Florida Medicaid hits Sunshine Health with $9M sanction for not paying providers’ claims
Medicaid torn newspaper headline on cash

Medicaid headline
The state is giving Sunshine 30 days to pay the fine.

Florida’s largest Medicaid managed care vendor, which came under scrutiny for failing to pay claims for sick children over several months, is being fined a record $9 million by the Agency for Health Care Administration (AHCA).

State regulators also are placing sanctions on Sunshine State Health Plan and requiring the managed care plan to take a series of “corrective” actions before members can be auto-assigned to the plan.

The temporary enrollment ban impacts the Medicaid managed medical assistance and Medicaid managed long term care plans.

“The Agency for Health Care Administration takes our obligations seriously to ensure high quality health care is delivered to all enrollees in the Florida Medicaid program,” states the letter levying the sanctions. That letter was sent by Brian Meyer, assistant deputy secretary for Medicaid, to Sunshine President and CEO Nathan Landsbaum late last week.

The letter to Sunshine stated there were more than 121,000 claims from health care providers in which payments were either delayed or not made at all. The claims were identified either through complaints from providers or by the health plan itself.

Immediate attempts to get comment from Sunshine Health Plan about whether they would appeal were unsuccessful.

Sunshine officials have previously stated that the errors were a result of a software issue following the company’s merger last year with WellCare, the state’s second largest Medicaid managed care plan.

Previous news accounts detailed how, for months, Sunshine had failed to pay providers for some of the state’s severely sick children that receive coverage as part of Medicaid’s children’s medical services portion. At least one provider shut down.

A review of the data shows that 48,694 long-term care claims were denied for allegedly having wrong diagnosis codes. That’s 40% of the 121,227 unpaid claims. That six-figure total, revealed by AHCA, is higher than Sunshine had previously acknowledged.

AHCA levied a fine of $75 for each claim and is asking the company to explain in detail how it has fixed the claims payment process and whether claims have been reprocessed and paid. State officials also want Sunshine to show it can process claims promptly while moving forward and to hold weekly phone calls between AHCA and company officials to update the agency.

The state is giving Sunshine 30 days to pay the fine of $9,092,025. Sunshine has 21 days to contest the fines and sanctions.

Though Sunshine representatives have said the held-up payments have been processed, some organizations told Fresh Take Florida that payment issues continue to pop up. Brendan Ramirez, CEO of Pan American Behavioral Health Services LLC in Orlando, said it took months to negotiate with Sunshine to receive payments his organization was entitled to.

With that payment came a nondisclosure agreement that would have barred Ramirez from speaking publicly.

“They said, ‘Before we wire money into your account, we want you to sign this document,’” Ramirez said, according to Fresh Take Florida.

“I called them back and I said, ‘I’m not signing this. I’m not comfortable with signing this. It’s almost like a document from litigation, and we’re not in litigation. I’m just trying to get money that you guys owe me.’”

He eventually got the more than $230,000 owed to him without signing the nondisclosure agreement.

AHCA does not routinely issue “sanctions” against Medicaid managed care plans, nor are corrective action plans often required.

It is not clear how long the corrective action plan will be in effect, but it won’t be lifted for at least one month. AHCA has put five requirements on the managed care company in the corrective action plan, including a mandate that “at a minimum” the plan shows its processing systems are able to pay claims. Sunshine must also show that the claims processing systems work for at least a 30-day period.

The corrective action plan also requires the health plan to provide a detailed summary showing that all the claims had been reprocessed and paid. Sunshine must provide a detailed description of the steps taken to resolve all identified system issues. Finally, the state is requiring the health plan to offer training to providers on proper claims submission processes.

There are more than 5 million people enrolled in Florida’s Medicaid program today. Most of them are required to enroll in a Medicaid managed care plan. Sunshine Health Plan is the largest Medicaid managed care plan in the state.

Christine Jordan Sexton

Tallahassee-based health care reporter who focuses on health care policy and the politics behind it. Medicaid, health insurance, workers’ compensation, and business and professional regulation are just a few of the things that keep me busy.



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