September 1, 2014

Tallahassee Trend

The $325-Million Billing War

Counties say the state's new Medicaid billing system is overcharging them.

Amy Keller | 6/15/2012
Florida Association of Counties video
The Florida Association of Counties put together a video urging Gov. Scott to veto changes to how counties are billed. He signed the bill into law. Now the two sides are fighting it out in court.

For 40 years, hospitals and nursing homes that care for Medicaid patients have submitted bills to the state, which pays them and then bills a portion of the expenses to the counties where patients reside. Until 2008, the system worked pretty well —?on average, counties paid 90% of the bills that the state submitted to them.

In 2008, the state installed a new billing system to keep pace with growth in the Medicaid program and comply with a new managed care model.

But counties say the new accounting system produced numerous inaccuracies — and they began to delay paying bills they found questionable, paying on average just 74% of what they are billed.

Deadline Pressure

The Agency for Health Care Administration will review 1.2 million contested claims before Aug. 1, the deadline for the state to certify outstanding Medicaid bills in each county. Counties will then have one month to contest the amount. Counties that don’t contest will only be required to pay 85% of the backlog, whereas those that file a petition objecting will be responsible for the total amount certified.

Friction over the billing system grew along with the backlog of unpaid bills, which has hit $325 million. The state wants the money it says the counties owe; the counties, meanwhile, say they’re only refusing to pay bills they believe are incorrect.

In March, the dispute escalated further after Gov. Rick Scott signed a law championed by Sen. Don Gaetz that allows the state to garnish county revenue to pay the uncollected bills. The law allows the state to reduce counties’ share of general state revenue funds over the next five years in order to pay the $325-million backlog. Counties call the law a “backdoor tax hike” on county residents.

“The statewide error rate is 26% — 26% of the bills they give you are wrong. Imagine if your bank statement had an error rate of 26%,” says Cragin Mosteller, communications director for the Florida Association of Counties, which has joined 47 counties in filing a lawsuit.

Among the inaccuracies, counties say, are double billings, incorrect charges and charges for residents who live outside the county being billed. Orange County’s analysis of its Medicaid bills, for instance, turned up $2 million in charges for Medicaid recipients with addresses outside of Florida, the county says. Orange County auditors also say they’ve found $3.5 million since 2005 that appeared to be duplicate billings.

Michelle Dahnke, communications director for the Agency for Health Care Administration, which collects the payments, acknowledges there have been some “hiccups” since changing over to the new system. But getting to the bottom of some issues — such as complaints of duplicate billing — is more complicated. Dahnke says the duplicate billing concerns occur most frequently with nursing home residents. “If there is a questionable address and AHCA sends the bill in January and the county denies it but nobody provides correct information, the system isn’t updated” and the county will continue to be billed for the charges each month. Dahnke says the new law contains requirements that will help cut down on billing mistakes. It requires hospitals and nursing homes to confirm address information, says Dahnke.

Joe Negron
Sen. Joe Negron
Sen. Joe Negron, the bill’s lead negotiator in the Senate, says he believes the allegations are overblown. “Once the economy became challenging for everyone in the 2008 time frame, all of a sudden the counties started paying in the 65% range. I think that the claim of widespread inaccuracies is being used as a pretext for counties simply not paying their fair share.”

Not true, insists George Ralls, department director for Orange County Health Services. “Our interest is to pay the bills that we should be paying, and if that means 100% of what we’ve been billed, then that’s fine.”

Errors have high stakes, Ralls says. “Every dollar that leaves our county for something like this that could be wrong or inappropriate, there are consequences — things that aren’t done locally, that should be done with this money. Things like supporting our indigent medical care programs. All of those things are compromised by this kind of a sloppy process.”

Tags: Politics & Law, Government/Politics & Law, Healthcare

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