Problems hold up Medicaid payments

Kirsten Searer

Monday, Jan. 12, 2004 | 9:44 a.m.

Doctors and hospitals throughout Nevada are up in arms because a statewide computer glitch has held up millions of dollars in Medicaid payments since early October.

"We have hundreds and hundreds of complaints coming in, so before we have a complete and total meltdown, they need to act," said Dr. John Nowins, who heads the Clark County OB-GYN Society.

The system was designed in a hurry to comply with the new Health Insurance Portability and Accountability Act, also called HIPAA, said Charles Duarte, administrator of Nevada's Division of Health Care Financing and Policy.

It typically would take up to three years to design a new computer system, but Nevada was given just one year, he said. The problems should be ironed out in the next few weeks, he said.

The payment problem affects all doctors, including those in private practice, nursing homes and hospitals.

The Sahara and Flamingo surgery centers in Las Vegas, for example, are due about $253,000, said operations director Stephanie Finkelstein.

Since late September, just 98 of the 353 Medicaid surgeries performed at the Sahara Surgery Center and 30 of the 133 surgeries done at the Flamingo Surgery Center have been reimbursed by the state, Finkelstein said. The centers operate on underprivileged children with maladies such as abscessed teeth, but may not be able to continue to do so unless the payment system dramatically improves, she said.

"Quite frankly, we're not going to be able to continue to offer this service under the current conditions," she said.

The state also owes millions of dollars to hospitals, said Bill Welch, president and CEO of the Nevada Hospital Association, which has been meeting weekly with the state to solve the problem.

Welch said he is seeing progress, especially with claims filed by rural hospitals.

But some smaller hospitals receive up to half of their income from Medicaid payments, and the situation is creating an "accounting nightmare" for hospitals trying to wrap up their yearly budgets, Welch said.

"It has been an extremely difficult situation," he said. "I will tell you, there is a lot of anxiousness and frustration. At the same time, I believe the parties have been getting together trying to work through this."

Some hospitals have accepted the state's offer to advance partial payments, but even those hospitals are a month behind on cash flow, Welch said.

The reimbursement problems have been exacerbated because the state has delayed payment to some doctors who incorrectly filled out forms required to comply with HIPAA.

Health care consultant Gale Koch said she knows doctors who didn't receive payments for months because they were unaware of new codes required to conform with HIPAA. But the state sometimes rejects forms without making it clear why doctors are not being paid, she said.

"They're holding up claims and sending it back because you don't have every line correct," she said.

Duarte said state employees have conducted several regional workshops to help the medical community learn how to fill out the forms.

Koch and others said they don't know of any patients that have been turned away because hospital and doctors were not paid, but "you take a provider who has high payments from Medicaid, and four months without money can bankrupt them," she said.

First Health Services Corp., the intermediary between the state and doctors, designed the system and is working on a quick solution, said regional vice president Tim Brewer.

The company has made "some significant progress in the last week," he said.

"This is a short-term situation," Brewer said. "We're very close to resolving these problems. We have made commitments to the state. We believe the majority of the issues will be resolved by the end of the month."