In a letter several weeks ago, the man who manages health care benefits for state employees and their families listed a number of ways that a major Oregon-based health insurance company is failing them.
Ali Hassoun, director of the Oregon Public Employees Benefits Commission, wrote in a Feb. 26 letter to Providence Health Plan that employee groups “have identified numerous systemic issues related to this situation that need to be addressed and resolved.” WW Obtained through public records request.
Hassoun’s letter comes after Providence, which has long run a health benefits system for tens of thousands of state workers and their families, just outsourced its operations to technology company Collective Health. After the January 1st announcement, things quickly descended into chaos, disrupting health care for many people and causing significant bureaucratic headaches and stress for many patients and health care providers.
According to the Oregon Health Authority, approximately 87,000 people in PEBB alone participate in the “Providence Health Care Plan with Population Health.” But this was not the only cohort affected. Many Portland Public Schools employees are participating in this plan. The same goes for Intel. The list goes on. But the size of the state employee benefits group and the public process reveal what went wrong.
Mr. Hasson’s letter is essentially a notice that Providence Health Plan is not in compliance with the agreement governing PEBB members’ health benefits. The details are consistent with previous reports on the issue, including members not receiving cards, providers leaving the network entirely, in-network providers being treated as out-of-network, and care being delayed. However, there are also new ways to identify problems that occur in the backend.
According to some, these problems were quite predictable. Two former Providence Health Plan staffers who spoke on condition of anonymity said they and colleagues warned them that Collective Health’s subcontracting arrangements were rushed and would cause problems. “It was obvious this was going to be interesting, to say the least,” says one. WW reviewed an email sent by a former staffer to Providence Health Plan’s chief compliance and risk officer well before its Jan. 1 launch, expressing concerns that Collective Health was not up to its mission.
Against this backdrop, Mr. Hassoun’s letter, which summarizes the issues nearly two months after a difficult launch, supports allegations that Providence Health Plan and its contractors failed to adequately prepare for the transition of their own accord.
For example, one of the early red flags was that Collective Health’s systems didn’t integrate well with existing systems.
Hassoun said that once Collective Health took over, health plan members could no longer see prior approvals that had been approved before the new year, when Providence itself implemented the plan.
The letter added that plan members “will no longer have access to past medical plan and medical record information, which may violate HIPAA, the federal law governing the flow of medical information.”
Additionally, under the new system, Providence Health Plan stopped uploading information to PEBB’s data warehouse vendor, Hasson claimed.
This is all a shaky story within baseball, but that’s exactly the point. That’s the way it should be. Rather, these and other problems suddenly appeared on the user side of the system, and in many cases, according to Hasson, actively undermined healthcare.
“Many providers required members to pay for services upfront or denied member services because they were unable to verify eligibility,” he wrote. Amid this situation, health care providers are withdrawing from networks, which is another factor that makes it difficult to receive care, he added.
“When PEBB members and PHP network providers called CH, the hold times were long, sometimes up to three hours,” Hassoun added, using the acronyms of the various players.
In the healthcare industry, vendor moves can be complicated and sloppy turmoil is unfortunate, but not unusual. Still, Karen Handoff of Georgetown University’s Center on Health Care Reform points out that Providence Health Plan maintained all records in transit, which could have helped.
“Pre-approval approvals and employee records are very important things to have access to,” says Handoff. “It seems to me that they should have made some effort to make sure it went smoothly.”
“You have an obligation to determine not just how much it costs, but whether it’s worth it to use the vendor, and whether the vendor is capable of doing the job you need them to do. So the question is, ‘Did they do that? And how did they do it?'”
Neither Providence nor Collective Health responded to specific questions for this article, but both said the transition had been more difficult than expected and that they are working hard to improve the quality of their services and are making progress.
Hassoun’s letter requested a series of reports tied to various metrics, including claims processing time. He wrote that PEBB expects Providence to resolve the system issues by Monday, March 30 at the latest.
Monday, a Providence Health Plan spokesperson said. WW: “We will respond directly to PEBB on this notice this afternoon. Please review the information included once it is published.”
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