Delivery of Care

The state’s co-dependence upon Optum is not optimal

In Rhode Island, nearly 95 percent of Medicaid-covered individuals are now enrolled with a plan that uses the for-profit Optum for behavioral health contracting, credentialing, and claims.

Image courtesy of Lisa Peterson

Lisa Peterson, the COO of VICTA, has had a front-row seat in experiencing the problems caused by Optum's dominance in managing behavioral health claims for Medicaid patients.

By Lisa Peterson
Posted 12/5/22
Optum, a for-profit division of UnitedHealthcare, currently controls nearly 95 percent of all behavioral health management contracts for Medicaid managed care in Rhode Island, impeding the integration of a continuum of health care delivery.
How will R.I. EOHHS seek to control the role that Optum plays in the delivery of behavioral health care for Medicaid patients as part of the re-procurement process? Will the data trends analysis now underway by OHIC reveal the total amount of money being paid to Optum by Medicaid in Rhode Island over the past three years? Will the General Assembly authorize an audit of the current MCO organizations before the re-procurement process is finalized? How is the current success of the Cover All Kids legislation to create health coverage for undocumented children being tracked and measured?
Remarkably, there has been little reporting by local Rhode Island news media about the coming debacle when the federal COVID emergency declaration is lifted, and the current Medicaid population in Rhode Island, said to be nearly 350,000, more than one-third of the state’s entire population, must undergo eligibility recertification for the first time in three years.
Translated, as many as 50,000-60,000 Rhode Islanders are predicted to lose their Medicaid health insurance coverage, according to state health regulators. If hospital emergency rooms are currently swamped with patients and overwhelmed by increasing demand, just wait until the tsunami of Rhode Islanders being thrown off Medicaid begins.
State government has made contingency plans by deploying Deloitte, infamous for its UHIP debacle, to manage the transition, planning to offer former Medicaid members a paltry two or three months’ transition to a private health insurance plan. To quote WPRO’s Steve Klamkin “Really?”
Where is Erin Brockovich when we need her? One of the biggest problems, it seems, is the lack of coverage by Rhode Island’s news media. WPRI’s Ted Nesi recently framed the issue in a tweet as a problem state budgets, saying in a tweet: “Keep on eye on this – state revenue is going to have to start covering more of the Medicaid budget once Biden ends the COVID public health emergency, and the state will also need to begin the long-paused process for checking whether Medicaid beneficiaries remain eligible.”
The entire health care delivery system in Rhode Island is teetering on collapse, emergency rooms are overwhelmed, the health care workforce is decimated – all linked to the willful failure by legislators to increase Medicaid rates during the last decade. Yet the issue is being framed as the state needing to spend more revenue? That amounts to reporting malfeasance and malpractice, in ConvergenceRI’s opinion. The failure to report on the conflict of interest posed by for-profit Optum managing behavioral health benefits for Medicaid is a travesty and a tragedy, and it raises serious questions about corporate accountability and media responsibility.

PROVIDENCE – Right now, over a third of Rhode Islanders qualify for health insurance under the Medicaid program. In 2014, the state opted to expand Medicaid benefits under the Affordable Care Act, with the goal of ensuring access to the right care at the right time for anyone who needs it.

Although this expansion significantly reduced the number of uninsured individuals, and despite the fact that Medicaid spending accounts for nearly a quarter of the State’s budget, essential services remain out of reach for far too many. Rhode Island outspends more than 40 other states on health care, yet our behavioral health system is teetering on the verge of collapse.

Why is there such a disconnect between our stated goals, our substantial investment, and our actual health care system? Much of this quagmire can be explained by the decision to spend more “managing” access to care than to providing it. Over the last few decades, Rhode Island moved away from the state-led, traditional fee-for-service payment model, through which a provider delivers care, submits a claim, and is reimbursed accordingly.

In an attempt to improve quality outcomes and contain costs, Rhode Island moved Medicaid benefits under the purview of private health insurers known as Managed Care Organizations [MCOs]. The MCO model is designed to manage costs and quality by contracting with certain providers for discounted fees. Three health insurance corporations are currently approved by the R.I. Executive Office of Health and Human Services [EOHHS] to “manage” the state’s Medicaid spending: UnitedHealthcare, Neighborhood Health Plan of Rhode Island, and Tufts Health Plan [now known as Point32 Health, following Tufts’ merger with Harvard Pilgrim Health Plan].

As a result, more than 90 percent of Rhode Islanders with Medicaid coverage are currently enrolled in an MCO.

Benefits remain in silos
Behavioral health is a critical component of overall wellness, and integrated care models providing both physical and behavioral health services produce the best results. Yet benefits under Managed Care plans remain “siloed,” in most cases. Oversight of behavioral health care services is even subcontracted by some Managed Care Organizations.

UnitedHealthcare, a national for-profit insurer, delegates these services to its for-profit subsidiary, Optum. Since its creation in 2011, Optum has grown into a behemoth, creating billions of dollars in profits for the parent company. Optum’s revenue per covered individual increased by more than 30 percent from the first quarter of 2021, compared to the same time period this year 2022.

In 2019, Neighborhood Health Plan of RI terminated its long-term relationship with another behavioral health benefits management company in favor of subcontracting these benefits to Optum.

Combined with the existing United/Optum relationship, this has led to a near-monopoly in Rhode Island: nearly 95 percent of Medicaid-covered individuals are now enrolled with a plan that uses Optum for behavioral health contracting, credentialing, and claims.

As Rhode Island has moved toward the privatization of Medicaid, and United/Optum revenues have continued to balloon, provider reimbursement rates have remained stagnant.

As a result, providers experience de facto cuts to revenue while attempting to adapt to the surge in costs, need, and complexity of services being delivered. With more than 60 percent of Medicaid dollars going to the “management” of care, little is left for those who provide it.

A new Request for Qualifications to manage Medicaid benefits and spending will be posted in the coming year, and when the $7 billion contract is awarded, to begin on July 1, 2023, we still will not know the actual financial and health outcomes of the existing system.

A front-row seat
Even without this data, it is clear that what we are doing is not working. For nearly four years, I have had a front-row seat to this unfolding disaster. Obstacles with Optum’s contracting and credentialing caused VICTA to push back its opening by at least six months. Because Optum has such a large market-share, it was not feasible for a new provider like ours to start delivering desperately needed services without them.

Once we were finally able to open our doors to the community, we encountered multiple issues with appropriate medical contracting to ensure that we were set up to deliver truly integrated care; to date, claims are still being denied because they don’t fit neatly into “medical” or “behavioral” categories – a separation that by its nature impedes integration. It took a recent escalation to R.I. EOHHS to begin to generate some movement towards a solution.

Optum’s domination of the Medicaid market affects new providers as well as long-established organizations. For anyone who delivers home- and community-based care, it is an unfortunate part of the routine to navigate these types of issues, even as they distract from or delay our real work of improving the lives of those we serve.

Experiences such as long hold times, being transferred from department to department, repeating the same information with each new representative, and receiving conflicting information are the norm when seeking authorization for a service that the care team and member know is needed.

While most payers have moved away from cumbersome “prior authorization” requirements for services, such as “Intensive Outpatient” programming, Optum’s Utilization Management process remains in place.

With nearly 70 percent of our client population covered by an Optum plan, the unpaid time spent on these authorizations is significant. The impact of a single MCO having such a disproportionate share in the Rhode Island Medicaid market is clear, and it is not positive.

• Providers of critical, life-saving services throughout our community are at risk of financial crisis each time a process is changed or a ‘glitch’ occurs.

• Delayed payments from a payer with a footprint as large as Optum creates devastating effects for providers and service recipients alike.

• Our workforce has been decimated because already razor-thin budgets cannot support wages that adequately reflect the qualifications and value of our providers.

Rhode Island’s behavioral health system cannot continue to address the surging demand for mental health and substance use care without significant changes. If we are staying true to our collective goal of ensuring that anyone who needs help gets it, we cannot accept the current status quo.

Lisa Peterson, LMHC/LCOP/LCDS/MAC, is the Chief Operating Officer at VICTA.

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