Providers push back against cuts by MCOs 

COLUMBIA, S.C. – HME providers are fighting large managed care organizations that are increasingly pushing into more states and offering reduced reimbursement rates, say industry stakeholders. 

The straw that’s breaking the camel’s back: The COVID-19 pandemic pushing the cost of doing business even higher, says Craig Douglas, vice president of payer and member relations for VGM. 

“Acquisition costs are going up; surcharges are being levied,” he said. “The timing of these contracts is bad because the market is in so much turmoil right now. To agree to something as long term as these contracts, when all these costs are fluctuating – it's hard to know what you can and can’t do if you agree to something today.” 

HME providers in South Carolina are the latest to face steep cuts to Medicaid and Medicare fee schedules, with Centene moving in to manage many of those beneficiaries. 

Providers in the state have reported average reductions of 65% for Medicare, Medicaid and health insurance exchange plans, says Laura Williard, vice president of payer relations for AAHomecare. 

“There’s a lot of new contracts being sent out and providers are just receiving emails with updated rates,” she said. “They seem to be looking at overall payment structures and reducing rates.” 

AAHomecare has been putting together a game plan to try and roll back the cuts in South Carolina, including meeting with leadership at Absolute Total Care, the state’s Medicaid MCO, which the industry has traditionally had a good relationship before Centene moved in, says Williard. 

“It was concerning to them, as well,” she said. “I anticipate they will come back and say this is something they have to do.” 

But the issue is bigger than South Carolina, stakeholders know. With its merger with WellCare Health Plans finalized in January 2020, Centene now provides health care to more than 25 million members in all 50 states. 

“As you get these companies that operate in multiple states like Centene, especially if they are just entering the market, they look at the Medicaid fee schedule and say, ‘Provides are accepting lower rates everywhere else, why are we paying so much here,’” Douglas said.