Report: Quality of Medicaid care down significantly

May 12, 2019

The quality of care provided to low-income New Mexicans through Medicaid appears to have dropped significantly in recent years, and the state chose not to collect millions in penalties from providers for a variety of problems, according to a report issued by the Legislative Finance Committee.

The report said the New Mexico Human Services Department is funneling most Medicaid funds into medical care — more than 96 percent — and spending just a fraction on administrative costs. In fact, among states with a similar health care landscape, New Mexico is spending more Medicaid money directly on medical services than any other comparable state. That is a positive accomplishment, state officials said.

But the report also indicates the state’s low spending on administrative expenses may have gone too far, and led the department to shortchange its ability to effectively oversee Medicaid providers who failed to meet performance standards on big-ticket items, including maternal health care and mental health oversight for patients with depression.

Penalties and other fines issued against state Medicaid providers increased more than 400 percent between 2014 and 2017, the first four years of the state’s contract with Centennial Care. That figure, coupled with falling provider revenue, “point to a significant drop in performance,” according to the report.

Most of the state’s Medicaid providers were fined for failing to meet performance standards around prenatal and postpartum care, as well as problems properly managing diabetes, blood pressure and asthma, among other violations.

The state chose not to enforce certain penalties in 2017 for behavioral health measures that most Medicaid providers were unable to meet, or for which they could not provide data. That included not fining providers that failed to ensure adults diagnosed with new episodes of severe depression received continuous treatment with anti-depression medication over short- and long-term periods.

It was not the first time unmet measures were eliminated rather than enforced. In 2015, the state also dropped requirements related to home health — a health care model established to provided consolidated services in specific locations or homes — “when it became clear the initial timeline” would not be met.

If the state had enforced the fines associated with failing to meet performance goals in 2017, it would have collected more than $8.3 million. Not only did the state lose out on millions, the report said, but telling companies they would not be fined may have disincentivized good performance.

Human Services Secretary David Scrase, a physician and former president of Presbyterian Health Plan, one of the state’s Medicaid providers, said measuring health performance is a complex assessment.

“In general, the report shows we have done a great job,” said Scrase, recently appointed by Gov. Michelle Lujan Grisham. “The issue of an increase in performance penalties is something we have to look at closely.”

However, he said there are a number of reasons for the state to chose not to enforce penalties and said it is a “best practice” not to take fines for unattainable performance goals.

Scrase said the bigger question is: “What do we need to do differently to ensure New Mexicans are getting better care?”

Blue Cross Blue Shield, United Health Care, Presbyterian Health Plan and Molina Health Care, the state’s four Medicaid providers in 2017, were fined $8.7 million for failing to meet goals for managing asthma, blood pressure, diabetes and prenatal and postpartum care.

As of January, the state is no longer contracted with United or Molina.

The report also found meaningful oversight was limited by a lack of transparency in certain financial reporting.

While the state’s criteria for what Medicaid providers must report appears clear, the results of these financial reports were inconsistent, according to the committee report. In some cases, administrative costs are wrapped into the cost of prescriptions, making it appear that companies are spending more on medical care than they actually are.

“Meaningful department oversight faces a number of hurdles,” the report states. “Without greater transparency and consistency in financial reporting, [Human Services Department’s] ability to exercise meaningful oversight is limited, and neither HSD nor LFC staff can accurately calculate program-wide costs.”

Additionally, the report said it was unclear where money from $660 million in overpaid funds reimbursed by providers to the state between 2014 and 2017 went. The report said after multiple requests, Human Services was still working to account for an exact breakdown of how the money returned was spent. Scrase said 78 percent went back to the federal government. The rest — roughly $143 million — was returned to the state’s general fund.