from the recent past, Louisiana’s established MCO’s are willing to fight in court to retain their contracts with LDH.

So, while MCOs take money to the bank, Louisiana’s providers are bearing the costs of the MCOs’ profits. This is common knowledge.

Karen Stubbs, Assistant Secretary of the Office of Behavioral Health, during her January 29, 2021 testimony to the Louisiana Legislature’s Joint Medicaid Oversight Committee, pointed out that Mississippi’s Medicaid reimbursement rates for Licensed Mental Health Professionals put Louisiana’s to shame. Representative Tony Bacala shared his belief that Louisiana spends more per capita on Medicaid services to citizens.

If so, where does it go?

As I shared in comments that I submitted to LDH regarding Louisiana’s pending Healthy Louisiana Request for Proposals (“RFP”) for new Medicaid management companies, Louisiana must ensure that the providers of care to Louisiana’s citizens are at least breaking even. The reason this is important is simple: too many years of fiscal losses will force even the healthiest provider to step out of Healthy Louisiana.

Wherever it goes, profit-oriented Managed Care Organizations have no right to suck the reserves of providers.

Rick Wheat
President/CEO
Louisiana United Methodist Children and Family Services, Inc.