Lawsuit Accuses Molina of Failing to Provide Required Skilled Nursing Care

The insurer Molina Healthcare was accused of neglecting to provide a mandatory skilled nursing program in violation of its managed Medicaid contracts with the state of Illinois in a recently unsealed lawsuit.

The case, first reported by FierceHealthcare, alleges that the Long Beach, Calif.-based insurer failed to operate a so-called “SNFist” program, in which licensed clinicians check on plan members in skilled nursing facilities to prevent unnecessary rehospitalizations and improve outcomes.

Molina in 2014 entered a contract with General Medicine, a group of physicians and advanced nurse practitioners specializing in post-acute and long-term care, but ceased payments after four months, claiming General did not complete required exams. General Medicine ended the contract months later, after Cathy Harvey, the former president of Molina Healthcare of Illinois, ordered the financial department to halt payments until the contract could be renegotiated, the suit alleges.


The lawsuit was filed by Thomas Prose, the CEO and founder of General Medicine. A spokesperson for Molina told Skilled Nursing News that the insurer cannot comment on pending litigation.

Managed Medicaid plans contracted with the state are required to operate SNFist programs, the lawsuit argues, adding that Molina failed to implement a replacement for more than two years without notifying the Illinois Department of Healthcare and Family Services. Molina signed a new Medicaid managed care contract with Illinois in August of 2017; it started in January 2018 with options to renew annually for up to four years.

A memo sent by Molina in May 2015 indicated it had taken over face-to-face evaluations required under the SNFist program. Starting in June 2015, the insurer contracted with MedXM to conduct examinations by nurse practitioners.


Ben Schoen, former chief operating officer for Molina of Illinois, testified in an arbitration hearing that the insurer lacked the “ability or licensure” to provide a SNFist program, even though it planned to implement one. In April 2017, he testified that Molina had not instituted such a program after cutting ties with General Medicine, according to court filings cited in the lawsuit. He said while MedXM performed assessments for homebound patients, it did not perform them for patients in SNFs.

Audit reports to Illinois did not distinguish between home and SNF assessments, Schoen said in the lawsuit.

The lawsuit was unsealed on November 20 after the state of Illinois and the U.S. government declined to intervene in the case.

Written by Maggie Flynn

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