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Insurance issues complicate new Pa. health official's job

Ted Dallas knew he was walking into a crisis the late-January day he accepted the job as Pennsylvania's acting secretary of the Department of Human Services.

Ted Dallas knew he was walking into a crisis the late-January day he accepted the job as Pennsylvania's acting secretary of the Department of Human Services.

He knew that, since early December, thousands of Pennsylvanians with alcohol and drug addictions had been locked out of treatment centers. And he understood the seriousness of their situation.

"For folks in the drug and alcohol world, that continuity of care and the wraparound services and keeping it consistent is particularly important," Dallas said. "It was a thing we had to address quickly."

To fix the problem, the new secretary first had to find out how many people had been shut out of treatment and where they were. Then he had to get them moved to the right insurance coverage. He got to work, drafting people from across DHS, a sprawling agency formerly known as the Department of Public Welfare.

It took weeks. DHS employees reviewed lists of people who were thought to be in the wrong insurance program. In the end, they were able to identify and move 8,500 people into the right insurance plan.

Yet the change is only temporary, the result of transition between administrations.

Problems had first surfaced in early December, as the state prepared to launch "Healthy Pennsylvania," former Gov. Tom Corbett's Medicaid expansion alternative. Although best known for its "private option" - using federal Medicaid dollars to buy private health insurance for the newly eligible low-income population - Healthy PA also included "high-risk" and "low-risk" plans for the generally poorer residents who already were receiving traditional Medicaid, including those being treated for drug addiction.

A glitch somewhere in the system mistakenly moved people with substance-abuse problems to private insurance instead of Healthy Plus, the new program for the high-risk medically frail.

But the private plans were not intended to cover that population, and most had not set up networks to cover addiction and mental-health treatment. The result was an immediate end to treatment for thousands of Pennsylvanians. For some, the bureaucratic blunder was truly a matter of life and death.

"Our clients go to emergency rooms or they overdose," said Michael Harle, president and CEO of Gaudenzia, the drug and alcohol treatment provider. "They are more likely to get arrested. Or die."

Pennsylvania recorded more than 2,400 drug-overdose fatalities in 2013, ranking it among the worst 10 states. About 162,000 residents a year are treated for substance-abuse disorders in a variety of settings.

By the time drug and alcohol programs across the state noticed there was a problem, admissions had fallen off dramatically.

At Gaudenzia, which has 900 residential treatment beds in Southeastern Pennsylvania, admissions dropped by 20 percent in December. Gaudenzia's numbers increased by about 3 percent in February, Harle said, but "getting it rolling again is tough."

Still, he said, the agency "jumped right on the problem and is getting it fixed."

Now, DHS must make sure providers that continued treating people through the mix-up are reimbursed, he said.

When programs realized what was happening in December, they had a choice. They could stop treating patients who didn't have Medicaid coverage or continue helping their clients. Many, including Gaudenzia, continued treating those who showed up.

"We have a significant reduction to our income, and we can't afford that," Harle said, citing a $1.5 million drop since December. The state "is going to have to fill the gap."

In an interview last week, Dallas acknowledged some providers were "having cash-flow problems and other financial issues" and said the state was working to resolve them "on a case-by-case basis."

But all this is simply to get things right with Healthy PA, the Corbett initiative that took effect Jan. 1. Gov. Wolf plans to scrap that alternative program for the same Medicaid expansion that New Jersey and more than 20 other states adopted more than a year ago.

In that program, all recipients are in the same pot - no "private option," no high- or low-risk Medicaid plans.

Dallas said he expected to finish the first part of the phase-in - involving participants in substance-abuse treatment - by April 30, with the entire Medicaid expansion in force by the end of September.

For now, he is focused on getting those who were shut out into the right plan, and on ensuring treatment for new people in the system.

"There are folks that could wind up getting caught up in the gears of this right now, and we're doing our best to keep on top of those," Dallas said.

Another goal, left unsaid: State Senate confirmation of his job as secretary.


This article was written in partnership with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.