Indiana’s transition to Medicaid managed care for long-term supports and services this month was billed as a way to streamline care options and better manage costs for seniors. But some long-term care providers are now dealing with major payment delays that have materialized since the first of the month.
Some operators report not receiving any payments from managed care entities since the transition kicked in. Such lengthy delays have been difficult for providers to absorb, sector leaders said.
Nearly two-thirds of nursing home residents are Medicaid recipients, meaning that any disruption to that source of income has a major impact on skilled nursing providers.
“While we are optimistic that this transition will be positive in the long run, there have been some bumps in the road out of the gate,” Eric J. Essley, president and CEO of LeadingAge Indiana told McKnight’s Long-Term Care News Wednesday. “We are seeing some struggles with efficient claims payment, especially around coordination of benefits between payors.”
Those bumps have some providers worried about holes in their finances in the near future.
“We’re two or three payrolls away from not being sure what we’re able to do,” Jeff Huffman, chief operations officer at provider The Strategies, told the Indiana Capital Chronicle.
Indiana law allows nursing homes to apply for state emergency funds during the transition period if they go three weeks without receiving payment, or if denials of coverage reach 15% or more during a single billing period. These applications will be available for the 210 days after the transition — until near the end of January 2025.
“We do anticipate the need for some providers taking advantage of the state’s emergency fund,” Essley told McKnight’s, “but we are hopeful those will be the exceptions, not the rule.”
Early signs of turbulence emerged last October, when one of four companies initially selected to administer the managed care contract was cut from the program for not meeting the readiness standards expected by the state.
At the time, providers viewed the cut as both a good sign that the state was taking the transition seriously and a warning of potential pitfalls in the program broadly.
Indiana providers have often spoken against the transition to managed care. Beyond the logistical issues of the rollout, Medicaid managed care shares some of the same problems with prior authorizations and potential denials of coverage that have raised national controversy over Medicare Advantage in recent years.
The wrinkles still being ironed out in Indiana could be a warning sign for providers elsewhere. While services like long-term services and supports, pharmacy and behavioral health have typically been carved out of state managed care contracts in the past, they are increasingly being added to state contracts.
“Other states considering a statewide rollout would be advised to go slowly and conduct more comprehensive claims testing prior to go-live,” Essley advised.
