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Deadline passes for Sunshine State Health Plan to challenge $9.1 million Medicaid fine

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An excerpt of a disciplinary letter sent March 17 to Nathan Landsbaum, chief executive of Sunshine State Health Plan of Tampa, by Brian Meyer, AHCA assistant deputy secretary. AHCA fined the company nearly $9.1 million for failure over nearly three months to pay tens of thousands of claims for the state's sickest and neediest children.

Florida's largest Medicaid vendor had until Thursday to dispute the penalty imposed last month by the state Agency for Health Care Administration, leaving the company with one option: pay the fine.

The deadline set by Florida lapsed for its largest Medicaid payment vendor to challenge a nearly $9.1 million fine over the company’s failure for nearly three months to pay tens of thousands of health care claims for the state’s sickest and neediest children.

Sunshine State Health Plan Inc. of Tampa had until 5 p.m. Thursday to dispute the large fine imposed last month by its government regulator, the Agency for Health Care Administration, leaving the company with only the option to concede to pay. “Sunshine waives any dispute not raised within 21 days,” the government had warned the company March 17.

An agency spokesperson confirmed Friday that Sunshine State did not file any administrative challenge before the deadline. It must pay the fine – which amounted to $75 for each failure to pay a claim – by April 18.

Florida acknowledged that the company’s failures - blamed on technology glitches over nearly three months - were “non-willful.”

The payment problems left families in Florida with critically ill children who relied on Medicaid-paid health providers stranded. They affected children receiving care under the company’s Sunshine Health Medicaid program and the Children’s Medical Services Health Plan it operates on behalf of the Florida Department of Health for patients under 21 who are eligible for Medicaid and who have serious, chronic conditions.

Some smaller health providers temporarily shut down because they could no longer afford to pay nurses, therapists or other specialists without timely reimbursement under Medicaid from Sunshine State. Other companies were forced temporarily to cover the costs, effectively floating loans to the health-care giant until they were paid.

Some providers said they were still experiencing billing issues with Sunshine State.

Florida said the problems affected 121,227 health claims, far higher than Sunshine State had previously acknowledged. The company had said the problems affected one-half of 1% of its 9.2 million total payment claims it processed during the period, or about 46,000 claims.

Sunshine State previously said the glitches stemmed from the company’s merger on Oct. 1 with the second-largest payment vendor, WellCare of Florida Inc. Combined, Sunshine and Wellcare have multiyear contracts worth $31.6 billion from AHCA, according to figures from the state’s chief financial officer.

In its sanctions announcement, the Florida agency demanded detailed explanations for how the problems occurred and how the company responded. It also required the company to demonstrate within 30 days that future claims were being paid promptly and asked for weekly updates in phone calls with the CEO, Nathan Landsbaum, or another senior executive.

In a statement this week, the company declined to say whether it intended to pay the $9,092,025 fine. It pointed to its earlier public comments on the matter that included an apology to health care providers and a promise to quickly address any outstanding issues.

“We know that we created a number of challenges for our partners that did not meet the standards we set for ourselves or our contractual obligation to the state of Florida,” the company’s statement said.

Investors seemed unconcerned about the fine: The stock price of its parent company, Centene Corp., closed Thursday close to its price the day Florida announced its sanctions on March 17. Centene did not mention Florida’s sanctions, including its decision not to contest the fine, in securities filings.

Also Thursday, Centene’s former CEO for more than 25 years, Michael Neidorff, died at age 79. The company appointed its vice chairman, Sarah London, as its new CEO on March 22.

This story was produced by Fresh Take Florida, a news service of the University of Florida College of Journalism and Communications. The reporter can be reached at kristin.bausch@freshtakeflorida.com. You can donate to support our students here.

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Health News Florida Sunshine State Health PlanWellCare Health PlansMedicaid