‘Chaos’ erupts as Univita loses contracts

Friday, July 31, 2015

MIRAMAR, Fla. – Less than a year after it took over the Florida Medicaid market, Univita Health has lost all of its contracts.

HME providers place much of the blame on Medicaid officials.

“We knew, from day 1, that this was going to happen,” said Fino Randazzo, owner of Florida Home Health in Orlando. “When you have one company trying to service 2 million people, it’s not sustainable. Why would (the state) allow this?”

Univita gained control of much of the Florida Medicaid market in 2014, when the Agency for Health Care Administration transitioned beneficiaries into managed care. Of the 14 managed care organizations running the program, 10 contracted with Univita to administer DME. Less than a year later, however, AHCA announced Univita was no longer processing prior authorizations and told providers to contact MCOs directly.The state forged head, despite concerns from providers that the move would create a monopoly and would create a conflict of interest.

“We would try to get a prior authorization from them and wouldn’t hear back,” said Ivonne Gonzalez, president and CEO of Health Medical Equipment in Miami. “Three days later, they’d tell us, ‘Oh, the patient already has a nebulizer.’”

Univita wasn’t breaking the law, says Lynn Everard, a former employee, but the arrangement allowed for questionable business decisions.

“They should have had to decide, are they a network company or are they a provider,” said Everard, managing director of Valumatrix.

Michael Muchnicki, appointed CEO in 2014, has previous experience at Cigna and UnitedHealthcare.

While AHCA hasn’t said why it terminated the contracts, providers say they’ve since learned what Medicaid was paying Univita.

“No wonder they went broke,” said Ron Jenkins, CEO of Longwood, Fla.-based Respitec Medical. “They couldn’t survive on what Medicaid was paying.”

In its announcement July 28, AHCA said that Univita was no longer processing prior authorizations and directed providers to contact one of the other health plans.

In an email to HME News, AHCA stated: “Providers must continue providing services to enrollees during the transition period for any services that were previously authorized or prescheduled, regardless of whether the provider is participating in the plan’s network.”

Until AHCA puts a “workable” plan in place, it’s “chaos on the ground,” says attorney Dan Leyton, a partner with Kravitz, Talamo & Leyton in Hialeah.

“I really don’t know how things are going to operate over the next few weeks as this all shakes out,” he said. “I have yet to hear that anybody has a well-thought out plan for how things are going to work in the future.”

Univita is rumored to be planning to file for bankruptcy but hadn’t at press time, and is said to have laid off most of its approximately 1,100 employees in Florida.

The private-equity backed Univita formed in 2008 and entered the HME market in 2010, when it acquired Davie-based Atenda Healthcare Solutions. By 2012, the company had 5 million patients across several states, including Tennessee, California, Minnesota, Indiana, Wisconsin and Massachusetts.

An attempt to reach Univita was unsuccessful.



I read with much interest the Univita article.  This comes as no surprise and has been rumored for some time.  This should also be a lesson for Medicare, although I'm sure it won't be.  You can cut reimbursement only so far before the business becomes unsustainable.  The Competitive Bidding program has been a travesty with non-binding "suicide" bids, lack of proper licensure, and ridiculously reduced reimbursement rates.  Vendors are scared to not participate and will do so at any cost, with a large number of them having lost their business due to this.  Why Congress has turned a blind eye to this attack on American entrepreneurialism is confounding, not to mention the decrease in beneficiary care which has become more and more obvious.  Does CMS care about this; evidently not.  Then, to add insult to injury, CMS allows vast, widespread and insidious audits that further affects a DME company's cash flow.  It's a tough business these days for the many DME companies that have spent years building their business and patient relations, only to see it all crumble due to unreasonable reimbursement rates and debilitating audits.  The Florida/Univita debacle should alert CMS to a pending widespread problem should their current attacks on DME companies continue.  I, for one, am not holding my breath that it will.


David Paul