UMC says it’s owed $2.5 million

By Marshall Allen

Thursday, Dec. 21, 2006 | 7:21 a.m.

University Medical Center officials say NevadaCare insurance company owes the public hospital between $2.5 million and $2.8 million - their largest unpaid bill ever for an insurer - for services provided to Medicaid patients in 2004 and 2005.

NevadaCare covered about 45,000 Medicaid patients until its contract was taken over by Anthem Blue Cross and Blue Shield on Nov. 1.

Kathy Silver, UMC's associate administrator for managed care and business development, said the hospital canceled its NevadaCare contract in February, about the time the insurer was losing the contract for Medicaid, the government's health care program for the poor.

NevadaCare now insures about 20,000 Nevadans, including employees of Auto Nation, the Education Support Employees Association and the Henderson Chamber of Commerce. It is affiliated with Summerlin Life & Health Insurance and is based in Arizona.

A NevadaCare spokesman said the bills are unpaid because the company has not yet reconciled its accounts with UMC as it closes the books on its Medicaid contract. The account will be cleared, he said.

Silver said NevadaCare owes UMC additional money from 2006, but she couldn't estimate the amount. She said the volume of unpaid bills, and the hassles of trying to get them paid, are unprecedented.

"I don't recall ever having to settle with anyone on these types of issues," Silver said. "What's different here is that either by design or by default they have had difficulty paying claims."

NevadaCare is also being sued for unpaid bills by Nevada Cancer Center and Anesthesiology Consultants Inc. They say the insurer owes them more than $40,000 and $50,000, respectively. UMC officials say they hope to avoid arbitration with NevadaCare or filing a lawsuit.

NevadaCare had the Medicaid contract for 14 years, and most recently shared it with Health Plan of Nevada, a subsidiary of the state's largest insurer, Sierra Health Services. NevadaCare received premiums from Nevada Medicaid on a capitation basis - a set amount per person, per month, depending on age and gender - plus additional special payments, to fund health care for individual patients. Patients were treated at hospitals and other medical facilities, which in turn billed NevadaCare for reimbursement.

NevadaCare performed poorly, according to a June 2005 report on the Medicaid program to the Nevada Division of Health Care Financing and Policy. The insurer scored below the 25th percentile nationally on all eight quality measures monitored. The report found "inadequate follow-through on quality improvement activities" and required NevadaCare to submit a corrective action plan.

The problem of overdue payments to hospitals was not limited to UMC. In June the Nevada Hospital Association polled 16 of the state's largest hospitals and found that NevadaCare was more than 60 days late in paying $5.2 million in bills. Other local hospitals don't share UMC's current complaint. The Valley Health System, which operates four hospitals, is expecting a check Friday to clear its claims with NevadaCare for Medicaid patients, a spokeswoman said. Sunrise Health officials said NevadaCare overpaid them.

NevadaCare spokesman Larry Hurst said the nonpayment to UMC is part of the process of phasing out of the Medicaid program. On Oct. 12 the insurance company sent a letter to all Nevada Medicaid providers to settle any accounts. He said the company received a spreadsheet from UMC on Wednesday detailing the money outstanding, and "as far as I know there are no issues."

"I'm sure there's something that's owed, and of course UMC will be paid according to the contract," Hurst said.

Hurst could not say why the bills had gone unpaid for years, but it was possible the claims were not submitted on time. Silver said UMC typically receives payment within 30 days and that there's an electronic trail showing timely billing.

"For a while we were mailing things," Silver said. "They would tell us they didn't receive it or it's not in the system. We said: 'We'll hand-deliver a batch to you,' but nobody would sign for it. So finally we said, 'How about we put a FedEx tracking number on it?' All of those things didn't seem to satisfy as proof of timely filing."

Nevada Medicaid Administrator Charles Duarte said he had not heard of any outstanding money owed to UMC. He said the state still holds NevadaCare's $4.3 million bond for any contract issues related to ending the insurance company's contract. The bond is an "incentive to any vendor to make sure things end well," Duarte said.

Hurst said the company is "out of the Medicaid program and looking forward to competing in the commercial market."