Health Dept. owes MCS-HMO $242M

Written by  //  July 11, 2011  //  Financial District, Insurance  //  No comments

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MCS-HMO walked away from MI Salud last week after months of negotiations.

MCS-HMO, the private company that for the past nine months managed MI Salud health benefits throughout most of the island, presented the Health Services Administration (known as ASES in Spanish) with documents Monday confirming it is owed $242.6 million.

Some of the amounts date to the former Health Reform program under prior administrations.

In a statement issued to the media, the company urged ASES to pay the debt as soon as possible to “provide stability to the MI Salud provider network and ensure a smooth transition to a new administrator.”

“This is the most urgent need to be addressed to enable an orderly and seamless transition in MI Salud,” said MCS-HMO President José Durán. “It is very important that we pay provider claims as soon as possible to ensure they remain in the MI Salud program, while carrying out the transition to the new administrator.”

MI Salud walked away from the government’s MI Salud healthcare program last week after unsuccessfully attempting to negotiate payments with the government. Health Department officials confirmed the breakup Thursday.

Among the payments pending are: more than $34.8 million in premiums due under the former Health Reform prior to October 2010; some $15.3 million in retained premiums under MI Salud since October 2010; more than $1.3 million in billing discrepancies for which ASES needs to update their beneficiary records; more than $190 million in late payments for services rendered between May and July; and more than $320,000 in administrative payments for the April-July period.

“The amount owed by ASES represents more than two and a half months of premiums,” Durán said. “We want to collect outstanding premiums and work with ASES to expedite payments to providers. In addition, we are meeting with providers to encourage them to continue providing services to MI Salud beneficiaries while ASES addresses its cash flow situation.”

The executive also warned about the risk that would arise if ASES pays providers directly, as the agency said over the weekend that it was considering. Durán said ASES “does not have the operational capacity or administrative infrastructure to confirm if claims are eligible, which may be duplicated, which may have been paid already, which contain services that are not covered, among others.”

Snowball effect
The split between MCS-HMO and ASES last week is putting at risk the health coverage provided to more than 800,000 medically indigent Puerto Rico residents. Furthermore, the company’s exit is also affecting providers that over the weekend offered mixed opinions as to whether they will continue honoring the MCS plan until a new health insurer is found.

Members of the Asociación de IPAs, which groups health service providers islandwide, is expected to submit a plan to the government this week outlining how it will address the situation, association Vice President Joaquín Vargas said.

The proposal will suggest ways how more MI Salud funds can reach patients directly.

Furthermore, he said doctors and other health care system components will not abandon services given to the thousands of patients who have been affected by the government’s decision to cancel the contract with MCS-HMO after failing to reach agreement on new rates for health care providers under the plan.

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