Obamacare Contractor Blamed for Slow Medicare Payments to Hospitals
Jeryl Bier
January 2, 2014
The contractor building the financial management system for Healthcare.gov is being blamed by a Houston hospital for delayed Medicare reimbursements that have caused the hospital to miss payrolls for weeks. Novitas Solutions is the federal government's new Medicare payment processor for the south-central region of the country hired by the Centers for Medicare and Medicaid Services (CMS), a division of the Department of Health and Human Services (HHS.) ABC-KTRK in Houston reports:
Novitas's direct connection to Healthcare.gov stems from an emergency, no-bid contract for "financial management services" awarded in August and first reported by THE WEEKLY STANDARD in September. The services required included accounting, tracking of accounts receivable and accounts payable, documenting funds collected by CMS, and data validation, among other things. CMS justified the no-bid award because the "prospect of a delay in implementing the Marketplace by the operational date of January 1, 2014, even for a few days, would result in severe consequences, financial and other" and that the services required were "beyond what was initially anticipated and beyond CMS' currently available resources."
Novitas did not respond to KTRK for its story, and so far has not responded to a request for comment since the story ran. In the past, Novitas has referred requests for comment to HHS.
Despite initially promising more information about the August contract, HHS/CMS has ignored repeated requests for clarification about the nature of the work and how it relates to the mission of Healthcare.gov. HHS has not responded to a request for comment about the reports of slow payments to hospitals either.
Obamacare may have promised health insurance for the masses. But on its first day, it’s left more Americans without coverage than before the law was passed.
According to the CEO Jason Leday, more than 150 employees haven't been paid in nearly a month.
"I understand that they have children and a house payment, bills. Not getting paid is wow," nearby resident Theresa Gutierrez said.
The hospital is strapped for cash not because its not making money, but because Leday says a new Medicare payment facilitator named Novitas Solutions is taking too way long to pay out Medicare claims to the hospital.
Leday says he's owed nearly $3 million in payments from Medicare and can't make payroll...
The Texas Medical Association says they are familiar with complaints like this one regarding the medicare payment facilitator- and a representative told us smaller community hospitals like this one are in similar situations.Novitas also runs the south-central region's Medicare website which was launched just two days before the October 1 launch of Healthcare.gov. As THE WEEKLY STANDARD reported on December 19, that site has experienced problems reminiscent of Healthcare.gov's troubles, and the site will not be fully operational until well into 2014.
Novitas's direct connection to Healthcare.gov stems from an emergency, no-bid contract for "financial management services" awarded in August and first reported by THE WEEKLY STANDARD in September. The services required included accounting, tracking of accounts receivable and accounts payable, documenting funds collected by CMS, and data validation, among other things. CMS justified the no-bid award because the "prospect of a delay in implementing the Marketplace by the operational date of January 1, 2014, even for a few days, would result in severe consequences, financial and other" and that the services required were "beyond what was initially anticipated and beyond CMS' currently available resources."
Novitas did not respond to KTRK for its story, and so far has not responded to a request for comment since the story ran. In the past, Novitas has referred requests for comment to HHS.
Despite initially promising more information about the August contract, HHS/CMS has ignored repeated requests for clarification about the nature of the work and how it relates to the mission of Healthcare.gov. HHS has not responded to a request for comment about the reports of slow payments to hospitals either.
Obamacare may have promised health insurance for the masses. But on its first day, it’s left more Americans without coverage than before the law was passed.
Posted By Sarah Hurtubise
More than 4.7 million Americans had their health insurance canceled as a result of any of the thousand-plus-page law’s new rules, the Associated Press reports, but the Department of Health and Human Services (HHS) confirmed Tuesday that between federal and state exchanges, just 2 million Americans have signed up for Obamacare coverage. (RELATED: Obama administration announces net loss of at least 3 million insurance plans)
The Obama administration has yet to announce the final tally of full enrollments, which are only confirmed once customers have made their first payment, but Cato Institute health policy expert Michael Cannonwarns that not all those who signed up will complete their purchases, potentially leaving the White House with an even lower bottom line.
Even without the full number of enrollments, Obamacare’s current net effect is clearly in favor of cancellations. Millions are already seeing Obamacare’s adverse effects — largely due to more mandates for more services.
The health-care law requires that all insurance plans cover 10 “essential benefits,” eliminating millions of plans that don’t fit the bill and boosting costs for consumers that have to purchase coverage for services they may not want or need.
All plans must include maternity coverage, for example — including plans for men and post-menopausal women. Even customers without children must purchase plans that cover pediatric services. Other newly established essential benefits include hospitalization, mental-health services and preventive and wellness services.
While a grandfather clause allowed plans purchased before Obamacare passed in 2010 to continue, HHS estimated that 40-67 percent of plans would eventually lose their status and cost millions of Americans their insurance plans.
The Obama administration eventually admitted Obamacare’s role in crushing many Americans’ coverage and has scrambled to belatedly make up for it. President Barack Obama first attempted to reinstate the canceled coverage for just one more year, but many insurers chose not to restart already-canceled plans.
The latest stopgap, announced just before the deadline to purchase exchange coverage, is to allow those with canceled plans a one-year “hardship exemption” from the individual mandate to have medical coverage, but insurance companies didn’t see this as an adequate solution either.
“This type of last-minute change will cause tremendous instability in the marketplace and lead to further confusion and disruption for consumers,” Robert Zirkelbach, a spokesman for the trade group America’s Health Insurance Plans, told reporters.
While attempts to fix the cancellations are floundering, the Obama administration is backtracking on their enrollments goals as well. White House officials have now abandoned HHS Secretary Kathleen Sebelius’ benchmark of seven million enrollment by March 2014. Instead, Obama emphasized that it’s Obamacare’s net effect that matters most. (RELATED: White House denies promising seven million Obamacare signups: ‘That was never our target number’)
“Ultimately I think I’ll be judged on whether this thing is better for people overall,” Obama told NBC’s Chuck Todd in November.
The overall effect on the first day is a net loss of several million Americans, who are now without health coverage.
The Obama administration has yet to announce the final tally of full enrollments, which are only confirmed once customers have made their first payment, but Cato Institute health policy expert Michael Cannonwarns that not all those who signed up will complete their purchases, potentially leaving the White House with an even lower bottom line.
Even without the full number of enrollments, Obamacare’s current net effect is clearly in favor of cancellations. Millions are already seeing Obamacare’s adverse effects — largely due to more mandates for more services.
The health-care law requires that all insurance plans cover 10 “essential benefits,” eliminating millions of plans that don’t fit the bill and boosting costs for consumers that have to purchase coverage for services they may not want or need.
All plans must include maternity coverage, for example — including plans for men and post-menopausal women. Even customers without children must purchase plans that cover pediatric services. Other newly established essential benefits include hospitalization, mental-health services and preventive and wellness services.
While a grandfather clause allowed plans purchased before Obamacare passed in 2010 to continue, HHS estimated that 40-67 percent of plans would eventually lose their status and cost millions of Americans their insurance plans.
The Obama administration eventually admitted Obamacare’s role in crushing many Americans’ coverage and has scrambled to belatedly make up for it. President Barack Obama first attempted to reinstate the canceled coverage for just one more year, but many insurers chose not to restart already-canceled plans.
The latest stopgap, announced just before the deadline to purchase exchange coverage, is to allow those with canceled plans a one-year “hardship exemption” from the individual mandate to have medical coverage, but insurance companies didn’t see this as an adequate solution either.
“This type of last-minute change will cause tremendous instability in the marketplace and lead to further confusion and disruption for consumers,” Robert Zirkelbach, a spokesman for the trade group America’s Health Insurance Plans, told reporters.
While attempts to fix the cancellations are floundering, the Obama administration is backtracking on their enrollments goals as well. White House officials have now abandoned HHS Secretary Kathleen Sebelius’ benchmark of seven million enrollment by March 2014. Instead, Obama emphasized that it’s Obamacare’s net effect that matters most. (RELATED: White House denies promising seven million Obamacare signups: ‘That was never our target number’)
“Ultimately I think I’ll be judged on whether this thing is better for people overall,” Obama told NBC’s Chuck Todd in November.
The overall effect on the first day is a net loss of several million Americans, who are now without health coverage.
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