Texas Attorney General to Investigate Payment Practices of MCOs

Texas Attorney General John Cornyn (R) launched an investigation Sept. 28 into the "payment practices of the state's largest" managed care organizations after receiving a "flood of complaints" from providers about late reimbursements and "improper payment schemes," the Houston Chronicle reports. "These payment problems may affect patients' access to doctors of their choice and, ultimately, affect patient care," Cornyn said (Hughes, Houston Chronicle, 9/27). Roughly 30 providers have complained to Cornyn's office about MCO payment procedures, including allegedly denying payments for pre-authorized hospital stays, "grouping separate service together for one" and providing lower reimbursements than the "rate ... agreed upon in contracts." Some of the providers said that payment disputes had "forced" them to stop accepting patients covered by certain health plans. Jane Shepperd, a spokeperson for the state attorney general's office, said that Cornyn has asked nine MCOs to "submit documents" to ascertain how "widespread" payment problems may be (AP/Dallas Morning News, 9/28). Cornyn said that health plans found to have broken state law could face up to a $10,000 fine per violation (Houston Chronicle, 9/27). Shepperd, however, said that the office would not release the names of the companies since the investigation ultimately may not find wrongdoing (AP/Dallas Morning News, 9/28).

Already Under Scrutiny
The Texas Association of Health Plans criticized the investigation, saying that it "duplicat[ed] efforts" already in place at the state Department of Insurance to work on payment issues. The agency earlier this month "adopted prompt payment rules" for health plans. In a statement, the association said: "This investigation further appears to ignore any abuses and problems on the claims side, including physician, hospital and other provider claims fraud ... which are said to account for tens of billions of dollars nationally each year -- dollars that are ultimately paid by consumers" (Houston Chronicle, 9/27). Association spokesperson Leah Rummel said that complying with Cornyn's request for document could cost each MCO "hundreds of thousands of dollars." According to the insurance department, Texas health plans have lost $1.5 billion since 1996 (AP/Dallas Morning News, 9/28).