Watch CBSN Live

Texas Rescinds Contract With Evercare Medicaid Service

Evercare, a unit of UnitedHealth Group, is losing its contract to provide coordinated care services to more than 74,000 elderly and disabled Medicaid patients in North Texas. The Texas Health and Human Services Commission terminated the contract, effective May 31, after many patients complained that they were having trouble accessing medical services through Evercare. Patients who are in the Evercare program will return to traditional Medicaid or a local Medicaid HMO.

Evercare, which operates in seven states, employs nurse case managers who are supposed to coordinate preventive and chronic care for patients and guide them through the health care system. (Evercare also runs Medicare Advantage plans and has a palliative care and hospice division.) The company, which has received some national awards, claims that its efforts reduce hospital admissions by 40 percent. Since February 2008, Texas has been paying Evercare $1.8 million a month, expecting that improved care management would save $110 million over two years by reducing ER visits and hospitalizations. What happened instead is that the Health and Human Services Commission received complaints from hundreds of patients who said they were unable to get the services they had been promised. For starters, many doctors on Evercare's provider list told patients that they were not part of its network. Some patients had to wait months for dental work or for someone to coordinate their care. Over the past year, Texas has fined Evercare over $1 million for various deficiencies, including its failure to ensure that care was provided in a timely manner.

The Dallas Morning News quotes Beth Mandell, regional executive director for Evercare of Texas, as saying that, in North Texas, the integrated care model "proved complex, often making it challenging to provide timely service to members."

What seems to be missing in the news accounts is the difficulty of getting physicians to accept Medicaid patients. Especially in Texas, where doctors receive above-average reimbursement from private insurers, both Medicaid and Medicare pay poorly by comparison. This is a problem that is going to get worse as states grapple with the economic crisis and their growing budget gaps.

That doesn't let Evercare/United off the hook. It's hard to understand how a health plan or a care management company could enroll people--let alone vulnerable, ill seniors--without having an adequate network in place first. We can only hope that this scenario won't be replayed, with Evercare and similar firms, in other areas across the country.

BTW, readers who are interested in healthcare reform should take a look at the excellent Health Wonk Review roundup by David Harlow at HealthBlawg.

View CBS News In