Originally created 05/29/03

Budget doubts hinder rescue



With the state budget up in the air and Medicaid payments caught in a snarled computer system, plans are on hold to save the outpatient pharmacy at Medical College of Georgia Hospital and Clinics.

In the meantime, officials are crafting plans to retain services based on the level of Medicaid money restored, said Don Snell, the chief executive officer of MCG Health Inc. In either case, the service will likely be turned over to a commercial pharmacy.

In a meeting of its executive committee Wednesday, board members that oversee MCG Health were told that the hospital system has not received a payment from Medicaid for two weeks.

The problems began when Affiliated Computer Services took over April 1 as the intermediary for electronic Medicaid payments. The company found it could not process claims and after a while began sending Medicaid providers a percentage of their previous payments to tide them over, said Tom Kelly, the chief financial officer for MCG Health.

Instead of its $6 million to $7 million average per month, MCG Health received $4.4 million for April and only $2 million in May, Mr. Kelly said.

If it's just a backlog and Medicaid eventually pays the submitted claims, "then it is just cash flow," Mr. Snell said. If it turns out the state is denying those claims or deciding not to pay because of budget problems, "then it becomes a real revenue issue," he said.

"And that could impact support for the college," which receives 40 percent of the operating company's final margin, he said.

The computer company is working through its problems, said Andy Boisseau, a spokesman for the Georgia Department of Community Health, which oversees the Medicaid program.

"The number of claims that are being paid is increasing," he said.

Mr. Boisseau said the attorney general's office is looking at how much of a penalty the computer company should pay for delaying payments.

Also up in the air is Medicaid relief from a recently passed federal tax cut and stimulus package. Gov. Sonny Perdue's office said the state is slated to get more than $518 million, including $239 million for Medicaid. But it is not clear how it will be applied, Mr. Boisseau said.

MCG health officials are also hesitant because Mr. Perdue has not signed the state budget, although it can become law without his signature 40 days after passage, which will be June 4.

"It is certainly something he's reviewing," Perdue spokeswoman Kim King said of the budget.

With no definitive news, hospital officials are pulling together a number of scenarios based on any additional Medicaid money. If there is none, the hospital will stick with the original plan of essentially closing the pharmacy, switching cancer and transplant patients to another hospital pharmacy and helping patients qualify for drug manufacturer discount programs, Mr. Snell said.

Regardless of the new money, other changes will be made, he said.

"There will clearly be increased co-pays based on the ability to pay," he said.

There will likely be geographic limits and a new commercial pharmacy provider, he said, although that provider could set up a statewide distribution service based in its retail stores. The new provider will be chosen later, he said.

Reach Tom Corwin at (706) 823-3213 or tomc@augustachronicle.com.