A state contractor hasn't been paying health providers, who may soon be forced to shutter.

Three weeks ago, the week before the Florida 2022 legislative session began, a reporter-friend from D.C. reached out to me with a story.

The private contractor that solely administers Florida’s Medicaid program for its sickest low-income children had stopped paying its bills. Now hundreds, potentially thousands, of children across the state were at risk of losing care.

My friend put me in contact with AnnMarie Sossong, a parent and nursing student in Marion County, Florida. Sossong told me about how she was stranded during the pandemic, with no one to help care for her disabled 15-year-old son. The company that dispatched caregivers to her home to help her son with his daily activities, like bathing and eating, had shut down.

The business shuttered because it hadn’t received payment from the state’s contractor for any of its 26 clients, including Sossong’s son, since Oct. 1 — about $144,000.

Now, Sossong and her husband were caring for their son, and she was considering leaving school because she couldn’t manage both her studies and his treatment.

In November, Sossong reported the problem to Sunshine Health, the insurance company that was responsible for paying for his care.

“They told me they’d get to it by January 31st,” Sossong told me by phone on Thurs. Jan. 13. “I’ve called every single other provider in the area. No one would take him.

“One guy talked to me at length, he’s the one who told me a lot of providers were shutting down because they weren’t getting paid.”

Sossong put me in touch with Lavette Gulley, the owner of the company Serenity Companion Service Inc, which had stopped visiting Sossong’s son because it hadn’t been paid.

Gulley told me on the morning of Mon. Jan. 10 that she closed on the first of the month. She said every single claim she had submitted to Sunshine Health since Oct. 1 had been denied. She said she was getting an attorney, and that she had been complaining to Sunshine since Oct. 25 with no effect.

“I have a screenshot where I stayed on the phone for eight hours and 15 minutes,” Gulley said. “I’m going to try not to cry. This has been really crazy.”

How many more Gulleys are out there? At least six.

In the past three weeks, I’ve talked to seven providers, including Gulley, who operate in 10 different counties across Florida, who’ve struggled to get paid by Sunshine since October. All seven providers have complained to Sunshine in the past three months, sometimes multiple times. Six providers also complained to the state. At least two providers also filed HIPAA violations with the state because one received the other’s patient authorizations, federally protected information. Many of them have also taken to Facebook, desperately seeking help and validation from their colleagues.

“Yes, ma’am, it is widespread,” Myron Scott, owner of Omega Behavior Analysis in Marion County, told me on Thurs. Jan. 13 regarding the data issues. “You can see that from the Facebook group.”

“It’s the whole state of Florida,” she continued. “I’ve got colleagues in Orlando and Miami and we’re all saying the same thing. … It seems like you call them and they're not even sure what to tell you, and just pass you along. It's like ping-pong."

Scott said she sees one CMS Medicaid child and hasn’t been able to bill for him through Sunshine since Oct. 1. “I still provide services for him, basically for free."

The seven providers together treat about 200 CMS Medicaid kids, according to my interviews. Of the 2.7 million kids on Medicaid, the CMS Medicaid plan is reserved for the sickest low-income children in Florida, including Sossong’s son. I asked the providers and Sossong to describe the CMS Medicaid kids: autistic, behaviorally challenged, disabled, immune deficient, medically complex.

I don’t know how many of these children are in jeopardy of losing access to care, or how many already have. But there are more than 85,000 of these children on the CMS Medicaid plan in Florida, according to state December Medicaid enrollment data.

Sunshine’s responsible for paying for all of them.

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Steve Caton helps to run his wife Elise’s pediatric occupational and speech clinic called The Lamp Post Therapy Center in Alachua County.

“We have had 99% of our claims to Sunshine denied for fake reasons since the 10/1 merger,” Caton wrote to me by email on Mon. Jan. 17 regarding payment for services to Medicaid CMS children. “It’s beyond absurd what they are doing.”

Caton said that they see six CMS Medicaid kids at the clinic.

“The kids really rely on this therapy,” Caton told me by phone on Tues. Jan. 18. “I’m still seeing them but I’m getting really close to stopping doing that.”

***

What I learned in the last three weeks is that providers’ claims were being denied, in part, because Sunshine had made some grave data errors when it began administering Florida’s CMS Medicaid plan on Oct. 1.

Wellcare, a different health insurance company, had been managing the CMS Medicaid plan until Oct. 1. Then, Sunshine merged with Wellcare, and became responsible for the children’s care until its contract with the state ends in 2023.

It was during the merger with Wellcare that Sunshine screwed up what’s known as provider credentialing data for the CMS Medicaid plan, causing providers to no longer get paid.

In Gulley’s case, Sunshine had mismatched her federal tax ID and national provider (NPI) code with her company name. As a result, her agency had been registered as a doctor’s office, which cannot provide services in patients’ homes, like her business does.

So, all of her claims were denied.

Even though most of the providers I spoke with had complained to Sunshine and to the state, sometimes multiple times, in multiple ways, no one helped them for months.

None of the providers made traction until January, three months after the merger, when I started asking questions about what was going on.

Conveniently, the 2022 Florida lawmaking session is going on right now, so lawmakers and agencies are more accessible, and responsive, than usual…

***

After I got off the phone with Gulley on the morning of Mon. Jan. 10, I reached out to the Florida Agency for Health Care Administration, which regulates Medicaid in Florida, about what I was hearing.

Later that day, Gulley said, she heard for the first time from a person at the company who seemed intent on fixing her problems — Sunshine’s Chief Operating Officer Bill Kruegel.

On Wed. Jan. 12, after the Florida Senate Appropriations Subcommittee on Health and Human Services met for the first time this legislative session, I asked the chair, Sen. Aaron Bean (R-Fernandina Beach), if he was aware of the payment problems.

“I don’t think it’s a widespread problem because it’s the first I’ve heard of it,” Bean told me.

But when I approached Bean again about it after his committee met the following week, on Wed. Jan. 19, he told me he’d investigate.

That evening, one speech pathologist, Andrea Clark, decided to take a more direct approach.

Clark founded TherHappy Therapy Services, a speech, occupational and physical therapy nonprofit that sees 400 children, 120 of which are CMS Medicaid, in Hernando, Hillsborough, and Pasco counties.

Since Oct. 1, she had been receiving “a variety of unsubstantiated and inaccurate” denials for many of the CMS Medicaid children she treats for myriad services. She estimated Sunshine owed her upwards of $100,000, and said she would be forced to close if she weren’t paid in the next month.

Clark had already sent letters complaining about the nonpayment issue to AHCA and to Kruegel at Sunshine but wasn’t making headway.

So, in the evening on Wed. Jan. 19, Clark said, a mutual friend emailed House Speaker Chris Sprowls (R-Palm Harbor) an executive summary describing the problem and the damages she had incurred.

The next morning, Clark said, she heard from AHCA Chief of Staff Cody Farrill, and the day after from AHCA Assistant Deputy Secretary for Medicaid Operations Brian Meyer.

“They said they were actively researching and looking into it,” Clark said on the phone on Sunday.

***

On the afternoon of Thurs. Jan. 20, Bean followed up with me by email.

“I reached out to the company directly and they acknowledged there is an issue, due to the merger and acquisition of Wellcare — that left some vendors not getting paid on time.

“I was told these invoices and claims should be processed by the end of this month.”

That same day, Kruegel, Sunshine’s COO, put out a statement on the company’s website acknowledging the problem for the first time.

“We recently discovered an IT issue impacting claims payments for some Children’s Medical Services Health Plan members after Sunshine Health’s operation of the health plan began on October 1, 2021,” Kruegel wrote. “We are diligently working to address the issue, and most of the impacted providers should have already started to receive payment for incorrectly rejected claims.”

Recently discovered? Shouldn’t Sunshine have been aware of the issue for months? I called and texted a number I was given for Kruegel on Fri. Jan. 21, but I never heard back.

“As soon as we were made aware of this issue, the Department of Health immediately addressed it directly with Sunshine Health,” Florida DOH spokesperson Weesam Khoury wrote to me by email on Thursday. (AHCA oversees Medicaid, but DOH oversees the CMS Medicaid plan.) “We are dedicated to ensuring all impacted providers receive immediate payment by the end of this month, as service providers play a critical role in protecting and caring for our vulnerable populations in Florida.”

Neither the state nor the company have given me details yet like how widespread the payment problem is or how many providers or Medicaid recipients have been affected.

***

Why did nothing happen until I, a member of the press, brought the case to Bean, a state senator and member of Republican leadership in that chamber?

Why did it take a letter to the House speaker before Clark got help on the matter?

What does this snapshot of Sunshine’s transition into managing the care of more than 85,000 medically needy children say about how Medicaid is being administered in general in Florida?

These are a few of the questions on my mind.

About a decade ago, Florida exported nearly the entire management of its $31 billion Medicaid program serving five million low-income people to a handful of companies like Sunshine Health — a subsidiary of the multi-national health company Centene, ranked #24 on the Fortune 500 2021 list.

Florida is one of 40 states that have privatized the public, mostly federally funded, entitlement program through this “managed care” system.

The private companies that now mostly manage Medicaid in Florida are middlemen, taking a monthly fee from the state to pay out all the claims for Medicaid services.

Whatever the companies don’t pay out for care, they pocket.

So it would seem Sunshine wouldn’t have an incentive to fix these kinds of problems.

But, according to federal law, the company must spend at least 80 percent of its annual revenue on medical care, or issue rebates to its customers. The state will audit Sunshine sometime next year to review this year’s transactions.

Since 2018, the state has found Sunshine responsible for 45 Medicaid violations, levying $2.4 million in fines against it, the second highest penalty, according to AHCA compliance data. Nine of those violations were related to “network adequacy standards,” eight were related to “claims and provider payment,” and six of them were related to “untimely and/or inaccurate reporting.”

From 2014-2018, the state found Sunshine responsible for 88 violations and fined it $16 million in sanctions, by far the most, with the second-highest fine coming in at $9.3 million. It was penalized six times for performance measures and four times for failing to accurately report.

Alan Levine is a Tennessee-based hospital executive and the original architect of Florida’s managed care program. He told me by phone on Thursday that when he was AHCA secretary under former Republican Gov. Jeb Bush, he wanted to create the managed care program, in part, to help prevent Medicaid fraud.

“The idea was to shift the risk of fraud to the companies, and to pay them a fixed premium,” Levine said. “That would incentivize them to kick the bad guys out.

“I was trying to get the state out of the business of being an insurer, and in the business of paying insurers to do what they do — but also to regulate them.”

Levine said that the state can terminate its contract with Sunshine Health if they aren’t paying for medically necessary care or don’t have a proper grievance process.

“If they don’t have that, they are probably in violation of their contract with the state,” he said. “If I were the state, I’d send a team in to see what was going on.”

***

This story comes to an end, my friends, with both the good and the bad.

The good news is some providers are starting to get paid. The bad news is the providers who are getting paid are dealing with an administrative nightmare.

In Gulley’s case, she had to resubmit all the expired claims for her Marion home health agency.

“They’re on it, but they’re making me work too,” Gulley told me on the phone on Thurs. Jan. 20.

The next day, Gulley finally received a full month’s payment from Sunshine — $48,000 — enabling her on Monday to re-open.

Clark, the speech pathologist from Pasco, said she's been paid approximately $50,000 out of what she was owed by Sunshine in the last week, and is grateful to the state for helping her recover it.

“I don’t believe that if the state had not specifically addressed these issues, they would have done what they have,” Clark said. “The state lit a fire under them.”

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Hundreds, maybe thousands, of Florida Medicaid kids at risk of losing care