DHS, Providers At Odds On Claims

Although California’s most populous county has added some 200,000 people to the Medi-Cal rolls as part of a pre-reform expansion program that began 14 months ago, clinic and hospital officials say they have had trouble getting their claims paid by the Los Angeles County Department of Health Services or determining why they are rejected.

The situation involving the Healthy Way L.A. program has put the Venice Family Clinic – the nation’s largest free clinic and one of the linchpin’s of the safety net in West Los Angeles – on the brink of insolvency, according to its executive director.

“I may soon have to sell some of the clinic’s parcels in order to make payroll,” said Elizabeth B. Forer, the Venice Family Clinic’s executive director. She added that her organization is owed as much as $1.6 million in outstanding claims over the current and past fiscal years from Healthy Way L.A., which uses community clinics as medical homes for its enrollees. Forer’s organization has used much of its line of credit in order to maintain operations, she added.

Officials with the Department of Health Services, which administers Healthy Way L.A., categorically denied a problem processing claims for treatment of the program’s enrollees exists. However, officials for the region’s primary community clinic and hospital lobby say otherwise.

Louise McCarthy, executive director of the Community Clinic Association of Los Angeles County, noted that DHS has made some progress in cleaning up its claims adjudication, but that it has not been enough. “I give them credit for trying, but unfortunately a lot of their systems are not as nimble as they need to be,” she said. “The claims are just not going through.”

Under Healthy Way, clinics typically fill out the electronic application for enrollment at the time a patient who qualifies for the program is treated. “There’d be delays in enrollment verification, and you would not get paid, and you’d be in enrollment limbo,” McCarthy said.

Both Forer and McCarthy also say that when claims are rejected, they receive little explanation as to why, forcing clinic staff to often try and guess the reasons before resubmitting claims. 

Hospitals have had similar problems, according to Jim Lott, executive vice president of the Hospital Association of Southern California. “They have had bad experiences getting paid for the Healthy Way L.A. patients,” he said, adding that there have also been issues involving verification of a patient’s enrollment in the program.

Lott noted though that hospitals, unlike clinics, have other revenue streams. “The clinics need that money for their operations,” he said.

County officials say they send clinics a list of claims that are rejected every two weeks, and that it pays $94 for initial claims submitted for a new applicant until enrollment is verified. McCarthy and Forer contend the lists contain mostly numerical codes and are extremely difficult to reconcile with clinic records.

Payment problems appear to have been particularly acute with Venice Family Clinic. Although Northeast Valley Health Corp. in the San Fernando Valley reported similar problems, a spokesperson there said they have moderated in recent months. “The payments have been slow at times, but it has gotten a whole lot better,” said Helen Arriola, that clinic’s director of external affairs. More of a problem, according to Arriola, have been cuts and holdbacks to Medi-Cal payments. It’s a situation officials agree has been amplifying the need for timely Healthy Way L.A. payments.

Amy Luftig Viste, the DHS’ director of community partner programs, said that her department pays every single legitimate Healthy Way L.A. claim within four to six weeks of submission. However, up to 60% of claims are being submitted without proper program applications, she added, leading to delays. Another issue has been the improper coding of claims, or resubmissions of claims that have already been paid.

“Claiming is not easy, and it is harder for the clinics because there is a lot of staff turnover, leading to more incorrect billing,” Luftig Viste said.