State Investigates Managed Care Company For Medicaid Fraud | News
LITTLE ROCK – Empower Healthcare Solutions, a managed care organization that serves approximately 20,000 Medicaid beneficiaries in Arkansas, is under investigation by state regulators and the Attorney General’s Office for allegedly defrauding Medicaid.
In a letter sent to the state’s Medicaid Inspector General’s office last week, Deputy Attorney General Lloyd Warford said a full investigation into the fraud allegations was just beginning. But an initial review found “sufficient credible evidence” to support Empower’s suspension from the Medicaid program, he wrote.
The Medicaid Inspector General’s office informed Empower the next day that he was being sanctioned and would be subject to increased scrutiny. The inspector general, however, did not suspend all payments to the company, “due to the fact that Empower currently serves over 20,000 Medicaid beneficiaries who depend on Empower for continuity of care.”
Empower is the largest of four vendor-run Arkansas Shared Savings Entities, or PASSE: managed care organizations that contract with the Arkansas Department of Human Services (DHS) to pay and coordinate care for high-need, high-cost Medicaid recipients. having an intellectual or developmental disability, behavioral health disorders or both.
PASSE must be majority owned by health care providers, but their role is similar to that of insurance companies. Each PASS receives a fixed monthly fee per member of DHS, the agency that administers Medicaid in Arkansas. The PASSE then takes care of the care of all its members, which may include costly services such as hospitalization or 24-hour assistance to disabled people. In 2020, Medicaid paid nearly $ 1.3 billion to some 50,000 state PASSE recipients, according to documents provided to a legislative committee in June.
Mitch Morris, CEO of Empower, said in an email Thursday evening that the organization “denies any allegation of fraud or other misconduct.”
âAs reported by the GA office, no final decision has been taken and Empower will continue to cooperate with the investigation. We look forward to resolving these issues with the State of Arkansas and continuing to focus on improving health services and outcomes for the 20,000 Arkansans served by Empower, âMorris said.
The letter from Warford, the Deputy Attorney General, gives limited information on the nature of the allegations. Empower is accused of embezzling money claimed as âcommunity investmentâ expenses – a type of capacity building expense permitted under the PASSE program. Nearly $ 4.7 million in community investment demanded by Empower in 2020 has “no support,” the letter said.
The letter also states that a group of 25 behavioral health care providers “were collectively overpaid by approximately $ 3.7 million” by a program put in place by Empower in the early months of the COVID-19 pandemic. . At the time, medical and community services across the country were interrupted by closures.
Empower created a “stabilization” program designed to make short-term payments to the 25 behavioral health providers who treated the most PASSE members. But an actuarial consultant hired by Empower determined those providers were collectively overpaid by around $ 3.7 million, the letter said.
Empower is also said to have protected some vendors from its internal audit process, Warford wrote.
Morris said in an email that “the programs reviewed comply with federal and state laws and are designed to improve service delivery and improve care for our beneficiaries.”
âThe issues under investigation do not relate to the care provided to members,â he noted.
Empower faced growing problems even before the fraud allegations surfaced. The fallout from the departure of one of the company’s co-owners has raised the question of whether the PASSE will have the capacity to continue operating next year.
DHS temporarily suspended new registrations to Empower on November 19. The agency completed an Empower “readiness review” last week, but has yet to make a decision on PASSE’s status for 2022, a DHS spokesperson said last week.
Nonetheless, DHS has sent a letter to Empower clients advising them of Empower’s partial suspension from Medicaid and advising them that they can change to another PASS if they wish.
âDon’t worry. You don’t lose your coverage and nothing will change for you just yet,â the letter from DHS reads. âTo make sure you continue to have access to the care and services you need, Empower will continue to receive Medicaid payment for the services. You can remain in your current PASS. However, if you wish to switch to another PASS, you can do so by contacting 1-833-402-0672.
Danette Smith, a Hot Spring County resident whose daughter is an Empower member, had already decided to change PASS before news of the fraud allegations broke this week.
Smith’s daughter, Sophia, 28, is autistic and mostly non-verbal. She needs 24/7 support and has other complex medical needs, Smith said. When the PASSE system was first deployed in 2018, Sophia was initially assigned to another PASSE, Summit Community Care. But not all of Sophia’s doctors were included in Summit’s network at the time, Smith said, so she switched to Empower.
Smith hasn’t been happy with Empower for years. PASSE denied requests for drugs and supplements, she said, and often failed to communicate with her and other parents. The recent uncertainty over Empower’s future has been the last straw. She believes Empower is unlikely to be reauthorized to participate in the system in 2022, which would mean her thousands of members would be reassigned to other PASSES by DHS.
“I have already chosen to move [Sophia], because I’m not going to wait until January, âSmith said. âIt’s very worrying for parents because we trust them.
âAt the start, they made a lot of promises that didn’t materialize. And now we have a PASS that flows. â¦ It’s all about the money. Not about the members, not about my daughter – it’s all about the money, âshe added.
The recent turmoil within Empower stems from its ongoing split from Beacon Health Options, a Boston-based company that is one of the nation’s largest behavioral health organizations. Beacon has held a 16.66% stake in Empower since PASSE’s inception in 2017. (The rest of Empower is owned by several Arkansas-based healthcare entities.) Beacon also contracts with Empower to provide administrative services and played a critical role in holding accountable the day-to-day operations of.
But in 2020, Beacon was bought out by insurance giant Anthem. Anthem also owns a stake in Summit Community Care – another PAS and a rival to Empower. State law passed earlier this year prohibited companies from owning portions of more than one PASS, and Beacon quickly began to part ways with Empower.
On November 2, Empower sued Beacon, accusing him of sabotaging Empower for the benefit of its new owner. The lawsuit claims Beacon refused to hand over critical phone numbers, email accounts and databases and documents as the two companies scrambled to finalize their divorce at the end of the year. Empower and Beacon also fought over the issue of supplier accreditation within Empower’s supplier network.
“Since the merger, Beacon has adopted behavior which suggests that it functions as a Trojan horse for Anthem,” states Empower’s complaint. (The lawsuit was originally in federal court but was re-filed in Pulaski County Circuit Court on November 15. No court date had been set for December 2.)
In addition to Beacon, Empower is co-owned by five Arkansas-based healthcare organizations. These are the Arkansas Community Health Network, a consortium of four hospital systems; Statera, a long-term care company; Independent Case Management, a provider of home and community services for people with developmental disabilities; The Arkansas Healthcare Alliance, a group of behavioral health and developmental health service providers; and ARcare, a network of clinics and other providers.
According to documents provided to a legislative committee in June, Empower has the largest share of beneficiaries among Arkansas’ four PASS, with some 20,000 members. Summit Community Care, the PASSE co-owned by Anthem, had over 16,000 members. Arkansas Total Care, part of the Centene health insurance company, had more than 13,000 members. The fourth PASS is a newcomer to the state: CareSource PASS, owned in part by an Ohio-based managed care company, was licensed earlier this year and is also undergoing a readiness exam. .