What’s the Matter With Kansas Medicaid?

By Lambert Strether of Corrente.

Spoiler alert in one word: Privatization. Here is a brief description of the privatized Kansas Medicaid program, “KanCare,” from the Kansas state legislature’s Legislative Division of Post Audit (DPA). Page 7 of the PDF:

Launched in January 2013, KanCare is the program through which the State of Kansas administers Medicaid. KanCare offers health care for people with limited income, which may include pregnant women, children, and low-income families with children. The Kansas Department of Health and Environment (KDHE) and the Kansas Department for Aging and Disability Services (KDADS) jointly administer KanCare. KDHE maintains financial management and contract oversight of the KanCare program. KDADS administers the Medicaid waiver programs for people with disabilities, mental health conditions, and substance abuse problems, and oversees the state hospitals and institutions.

As the state’s Medicaid program, KanCare focuses on providing person-centered care coordinated through contracts with three private managed care organizations [MCOs]: Amerigroup of Kansas Inc., Sunflower Health Plan, and United Healthcare Community Plan of Kansas. The state also contracts with Maximus [hmm…], a company that processes the state’s Medicaid applications and provides support services during the eligibility process.

Or in short form:

[KanCare is depends on] a federal waiver that allows the state to contract with three private companies to operate KanCare, a $3 billion program that covers more than 420,000 low-income, elderly and disabled Kansans.

And let’s not forget Maximus, the fourth company!

I’m sure the KanCare story is a lot more complicated and horrid than this superficial survey will reveal — Kansas readers please chime in! — but even so things look pretty bad. (Note that KanCare is for existing Medicaid, not Medicaid expansion.) I’m going to start with the story on KanCare’s data debacle, move through their eligibility determination debacle, and close, for a change, with a bit of good news.

KanCare’s Bad Data and Phishing Equilibria

Here’s the story that set me off. Governing:

Legislators directed their independent auditors to find out whether KanCare is working.

After a year of work, those auditors recently released their determination: the state’s data is so bad [How bad was it?], there’s no way to know.

“These data issues limited our ability to conclude with certainty on KanCare’s effect on service use and limited our ability to interpret cost trends,” the auditors wrote. “More significantly, data reliability issues entirely prevented us from evaluating KanCare’s effect on beneficiaries’ health outcomes.”

Holy moly. (The article says “the state’s data,” which really means the data managed for the state by KanCare’s four vendors.) So I went looking for the report, ” “Medicaid: Evaluating KanCare’s Effect on the State’s Medicaid Program” (PDF). Here’s the section on data:

  • Data reliability issues and state policy changes limited our ability to fully conclude on KanCare’s effect on claims costs and service use. Although the total claims dataset was reliable, 6 of the 12 individual service datasets were unreliable due to inaccurate or inconsistent data. This limited our ability to fully conclude on KanCare’s effect on service use, which also limited our ability to interpret post-KanCare cost trends.
  • Data reliability issues prevented us from evaluating KanCare’s effect on beneficiaries’ health outcomes. Five of the seven health outcome datasets were unreliable because of inaccurate data. These inaccuracies were likely the result of difficulties KDHE had in correctly pulling data from its complex Medicaid systems. We did not have sufficient time to correct the errors we identified and ultimately decided we lacked sufficient evidence to conclude on KanCare’s effect on beneficiary health outcomes.

Note that the service data was bad because the medical coding (covered at NC here and here) was bad: “For example, prescription drug costs fluctuated between $24 million and $1.4 million between the first and third quarter of 2013. KDHE officials told us these differences were due to inconsistent coding and reporting by the MCOs” (that is, by Amerigroup, Sunflower, and United HealthCare). That’s exactly what you’d expect from three separate vendors in a system with no quality assurance. Here is the DPA report on quality assurance for claims data (page 28):

Although KDHE [Kansas Department of Health & Environment] has a process to ensure MCOs claims are allowable, they lack a process to ensure they are accurate.

Holy moly. More:

KDHE does not have a process to ensure reported costs accurately reflect MCOs actual costs. We expected KDHE to have a process to check a sample of MCO reported costs against original provider claims to verify the accuracy of reported costs. KDHE and DXC officials told us no such process exists. KDHE officials told us it was unlikely MCOs could overreport their costs because it would require them underpaying providers. KDHE officials told us providers would alert them to these issues.

So, KDHE processes claims on the honor system. Good to know. Not necessarily a debacle. Still on page 28:

We compared a judgmental sample of 19 provider claims from two Medicaid providers against MCO reported costs and found no significant discrepancies. These 19 claims showed how much the MCOs actually paid the providers. We worked with DXC [another contractor, not Maximus] staff to compare the actual paid amount in each claim to what the MCOs reported to KDHE. In all but one case, the paid amounts matched MCO reported costs. In the one exception, the paid amount exceeded what the MCO reported to KDHE. Although inaccurate, this type of error would not inappropriately increase the MCO’s capitated payment rates.

Although our review of 19 claims did not uncover instances of improper reporting, this was a very small, non-representative sample of claims. As such, there is still a risk that MCOs could improperly report costs to KDHE, resulting in incorrect state payments to the MCOs. KDHE could compare a larger, more representative sample of provider claims to MCO reported costs to help reduce this risk.

At this point, let’s remember the notion of a phishing equilibrium, which we might crudely summarize as “If there can be fraud, there is already fraud.” And here we note that LPA is defining accuracy in a curious fashion: the equality of provider billing and MCO payments. But what if the providers are playing games with the coding to maximize their billing, as we already know they do? KanCare doesn’t seem to be checking for that. What we do know is that KanCare’s honor sytem has allowed what we might categorize as, if not fraud, fraud-like behavior:

To encourage prompt payment of claims, K.S.A. 39-709(f) requires MCOs pay interest to providers on valid claims not paid within 30 days. However, MCOs should not include these interest payments in the data they submit to KDHE to avoid inappropriately inflating claims costs and therefore future state payments to the MCOs.

We verified one MCO, Sunflower, improperly included interest payments in the claims data it submitted to KDHE. We interviewed officials from all three KanCare MCOs to determine how they handled interest payments. Officials from Amerigroup and United told us they did not include interest paid in claims submitted to KDHE. However, officials from Sunflower told us they did report interest paid in their claims data. To confirm this information, we asked each MCO to submit five late claims on which they paid provider interest. We compared the fifteen total claims against data in the state’s system. The claims data did not include interest amounts for Amerigroup or United but did include interest amounts for Sunflower. It is important to note that although we did not find interest included in the claims for Amerigroup or United, our data was based on a non-representative sample of self-reported data.

MCO officials[1] we spoke to had different understandings of whether or how to report interest payments to KDHE. It is possible clear guidance from KDHE, along with continued monitoring of MCO claims, could help prevent this issue from occurring in the future.

(“[O]ur data was based on a non-representative sample of self-reported data.” So maybe Sunflower was just stupid?) I dunno. Getting reimbursed for interest paid on a late claim doesn’t seem an awful lot like claims data to me. To start with, how would you have coded it? I have to work awfully hard to see what Sunflower did as an honest mistake, though I’m not familiar enough with Kansan to know if “continued monitoring of MCO claims” in “Kansas nice” translates to “fraud detection.”

KanCare’s “Circus Maximus”

Maximus is a publicly traded multinational based in — wouldn’t you know it — Reston, VA. They have quite a reputation in the UK (here, here), where they’re doing their little bit to help gut the NHS, and in the United States (Wisconsin). And they don’t seem to be doing very well by Kansas, either. First, there’s the $11 million Kansas is on the hook for from the Feds. Wichita Eagle March 30, 2018:

Kansas is suing over $11 million that it says a federal agency is improperly trying to take through an “egregiously hardline position.”

(Pause to note that the current Kansas administration is Republican.)

The lawsuit stems from a dispute over fees the Kansas Department for Children and Families paid into a state debt collection program run by the Kansas Department of Administration between 2003 and 2010. DCF typically seeks reimbursement from the federal government for a portion of the fees it pays into the program.

The Department of Administration each year files documents with the federal government about the federal funding the state plans to claim. Until 2013, the agency never included the revenue it retained from administering the debt collection program in the filings.

“During that prior time period, the KDOA had relied in good faith on a consultant” to help prepare the filings and “never once” did it include the debt collection revenue in its draft filings, the lawsuit says. The federal government asked about the debt collection revenue in 2012, the lawsuit says, and an audit began. Kansas worked with HHS to provide documentation, but the federal agency refused to negotiate a compromise, the lawsuit says.

There’s that honor system again.

The consultant, Maximus Consulting Services, is an arm of Maximus, which has had other contracts with Kansas throughout the years.

Oopsie. Then there are the problems with the “KanCare Clearinghouse.” Kansas City Star, February 22, 2018:

In 2015, Kansas moved to a new computer system [uh-oh] for applying for Kansas Medicaid, or KanCare. Then it funneled applications and annual reviews that used to be handled in regional offices into a single “KanCare Clearinghouse” in Topeka. It contracted with a company called Maximus to staff the Clearinghouse starting in 2016.

Since then the number of seniors covered by KanCare for in-home nursing help has gone down and so has the number being covered for nursing home beds. Meanwhile, the state’s population has been aging. Dan Goodman, the director of the Johnson County Area Agency on Aging, said it just doesn’t add up unless there’s a problem with the system.

“Some seniors are really having a tough time getting onto Medicaid,” Goodman said. “They get frustrated, are in poor or declining health, become defeated by the process and give up.”

Instead, Richardson said the past several months have been a nightmare, as they play phone tag with a revolving door of Maximus employees in Topeka, none of whom know her husband’s case and one of whom suggested she just go on welfare.

But the computer system roll-out was rocky and complaints about the Clearinghouse began almost immediately. A backlog of Medicaid applications pending past the 45-day federal limit quickly formed and has never been fully resolved. Nursing home administrators have repeatedly said it’s hurting them financially and the delays have caused some homes to limit the number of people with pending Medicaid applications they will take.

Funny how these bugs never give too many people health care, isn’t it? Here are the horrid numbers. Wichita Eagle February 16, 2018:

[Maximus] is so out of compliance with its contract that it could face fines of more than $250,000 a day.

Maximus is operating with 40 percent accuracy on financial payments; 98 percent is required. The company is also falling behind on handling applications and cases, the state of Kansas says.

Kansas has given the company until June 1 to shape up. Otherwise, Maximus will face retroactive fines back to January that could total tens of millions of dollars.

And an interesting quote from a Republican appointee, unintentionally explaining one reason #MedicareForAll is a superior solution to a body shop like Maximus:

Kansas’ Medicaid director on Friday described a sense of despair among workers during a recent visit to the Topeka [Clearinghouse] facility. “It’s night and day. It’s a completely different work environment on our side of the house and their side of the house and I think that’s because we at the state value the employees that work for us,” Kansas Medicaid Director Jon Hamdorf said.

As I keep saying, holy moly!

The Good News: Proposal for a Medicaid Lifetime Cap Rejected by CMS

Finally, good news from Kansas in Modern Health Care, Recall that KanCare depends on a Federal waiver, so Kansas has to get a CMS OK for changes:

The CMS will reject Kansas’ request to impose lifetime limits on Medicaid coverage, following an outcry from clinicians and others in the state. “We’re determined to make sure that Medicaid remains the safety net for those that need it most,” Verma said at the American Hospital Association’s annual meeting in Washington. “To that end, we have determined we will not approve Kansas’ recent request to place a lifetime limit on Medicaid benefits.”

Verma’s announcement also likely spells doom for Arizona’s similar pending request, which sought a five-year benefits limit. It also indicates that the Trump administration has a hard line on which conservative policies it will support.

Vox has an explainer:

The CMS decision to reject Kansas’s waiver is a very big deal: Lifetime limits have not gotten the same amount of attention as work requirements, but they would have signaled an equally important shift in Medicaid, away from an entitlement for all eligible Americans toward a shrinking program actively culling people from the rolls.

Even if work requirements are allowed, it matters that the administration is not going to let states to kick people off Medicaid simply because they have been on the program for a long time.

“I do think it is significant that CMS has decided to say no to one of the pending requests that cut people off of Medicaid,” Joan Alker, executive director at Georgetown University’s Center for Children and Families, told me.

Of course, Medicaid work requirements are truly crazed, but a lifetime limit would have gone beyond crazed to outright evil.


#MedicareForAll would make Amerigroup of Kansas Inc., Sunflower Health Plan, and United Healthcare go away, and also take away a big chunk of business from Maximus. That is all good. Amazingly, Kansas Medicaid Director Jon Hamdorf gives a very good reason why replacing privatized body shops with state employees would make for a better experience for citizens interacting with the heatlh care system. Kansas, as big as you think!


[1] They are not “officials.” MCOs are private entities. They are “employees.” Neoliberal brain damage at the word level!

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Clive

    Ahh, yes, Maximus. Want to crush the faces of the proletariat into the ground? Maximus will do it for you, wholesale.

    When all other subcontractors bailed on the U.K. government’s Work Capability Programme because it was too stinky even for such corporate low life as ATOS, Maximus stepped in to save their day. The bottom feeder’s bottom feeder.

  2. flora

    From July 26,2017 NYT:

    “Mr. Brownback’s popularity has plummeted in recent years as the state slashed services and struggled to meet its revenue projections, problems that many attributed to Mr. Brownback’s signature tax-cutting doctrine. Despite Republicans’ dominance in Kansas, the party suffered losses in last year’s legislative elections.”

    Slashing services included laying off workers, both case workers and IT workers, thus shrinking in-house expertise and load managability. The former gov reduced the number of state IT workers as well. It’s not surprising the state now can’t effectively monitor the work being done by private companies that replaced parts of the state govt agencies’ work.

    example: The current KS revenue secretary just outsourced dozens of KS IT jobs, without the legislature’s knowledge in a no-bid contract with Canadian company CGI Group (whose work includes part of the Obamacare rollout debacle.)

    Slash funding, lay off capable people, outsource govt work to cronies, declare the remaining in-house govt staff can no longer effectively perform the necessary work, outsource more state functions in no-bid contracts to cronies. rinse, repeat.

    This is a general comment on the current vicious (as opposed to ‘virtuous’) cycle in KS. The specifics of KanCare privatization are even worse than this article exposes, both economically and in very negative effects on the enrollees.

    1. Clive

      Yep, same recipe as London’s Kensington & Chelsea borough — they outsourced so much of the public housing provision, they could not then monitor and control the third-party providers.

      Unfortunately the result was Grenfell, with a storyline ripped off from the movie Towering Inferno.

      In both the London and KS scenarios, the common factor was, naturellement, the people at the receiving end were not the elites in their no-expense-spared white glove concierge health or housing provision. They were the poor who rely on the state.

      Class warfare as public policy. Only in America! Oh, and England…

    2. skippy

      And to think[?]… how effective Bush Jr buddy’s were in subcontracting during the initial ME wars. So successful its increasing market share as a model.

    3. rd

      Bad data is a feature, not a bug.

      Good data allows for efficient decision-making and understanding if innovative cost-cutting measures actually work, as well as preventing fraud. None of these cost-saving measures help maximize private healthcare profits in the US system, which is a primary objective of the system.

      1. rd

        BTW – one of the benefits of single paper systems is that they are single payer and over time collect population-wide cradle-to-grave healthcare data. This provides real opportunities to aggregate and then disaggregate the data to figure out significant health trends and cost-drivers. The system can then experiment with ways to improve care and reduce costs.

        An example of British Columbia’s “Big Data” push over the past couple of decades: https://www2.gov.bc.ca/assets/gov/health/conducting-health-research/data-access/health_system_matrix_61_definitions.pdf

  3. grayslady

    Gee, I remember the days when there were real auditors who did thorough checks by randomly contacting customers in order to make certain invoices were legitimate. I received such a request years ago, asking me to confirm that a particular service was provided. For the Kansas “auditors”, checking with the 19 recipients wouldn’t seem like asking too much.

    1. Procopius

      Once, when I was young, I did that. Sampled the vouchers, too to make sure the pieces agreed. Even then, the writing was on the wall. Generally Accepted Accounting Standards were seen as guides to creative writing.

  4. Amfortas the Hippie

    looks like it’s all functioning as designed, to me.
    amerigroup is the “provider” through which I get medicaid(ssi) in Texas.
    I haven’t heard from them in prolly4 years.
    if you can get someone on the phone, IME, it’s a young woman(sounds college age and bubbly) who apparently received no training in our overly complex medical system.
    After I finally got my hip(took 6 1/2 years!), I started looking around for an ankle guy to fix my ankle(ennervated bag of gravel).
    The list of 100 or so that amerigroup sent me had zero ankle guys who actually took medicaid.
    100% error rate,lol.
    of course, I then cold called every ankle specialist in Texas(really) and learned that none of them take medicaid, but still…I would expect one of the two big corporate “providers” to know.
    Part of the problem is that there’s hardly any way for folks on the receiving end of all this(“customers”?) to get together and compare notes.
    add in the long term pavlovian regimen wherein we all keep the fact that we’re ON medicaid strictly to ourselves, due to learned shame internalisation, and there’s really nothing stopping these corps(e) from just running off with all the money….short of catastrophic failures, I guess…given the situation in the Libertarian Paradice.

    1. Beans Baby

      Texas Medicaid is as much a wealth transfer system as a healthcare system. It is a corporate healthcare nirvana. Oversight is a joke. Patients are merely the conduit by which money moves.

    2. rd

      My mom needed a knee replacement in the horrid Canadian healthcare system. After successfully navigating the “death panels” (mainly a couple of visits to a specialist to figure out if a knee replacement was actually the best medically-recommended course), it took about another three months for the surgery to happen. Most of that delay was so she could do the recommended physical therapy to strengthen the legs so that the surgery would be more likely to be successful. The entire out-of-pocket cost of this process was about $300, mainly to cover a chilled water joint cooling system recommended to help reduce inflammation, but not covered by the provincial or private health insurance. The whole process took about one year after the GP began the referral process to a specialist. It was a huge success as the knee replacement worked great and she was moving around ahead of schedule after the surgery.

  5. The Rev Kev

    You would think that if a government gives a private corporation a boatload of cash, that it would demand to know how it is spent whether it is on healthcare, charter schools or defense contracts. After all, you cannot audit what you don’t know about. But then again, perhaps that is the point of it all. It is legalizing fraud and all the dodgy documentation is merely a sign that it is going on. The correct response would be to take those in charge of these corporations on a day tour. Maybe even make it a working meeting. I happen to know that Kansas is the home for the US Penitentiary Leavenworth which would make a great place to visit. No need to explain why they are making a visit there but let the place itself be the message.

  6. saj san

    These are all examples of giving public money to private parties. Consider a public health plan like medicaid or medicare with less than 5% admin expenses getting privatized – the administrative expenses become like 10-20%. There is no benefit to health of the population in this – just helps private companies. And reduces the dollars for healthcare.

  7. Phil in Kansas City

    Over the course of the last decade , Kansas State government has acquired a reputation for secrecy, which the Kansas City Star has documented over the last seven months in a series of articles. This probably is something that someone wanted kept secret, but it popped into public view somehow.

    But I can’t help wondering if there was a deliberate plan to “tank” Kansas Medicaid, so that certain legislators (both state and national–Kansas is the land of the Koch bothers) could rail against the fraud waste corruption of Medicaid. Programs that aid the poorest are often the go-to target for certain brands of politicians.

    Brownback is no longer the Guv, and most Kansans are glad to see him and his crackpot ideas and bad governance hit the trail. Brownback and his followers were the type of politicos who rewarded the wealthy (the deep tax cuts that cratered the KS budget), and punished the poor. Brownback left Kansas in worse shape than he found it when he took office. The Medicaid debacle is not the only area of bad governance, but is just the one which has been brought to light. The state’s economic development office has awarded vast sums of money and tax credits to lure businesses to Kansas, but there has never been
    an audit to see if the program is effective. Other examples abound.

    1. Code Name D

      Early in the Brownback administration, it was learned he had a privet surver (against Kansas law BTW) where he was likly cunducting secret negotations with Alix and doners.

      Democrats were starting to press the issue in court. That was until Clintion’s privet servers broke into the news. Then the issue of Brownback’s servers magicly disapeared. Odd that.

  8. Lambert Strether Post author

    More comments from Kansas (or Texas) readers?

    I was conservative in my claims, because I don’t know the terrain, but you will note:

    1) “If there can be fraud, there will be” (a phishing equilibrium)

    2) Claims are processed on the honor system

    3) The actual delivery of care is not checked (and the study says explicitly the data is so bad it cannot be checked)

    4) Medical coding drives and is optimized for billing, and medical coding is all screwed up

    5) Screwed up to the extent that pharma claims fluctuate by ~25 to 1. That’s rather a lot.

    You have all the hallmarks for fraud on an industrial scale. It would be really, really nice to hear what nurses and doctors and billing practitioners and patients are saying about actual delivery of care in Kansas, on the ground, especially in nursing homes. I mean, it’s not like Medicaid fraud has never happened before…

  9. Amfortas the Hippie

    during the 6 1/2 years I was waiting around trying to gain access to the “easily gamed welfare system” to obtain a hip replacement, I had way too much time on my hands.
    Part of this period coincided with the Obamacare Debate. I took it upon myself to investigate various things…
    Here’s one:

    It turns out that the vast majority of actual fraud regarding the various Poor People Programs is NOT “welfare queens”…it’s folks like Pfizer and Two Guys With a Truck Delivering Wheelchairs.
    But the various Inspector Generals and whatnot do not distinguish between Giant Corporate Fraud and the tiny number of individuals who engage in defrauding the government.
    It all goes into one pot, and they then point at it and scream :”see! welfare is all fraud!”.
    The truth, such as can be determined, is buried in footnotes…and one has to rummage in footnotes from numerous reports, from various agencies, state and federal, to get some kind of clear-ish picture of what’s actually going on.
    In my little blog investigation, those 11 people convicted of fraud were all gang members, engaged in organised fraud…so even that is not indicative of the Welfare Queen style fraud we are told is so rampant.
    The only individual fraud I am aware of personally, is due…not to evil or malicious greed(which I thought was the highest good, anyway,lol)…but due to the hypercomplexity of the systems. It is simply impossible to be on “welfare” and not break some esoteric rule or another.
    and anyway…to call all of this “welfare”(as is common) is a category error: I paid for Medicaid/Disability/SSI out of every paycheck I ever earned.
    So it’s Insurance, dammit.
    The Mythos of rampant individual fraud, and the corresponding default setting, that anyone who tries to gain access to these programs is automatically acting in bad faith…serves to both undermine support for such things, as well as to steal from us who paid for it.
    add in a layer of Corporate “Providers”, like with Medicaid, and it’s a recipe for the grandest of larcenies, which is then blamed on it’s victims.
    I can’t believe that all this is accidental.

  10. Statsgurl

    I am a medical data analyst that has worked for the office of public health in my state, and now works for private industry. I have seen both sides of this coin and this is a product of incomplete contracting, incompetence or indifference because these contracts require the lowest bidder, and the IT/data analytics drain from public to private industry because the private industries easily pay twice as much for analysts and give significant perks (e.g. flex schedules, work from home, wider benefit options, higher 401K match).

    There needs to be a full overhaul of standard public contracts. They have changed very little, but our analytics, data volume, and data collection has. Contracts often have a couple sentences about data that are ambiguous and incomplete. The state needs to convene with auditors at the onset of contracting and talk about what data items are an absolute must for data evaluation, so that these data can be required by contract. I have moved from one data collecting system to another and while there are some standard fields–most well defined in medical claim data, outcome and medical event fields are really at the whim of the organization collecting data. Now, I’m sure someone will contest that industry can get whatever data whenever, this is simply not the case. It costs money to store data, therefore all medical organizations have to be selective as to what they decide to store. Organizations should be required by contract to do audit reports on not just claims but also patient outcomes, but the specifics of reporting can be easily overlooked in public contracts which is a big part of why this audit was such a kerfuffle.

    As for public entities, flora hit the nail on the head. The government doesn’t pay enough for their data and IT professionals so once they get either the education or experience necessary, they take a job with private industry for literally twice what they were being paid in the public sector. This leads to outsourcing, which becomes a problem when the government goes with the lowest bidder for contracts. This usually means that they provide inadequate analytical support in reporting and analytics for medical cost containment–this is the analysis to make sure things are coded correctly, patients are getting needed procedures and not unneeded procedures and labs, and monitoring of the cost changes of different procedures and drugs (especially new procedures and drugs which can be very costly). While there might have been a nefarious plan underneath, most of this sounds like it is fueled mainly by indifference and incompetence based on a weak contract.

    1. Cat Burglar

      Great inside view of how the train wreck works! I doubt there is a nefarious plan involved, but it would be interesting to find out how much of the data and administrative incompetence results in largesse in treating patients.

      In my experience under private insurance and billing, I have found rife billing incompetence big and small — but it always benefits the insurer, never the patient. From this I infer that there is some kind of admin veto operation that spotlights any form of generosity because it pays to do so; inaccuracies in other cases are simply consigned to the darkness: caveat emptor.

      I will never forget receiving a hospital bill equal to 15% of my annual income, more than a year after the procedure — a clear insurance policy violation. The hospital had outsourced the billing to the low bidder — “and the computer just spit this out automatically after an insurer audit found your new hip was too expensive, so they took back that overpaid amount, and the computer just did it automatically.” (I did ask them if they could teach me how to “take back” payments I felt were too expensive, but no go.) After a couple weeks I finally found a hospital official that would write me a letter saying I owed nothing, apologizing, and telling me it would never happen again. Then I got the same bill a month later.

      From this experience I infer that the private system is fully optimized to cheat us. Not as a plan, but just through the system design. And it is a very effective design. There is no penalty if the computer (note that the lack of human agency and separation of billing, insurance, and provider disperses any legal culpability) charges you too much — and what the heck! — you might actually be dumb enough to pay without fighting it. How can they lose?

      So our private market system is the most efficient possible. And how!

      1. Amfortas the Hippie

        Cat:”you might actually be dumb enough to pay without fighting it. ”

        Reckon this is the primary objective, right here.
        The few who do gripe about it are either ignored, or buried under paper, or “settled” with.

      2. rd

        They use the same programmers who developed cell phone and cable company bills. The billings are designed to be dense, confusing, and inaccurate with numerous errors requiring detailed review and phone calls to automated systems to resolve.

        Oddly enough, you would think that there is something like a Gaussian distribution of errors so that some bills are cheaper than they should be and others are more. But that never seems to happen. All the errors seem to be on plus side. Purely accidental, I am sure.

  11. Phil in KC

    Lambert, my stepdaughter and her children are on Kansas Medicaid, United Healthcare, I believe, and have been for a number of years. As far as healthcare delivery goes, no problems–whatever she goes to the doctor for, it gets paid. In fact, her insurance seems better than mine, which is paid by me and my employer. I wonder if her health care providers are just delighted to see her in their office, considering that they can bill the state of Kansas for just about anything, without any effective oversight. On the other hand, there are plenty of health care providers in the state who will not take Kansas Medicaid.

    That said, her health is not good, and is deteriorating.

    It bears repeating: in a financialized, capitalistic system, people in the health care system are profit centers first, patients second. The money passes from state to provider, but there is no assurance that quality health care is provided.

  12. audrey jr

    Yeah, we’ve got “California Care” here.
    Frankly, it should be titled, “California (doesn’t) Care.
    And, according to the CA State Assembly, we must give free healthcare to undocumented folks.
    No free healthcare for citizens, though.
    We’re on our own.

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