Legislature To Study Deal With Idaho's Medicaid Mental Health Contractor Optum

Mar 26, 2015

Rep. John Rusche is a lawmaker from Lewiston. Rusche is also a retired physician.
Credit Boise State Public Radio

Idaho lawmakers have directed their staff to spend the next nine months studying the state’s contract with Optum Idaho, the company that manages outpatient behavioral health services for Medicaid patients.

Since Optum took over outpatient mental health services under Medicaid in September 2013, it has been plagued by problems. The company, which is part of UnitedHealth Group, is under federal investigation for possibly violating the privacy rights of Idaho patients.

As KBSX and the Idaho Statesman reported last year, the providers serving Medicaid patients through Optum have submitted formal complaints with the federal government. Providers have repeatedly reported long wait times for service authorization, and patient claims reimbursed in pennies on the dollar. Some Idaho service providers have even shut down since Optum took over, in-part because of how the company has done business.   

“Frankly, I think we may well have written a contract that was very difficult for any vendor to fulfill,” Rep. John Rusche, D-Lewiston, says.

Rusche, a retired doctor and health insurance executive, requested the Optum contract study after being flooded by complaints from providers and patients.

“They’re not responsible for inpatient [care] -- either community hospitalizations or our own state hospitals. They’re not responsible for pharmaceuticals. They’re not in any way responsible for the medical aspects of these patients with behavioral [issues],” he says. “As you manage the small set of services that are included in the Optum contract, it doesn’t really give you much to work with.”

Rusche says managed care contracts typically increase spending on early intervention and preventive medical care while decreasing the cost of hospitalizations and long-term medication use. But the Optum contract only includes outpatient services, things like therapy and community-based rehabilitation.

Rep. Rusche says studying the state’s contract with Optum could reveal ways Idaho can improve the relationship. He says lawmakers should also do what they can to improve communication among Optum, the state, and mental health care providers.

“Unless you can help them understand, and be involved in the care management activities, [they] view it as a denial of services or a denial of care,” Rusche says. “So, the system of how you interact, the benefits under the plan, the management protocols used by the care management team, and the services that are provided by the provider all really have to be flowing and working together and communicate with each other. And I think we’re going to see that wasn’t done as well as it should be.”

The Department of Health and Welfare’s division of behavioral health pays Optum about $10.5 million a month to manage mental health services for Medicaid patients. Optum is half-way through its three-year contract, which expires Sept. 2016.

Optum Idaho and officials with the state have said bumps in the road were to be expected as Idaho transitioned to the managed care service.

The Legislature’s Office of Performance Evaluations anticipates completing its study by Jan. 2016.

Find Emilie Ritter Saunders on Twitter @emiliersaunders

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