Auditor: Bayou Health report flawed

The Jindal administration’s positive report to the Legislature on the status of Medicaid privatization lacks information supporting “global assertions” of cost savings and improved health outcomes, the legislative auditor said in a report issued Monday.

Legislative Auditor Daryl Purpera said the report, covering July 2012 through June 2013, is largely based on data provided by the insurance companies participating in Bayou Health without independent verification by state officials.

In addition, comparisons between traditional Medicaid — the government insurance program for the poor — and the new privatization do not use apples-to-apples data, the auditor said.

“This lack of comparability renders most comparisons of Bayou Health data to legacy Medicaid data skewed and not useful,” according to the auditor’s report.

The audit was conducted to evaluate the reliability and consistency of the information the state health agency reported to the Legislature in January. The report has been dubbed the Bayou Health Transparency Report. State law requires the legislative reporting, which was initially opposed by the administration.

State health chief Kathy Kliebert said the report includes information addressing all 24 category and data requirements the Legislature wanted.

“While we certainly believe in improving the Transparency Report for future years, we believe that it shows the reality of the program, which is that it is working to provide better care for those who need health care most around our state,” Kliebert responded in a written statement Monday.

Medicaid director Ruth Kennedy said the health agency has entered into a contract with the CPA firm of Myers and Stauffer to independently verify the completeness and accuracy of data provided by the private insurers.

In an email to Purpera’s office, Kennedy said the agency should have included more disclaimers of data and characterized the data as “marginally legitimate.”

The Legislative Auditor’s review comes as the current three-year contracts are coming to an end and the state is soliciting proposals for new contractors.

The Bayou Health managed care program started being phased in in February 2012. As of June, 896,262 people — mainly pregnant women and children — were enrolled in one of Bayou Health’s five privately operated health plans.

The two most popular plans follow a “shared savings” model, in which companies are paid a management fee to handle payments to physicians, hospitals and other providers on a fee-for-service basis. United Healthcare and Community Health Solutions have more than half the enrollees. Their incentive to keep costs down is that the plans get a percentage of verified savings.

The three other plans are based on a straight insurance model, in which the state pays companies a “capitated” monthly premium for members’ coverage.

Capitation is a payment arrangement in which health care service providers are paid a set amount for each enrolled person assigned to them over a set period of time. Those contractors are Amerigroup Real Solutions, AmeriHealth Caritas Louisiana and Louisiana Healthcare Connections.

The state has opted to go with a pure insurance model as it seeks new contractors.

Follow Marsha Shuler on Twitter, @MarshaShulerCNB. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog.