In the wake of Indiana’s transition to managed care for Medicaid services on July 1st, nursing home operators across the state are grappling with significant financial uncertainties due to delayed reimbursements, leaving many small facilities struggling to make payroll for their employees.

Jeff Huffman, chief operations officer of The Strategies, a family-owned long-term care organization which oversees five nursing home and rehabilitation facilities and employs about 300 staff, expressed deep concerns over the payment delays. 

Huffman told Skilled Nursing News that facilities operated by The Strategies have been denied payments for over 80% of services rendered by clinicians. And while his organization has managed to keep up with paying employees for the last couple of weeks, there is a question mark as to how long they can continue. 

Small operators in particular heavily rely on Medicaid reimbursements to keep bills paid and to keep operating, said Huffman. Timely payments are crucial for maintaining operations.

State law allows providers to seek emergency relief during the initial 210 days of the transition period if claims denials exceed 15%, or if payments are delayed beyond 21 days for claims totaling $25,000 or more. While these provisions offer a potential lifeline, Huffman criticized the temporary emergency financial assistance program for reimbursing only a fraction of the average claims, likening it to giving insurers a discount on owed payments.

“If they don’t pay by day 30, the emergency clause that kicks in makes them have to pay us 75%,” he said. “It sounds like a 25% profit margin for big insurance.”

In the other states where managed Medicaid has been rolled out as well, the program is applicable to only 25% of operators, Huffman said, whereas all operators in Indiana are subject to it.

“Indiana had probably the most efficient Medicaid reimbursement system in the country for the last 15 years, and for whatever reason, for the last three years, they’ve been pushing this managed Medicaid, basically taking Indiana Medicaid taxpayer money and giving it over to [managed care providers],” he said.

Anthem Blue Cross and Blue Shield, Humana Healthy Horizons in Indiana and United Healthcare Community Plan are some of the insurance companies that partner on the managed Medicaid in Indiana.

Paul Peaper, president of the Indiana Health Care Association, told the Indiana Capital Chronicle that several facilities have encountered challenges with the new managed care system’s claims portals.

“We’ve got three different managed care entities all with their own claims portals. As you’re submitting your claims into each of their claims portals, it looks different and reports out different information at different times,” Peaper explained.