A state health department contractor, whose faltering payments system has led to a scathing scrutiny, pledged again on Tuesday to improve its performance.
Monica McNeil, CEO of Optum, a company that addresses claims for behavioral health and addiction services, acknowledged that its payment system doesn’t always work properly. She told members of several General Assembly committees that the company, a subsidiary of health services giant United Behavioral Health, was “committed to doing better going forward”.
While the company’s goal is to provide fast and accurate payments to health care providers in the state, she said, “I am not proud of all the challenges we faced…”
Optum is in the middle of a five-year contract with the Maryland Department of Health. A lengthy review of Optum’s performance, released Friday by the Legislative Audit Office, said the company’s payments system had not been adequately tested before launch. As a result, the auditors concluded that more than $220 million in payments for behavioral health services lacked appropriate documentation or were not recovered.
Shortcomings in the Optum system have delayed payments to providers, who have experienced an increase in the number of cases since the pandemic began. One advocate said that many providers had to spend long hours working with claims-reconciling tools to correct errors.
Loopholes in the system prevented Maryland from taking advantage of nearly $28.8 million in federal reimbursement. The company processes more than $1 billion in claims each year, many of which are funded by Medicaid.
Although McNeil and a second senior company official said Optum is turning things around, a top health provider advocate said payments are often late and inaccurate. “In case you have the impression that Optum problems have been fixed, I am here to tell you that they are not,” said Laurie Doyle, director of public policy for the Community Behavioral Health Association in Maryland.
Doyle said the company’s use of manual processing far exceeds industry standards and serves as a “workaround for its system flaw.” She also said that the company’s security flaws put patients’ personal information at risk.
“The state picked the wrong seller, one who wasn’t ready for the job,” Doyle said.
There was broad consensus that Optum would not renew when her contract expires in two years. Deputy Health Secretary Steve Shaw told lawmakers that the agency intends to launch a new purchase by the end of December, to allow for a new vendor to be selected and to test their health claims system.
Meanwhile, “they remained our contractor,” he said. “(Optum) is working, but we need to make major improvements over the next year.”
Remarkably, McNeil, CEO of Optum, appears to have admitted that her company will have the boot up in 24 months. She noted that her company’s contract with the state includes “requirements about moving… to a new vendor.”
Lawmakers have lobbied Health Department officials over their oversight of the Optum contract and their failure, so far, to extract concessions from the company.
Suggested by Del. Shane Pendergrass (D-Howard), chairman emeritus of the House Health and Governmental Operations Committee, said it appears that the refund provisions were either not included or were not implemented.
“I don’t understand that you are responsible for this mess,” she said. “How much did this cost Maryland?” It also sought the whereabouts of Health Minister Dennis Schrader, who did not attend the hearing.
“There has to be something in the contract that says if you are responsible, you are negligent, and it costs the state money, and the state can go ahead and try to get that money back,” the head of health and government operations said. Joslin A. Peña-Melnik (De Prince George). “We need to integrate. This is taxpayer money.”
Other lawmakers expressed surprise that Optum did not realize it was in compliance with the terms of the state’s “immediate payments” law.
Yi said the agency is “fining” Optum, but did not disclose the dollar amount. He said that the agency will consult with its lawyers and respond to the committees’ questions in writing.