Private firm with Missouri Medicaid contracts gets state help

JEFFERSON CITY, Mo. -- An Indiana company under fire for its handling of Missouri Medicaid patients is receiving help from the state in the form of a cadre of taxpayer-paid temporary workers and state employees, even as it faces the possibility of losing its lucrative state contract, lawmakers were told Wednesday.

Two officials with the state Department of Health and Senior Services told a House committee that the agency hired 13 temporary workers and shifted as many as 20 state workers from their regular jobs as the withering consumer complaints against SynCare LLC pile up.

The Indianapolis-based company won a contract in February worth as much as $5.5 million a year to determine whether thousands of Missouri Medicaid recipients qualify for home-based medical services or help with daily chores. The company has received $1.3 million since the contract took effect in mid-May, quickly followed by a litany of concerns, from inordinately long telephone wait times to sharp reductions in the number of hours of allowable care. Others have described being ignored entirely.

SynCare CEO Stephane DeKemper acknowledged that the company has fallen short of its standards, but said the state also shares some responsibility because it grossly underestimated the amount of work the company would be doing.

Summoned by legislators to address the complaints -- and justify the decision to award the contract in the first place -- deputy state health director Peter Lyskowski and a colleague said their agency is considering scrapping the deal with SynCare but doesn't want to further jeopardize the delivery of in-home services.

"We're not satisfied with the performance that SynCare has exhibited on a number of fronts," he told the Interim House Committee on Budget Transparency. "But it would be irresponsible of us to just point the finger at SynCare and leave a vacuum for the delivery of services that are needed. ... It's our responsibility to make sure the job gets done, with or without SynCare."

To that end, the health department hired the temporary workers and reassigned some state workers Aug. 18 -- days after SynCare reportedly fired dozens of employees at its newly opened Missouri office in suburban St. Louis. The company is contractually committed to having 130 workers in the state, and announced plans to hire even more. But its latest employee roster listed 13 fewer workers than the state minimum, Lyskowski testified.

"I've never heard of that before," said Rep. John Cauthorn, R-Mexico. "If I'm a contractor going to build a road, I don't know that we send out the highway department or (the Missouri Department of Transportation) to help them. Either they do their job, or they're not."

Rep. Dave Schatz, R-Sullivan, was even more blunt.

"The department has failed here miserably," he said.

Committee members were also told that while SynCare is collecting just half of its maximum fees because of the service struggles, the agency has yet to invoke a $5,000 monthly penalty the company faces for not meeting certain obligations.

DeKemper said in a telephone interview that the state had told the company it could be expected to process 4,400 cases a month, but that it instead has been inundated with more than 1,000 calls daily, including from clients whose service needs haven't been updated in as long as five years as well as from potentially new clients. The state's estimate of 20 needed employees for its telephone call center was also off the mark, she said.

"There are problems on both sides," she said. "My company has been portrayed in the wrong light. ...Was the state prepared to launch this as well? I don't think they were fully prepared."

Missouri lawmakers approved the move to third-party Medicaid eligibility screenings in 2010, alarmed by skyrocketing costs in the federal-state health insurance program for the poor and disabled.

The state, which had previously allowed client assessments by the same organizations that ultimately provided home-care services, saw the number of people receiving home services increase by 15 percent, while annual costs grew by one-third. Lawmakers saw the third-party solution as not only a money-saving alternative but also an approach that would eliminate potential conflicts of interest.

A consultant estimated Missouri could save $3.4 million annually by using an outside group to determine eligibility, which involves verifying patients' income and health conditions.

Committee chairman Ryan Silvey, a Kansas City Republican, noted that officials with the Office of Administration, which oversees state contracts, flagged SynCare's bid for its apparent "lack of understanding about the process."

The company had no prior experience with Medicaid eligibility screenings, dealing primarily with prenatal and diabetic patients in Indiana. But neither did any of the other 10 bidders, an Office of Administration representative said.

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Alan Scher Zagier can be reached at http://twitter.com/azagier