Florida suspends Centene's Medicaid enrollment, fines insurer over tech error
Nona Tepper / March 25, 2022
Florida's healthcare agency has immediately suspended Medicaid and long-term care enrollment in a Centene subsidiary and fined the insurer nearly $9.1 million, after a computer glitch led Sunshine State Health Plan to mistakenly deny medical claims for more than 121,100 lower-income adults and children.
The $125.9 billion insurer must pay the fine within 30 days, according to a state Agency for Health Care Administration letter sent to Sunshine State Health Plan's CEO on Wednesday. Centene's Florida arm must also submit a plan for how it aims to reprocess all provider and patient claims within 21 days, demonstrate within 30 days that future claims are paid promptly and participate in weekly phone calls with the agency's senior executives about how the process is going.
The state will begin to re-enroll individuals in Centene's Medicaid and long-term care plans after it has met all the requirements. The insurer has 21 days to appeal the fine and enrollment freeze.
"While the claims payment issues has since been resolved, we know that we created a number of challenges for our partners that did not meet the standards we set for ourselves or our contractual obligation to the state of Florida," a Sunshine Health spokesperson wrote in an email.
The insurer has updated its provider escalation system, doubled its check-processing capacity and enhanced its clinician communication and training programs, the spokesperson wrote. Sunshine Health did not immediately respond to whether it planned to appeal the state fine and enrollment freeze.
The insurer claims to be one of the largest Medicaid managed-care plans in Florida and reportedly holds a multi-year contract with the agency for $31.6 billion. The letter noted that Sunshine acknowledged "internal system errors" caused incorrect claims denials.
Centene had attributed payment problems to glitches with its integration of WellCare, which the insurer purchased for $17.3 billion in 2020. Other Centene subsidiaries recently ran into similar trouble with state regulators.
In January, the insurer's recently acquired Magellan subsidiary took over management of California's Medicaid prescription drug program. Worker shortages frustrated thousands of patients waiting for prior authorization approvals, some of whom were on hold with the company's call centers for eight hours at a time. California's healthcare agency said it withheld $3.8 million--or 64%--of Magellan's January contract as a penalty.
Centene is still planning to submit a bid to run Medi-Cal, state's Medicaid program. As of March 10, California regulators had received 47 complaints from providers about Centene and its subsidiaries this year. The California Department of Managed Health Care fielded 279 complaints about the insurer in 2021.
Former CEO Michael Neidorff said the company was experiencing worker shortages during the company's third-quarter earnings call in September. In response, the insurer is in the process of automating its call centers. The company has called out implementing artificial intelligence for this and other aspects of its business as part of its value creation plan, championed by activist investor Politan Capital Management.
"Relative to staffing, yes, we're feeling pressure," Neidorff told investors. "We have solutions we think will work for us and that we're making work."