Sunshine Health Plan settles $9M+ fine for violating Medicaid contract

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Florida’s largest Medicaid managed care plan paid a $9 million fine this week for failing to pay, or to timely pay, 121,227 claims from health care providers.

Agency for Health Care Administration (AHCA) Communications Director Brock Juarez told Florida Politics Sunshine Health Plan paid the fine April 13, five days before it was due.

Meanwhile, the ban on auto enrollment in the Medicaid managed care plan remains in effect, Juarez said.

Medicaid Assistant Deputy Secretary Brian Meyer on March 17 sent a letter to Sunshine President and CEO Nathan Landsbaum advising him of the $9,092,025 penalty and other corrective actions the state was taking against the health plan after failing to pay the providers.

The state levied a $75 fine for each delinquent payment. Meyer said there were 121,277 claims from health care providers in which payments were either delayed or not made at all. The claims were identified either through complaints made to the state from providers or by the health plan itself.

The $9 million fine is the largest the state has levied against a Medicaid managed care plan for contract violations since the inception of the Medicaid managed care program. Florida Politics first reported the historic fine on March 23.

Sunshine officials have previously stated that the errors were a result of a software issue following the company’s merger last year with WellCare which, at the time of the merger, had been the state’s second largest Medicaid managed care plan behind Sunshine. Previous news accounts detailed how, for months, Sunshine 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.

As of March 31, there were more than 5.18 million people enrolled in Florida’s Medicaid program, which is an all-time high due to the COVID-19 pandemic and the Medicaid rules involving the public health emergency.

Florida has a Medicaid managed care mandate for most people who qualify, whether they are young or old. As a result of the managed care mandate there are 4,075,825 beneficiaries who were enrolled in a Medicaid managed care plan as of March 31. No health plan has more Medicaid enrollees than Sunshine Health, which dominates the market share with 38% of the enrollees. Sunshine’s footprint in the Medicaid managed care marketplace is larger than that of Humana Medical Plan and Simply Healthcare Plans, the second and third largest plans, respectively, combined.