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HMOs dispute $34M in state fines

August 13, 2010 | By Jim Saunders, Health News Florida

The Florida Agency for Health Care Administration says the state's MedicaidHMOs owe $34 million in fines in a long-running dispute about enrollingnewborns in health plans. The HMOs say the fines are unfair.

AHCA audits covering mid-2004 through 2007 found HMOs did not alwaysfollow requirements to enroll babies in their mothers' health plans soon afterbirth. That led the state to pay more for the infants' care than it would if theyhad been properly enrolled.

The agency is trying to hit HMOs with fines of $2,500 for each child notproperly added to a health plan, but collection has been delayed by appeals. AHCA does not allege that the HMOs committedfraud but says they did not comply with requirements of their Medicaid contracts.

HMOs face fines in cases where they could not show they had submitted a form to start the process of enrolling newborns,agency spokeswoman Tiffany Vause said in an e-mail response to questions.

But Michael Garner, president of the Florida Association of Health Plans, said the industry complied with the requirements morethan 90 percent of the time and that many plans were "almost perfect." He said HMOs disagree with the way the agency hasinterpreted contracts and considered documents that the plans provided.

"There's no malfeasance,'' Garner said. "No one is trying to hurt the state. No one is trying to hurt the health plans.''

The largest chunk of the potential fines, $20.9 million, would be imposed on two HMOs run by WellCare Health Plans,according to AHCA. This appears to be unrelated to repayments WellCare made last year following a federal investigation intocharges of Medicaid fraud.

The second-largest amount, about $6 million, would be imposed on Amerigroup.

Other HMOs with smaller potential fines are Humana, UnitedHealthcare, Vista, Citrus Health Care, JMH Health Plan, PreferredMedical Plan, Universal Health Care and Total Health Choice. Healthy Palm Beaches has paid a $90,000 fine.

Amerigroup addressed the issue in a filing last week with the Securities and Exchange Commission. Amerigroup said the stateMedicaid program rejected an appeal May 26, but the company will continue to oppose the fines.

"We are evaluating our appeal rights and believe that Amerigroup Florida has substantial defenses to the claims asserted byAHCA and will defend against the imposition of the claims vigorously,'' the filing said.

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