Medicaid Patients and Doctors Are Seeking a Cure for Denver Health's Managed Care

Hollie Presley sits at the kitchen table in her tidy southwest Denver home, surrounded by paperwork. Her four-year-old, Isabella, watches a cartoon in the living room, while her infant son, Parker, reclines in a bouncy chair within arm's reach, his belly full from his last bottle. The paperwork chronicles Presley's ongoing struggles with Colorado's Medicaid system. Presley wants her children to be able to go to the same doctors at South Federal Family Practice who delivered them and who know them. But because the family lives in Denver, getting both of her kids on a Medicaid plan that allows for that has been tough.

That's because since 2006, any Medicaid recipient with a Denver address has been automatically enrolled in the Denver Health Medicaid Choice plan. This so-called passive enrollment happens even if the patient has been seeing another doctor for years and lives nowhere near a clinic operated by Denver Health. And it happens despite the fact that Denver Health has a waiting list that's thousands of patients long (though it's taken significant steps to reduce it over the past year).

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Several things can trigger the passive enrollment, including if a Denver patient doesn't expressly opt out of the Denver Health plan when his or her Medicaid benefit comes up for annual renewal. It can also occur when a patient moves to a new Denver address or when a Medicaid baby is born in Denver, which is what happened most recently to the Presleys.

The family first started going to South Federal Family Practice in 2009, soon after Presley became pregnant with Isabella. At the time, they were living in Wheat Ridge. Her husband had recently lost his job, and Presley's income as a hairdresser wasn't enough to pay for health insurance. So she got on Medicaid, the government insurance program that covers low-income families and people with disabilities. South Federal Family Practice has long served Medicaid patients alongside clients with private insurance, and Presley fell in love with the providers there.

"Everyone in that office is so kind and so caring and so helpful," she says.

Six weeks after Isabella was born, however, the two of them lost their Medicaid coverage: Since Presley's husband was working again and she'd gone back to the hair salon, the family made too much money to qualify. So they went without any insurance until Presley found out she was pregnant with Parker, making her eligible for Medicaid again. She returned to South Federal Family Practice for her prenatal care, and when she was seven months along, her husband lost his job again, which allowed Isabella to get back on Medicaid, too.

By the time Parker was born, in June, the Presleys had moved from Wheat Ridge to Denver, just blocks from South Federal Family Practice. But Presley soon found out that she couldn't take her son there with the rest of the family. Rather than being enrolled in Colorado's regular Medicaid plan, which allows recipients to see any doctor who accepts Medicaid, he was automatically enrolled in Denver Health's plan. That meant Parker would only be allowed to see Denver Health doctors at Denver Health clinics.

"I want to see this doctor," Presley says of Dr. Roy Durbin, the founder of South Federal Family Practice. "He has a history with my family and my children. I'm a little old-school, where I want one doctor."

Presley came home from the hospital to a pile of paperwork from Health Colorado, the outside company that the state pays to enroll Medicaid recipients in the various plans available to them. The paperwork instructed her to call if she wanted to opt Parker out of Denver Health's plan, which she did. She also got paperwork informing her that Isabella would be switched to Denver Health, as well. So she called Health Colorado and told them she didn't want Isabella on Denver Health's plan, either.

"But I keep getting paperwork saying she's on Denver Health again," Presley says, exasperated. She pulls out the most recent letter she received; attached is a Denver Health Medicaid Choice insurance card with Isabella's name on it. "Obviously, what I did didn't work."

Presley is one of many patients who get caught in what some local doctors say is a frustrating, time-consuming and mysterious system that automatically and repeatedly funnels all Denver Medicaid recipients into the Denver Health network -- often without patients realizing it until they show up for their next appointment, only to be told that Medicaid won't pay for them to see their non-Denver Health doctor anymore.

"I'm not bashing Denver Health," says Durbin. "We need Denver Health, and we need the doctors in Denver Health. But patients should have the freedom to go where they want, at the time that they need that particular care."

Dr. PJ Parmar feels the same way. Parmar has a private practice in Aurora where he serves refugees, most of whom are on Medicaid. In June he started a petition on calling for Colorado to eliminate "managed care Medicaid," as he calls it, or Medicaid plans that limit patients to a certain set of doctors. The petition has garnered more than 2,000 signatures and the attention of state senator Irene Aguilar, who is a former Denver Health doctor and a current member of Denver Health's board of directors.

Aguilar's attention has, in turn, prodded state officials to begin taking steps toward dismantling passive enrollment, something longstanding providers say they've been requesting for years. As with most institutional changes, however, the fix won't come quickly. And furthermore, Parmar and other doctors believe that the proposed solutions don't go far enough.

"That's a first step," Parmar says. Getting rid of passive enrollment, he says, "just stops new people from being put into this, just filling up the bucket. But it has nothing to do with the fact that the bucket was already overflowing." There are now more than one million Coloradans on Medicaid, thanks to expanded eligibility under the federal Affordable Care Act. Medicaid was created by the federal government but is managed by the states. In Colorado, that job falls to the state Department of Health Care Policy and Financing, or HCPF. Medicaid is paid for with a mix of federal and state dollars.

There are four health plans available to Colorado Medicaid recipients. They are:

• Regular Medicaid. This plan is available statewide. Patients on this plan can see any doctor who accepts Medicaid, and they don't need referrals.

• Accountable Care Collaborative. This plan became available statewide in 2011. Patients enrolled in this plan choose a primary-care doctor who manages their health outcomes but doesn't necessarily micromanage their care; patients don't need referrals to see other doctors who accept Medicaid.

• Rocky Mountain Health Plans. This plan is only available to patients in the western part of the state, including Mesa and Delta counties. Patients don't need referrals to see other doctors in the RMHP network, which Patrick Gordon, RMHP's associate vice-president of government programs, says includes the majority of physicians and specialists in the area.

• Denver Health Medicaid Choice. This plan is available to patients in Denver, Adams, Arapahoe and Jefferson counties. Patients need referrals from their primary-care doctor to see specialists, get tests and stay in the hospital.

Denver Health's plan is the only one with passive enrollment, and it only applies to Medicaid recipients who live in Denver County. Passive enrollment was established in 2006 as a way to connect patients with a so-called medical home.

"Prior to that, they'd just be given a list and they'd have to get on the phone and call around and see if someone would see them," says LeAnn Donovan, executive director of managed care for Denver Health. "By having a medical home, we can coordinate all their care. They get the pharmacy here, all their services. They don't have to try to navigate the system on their own."

Because Denver Health serves as this medical home, the state pays the not-for-profit organization a fee for each patient enrolled in its plan -- whether a doctor sees them or not. That's a different pay structure than the one that's used for most doctors who see Medicaid patients, such as Parmar and Durbin. The state pays them only for the services they provide.

As of July, there were 66,345 patients enrolled in Denver Health Medicaid Choice. The fee that Denver Health receives for each of those patients is determined by their health (someone with a chronic illness, such as diabetes, nets a higher fee than someone with fewer needs), but it reports being paid an average of $175 per patient per month. Over the past four years, that's brought in about $129 million a year.

Denver Health officials are quick to point out that the organization doesn't keep all $129 million. Rather, they say, 75 percent of that is eaten up in payments to "external providers" for services that Denver Health doesn't have in-house, as well as costs to administer the plan, leaving it with $32 million in revenue a year.

"It's not a moneymaker," says Donovan.

But saving money is why the state pushed for managed-care Medicaid plans to begin with. Back in the '90s, when HMOs were being hailed as the next great cost-savers, state legislators passed a law requiring that 75 percent of Colorado's Medicaid patients be enrolled in a managed-care plan. The plans were similar to private HMOs in that patients were restricted to seeing doctors within a particular network. At first, a half-dozen insurance carriers, including Kaiser and United Healthcare, signed on. Denver Health participated, too, but didn't have its own Medicaid HMO; instead, it was part of a larger plan known as Colorado Access. The state paid the insurance companies a flat fee per patient, which was supposed to cover their costs.

However, in 2000, the Medicaid HMOs began suing the state for underpaying them. Most of the lawsuits ended up in settlement agreements that cost the state tens of millions of dollars. In 2002, lawmakers repealed the 75-percent law, and by 2003, the head of HCPF was calling Medicaid HMOs a "failed experiment." The insurance companies began dropping their plans. In 2006, the last of the Medicaid HMOs, Colorado Access, pulled out.

But by then, Denver Health was no longer part of Colorado Access. In 2004, it had reached what Donovan called a "critical mass" of patients and broken off to form its own plan. In many ways, the Denver Health Medicaid Choice plan resembles an HMO: Each patient chooses a primary-care provider who works for Denver Health, and they must get approval from that provider to see any specialists as a way to manage care and save money.

Laurel Karabatsos, the state's deputy Medicaid director, says the state sees value in the Denver Health plan. "Denver Health has a huge presence in Denver County and is a safety-net provider," she says, meaning that Denver Health treats anyone who needs it, regardless of their ability to pay. In 2013, Denver Health spent more than $450 million on "uncompensated care." "Having a steady stream of enrollments is helpful to Denver Health in managing their financials," adds Karabatsos. "But it's also beneficial to [HCPF] because managed care saves us money. Instead of a client going to fifteen primary-care providers and we get billed for all those services, Denver Health is able to manage that better."

According to Denver Health, 80 percent of the patients currently on the Medicaid plan were passively enrolled. In order to disenroll, a patient must call Health Colorado within ninety days and request to be switched to a different plan. They may also disenroll in the two months before their birthday month.

Patients are supposed to get letters like the ones Presley received, explaining that if they don't call Health Colorado and request a different plan, they'll be enrolled in the Denver Health Medicaid Choice plan. But there are several problems with the letters, doctors and patients say. Many patients report not getting them at all. Medicaid recipients tend to be a transient population, and Denver Health admits that 25 percent of the mail it sends to its Medicaid Choice patients gets returned. And even if some patients get the letters, not everyone understands them. That can be due to language barriers, doctors say, or because the letters can be downright confusing. Nowhere do they plainly explain the practical consequences of not calling Health Colorado and disenrolling -- namely that they may not be able to see their regular doctor anymore.

But as Presley's case shows, even calling Health Colorado and requesting a switch is not a guaranteed ticket out of Denver Health's Medicaid plan. Health Colorado officials declined to speak with us for this article and directed all questions to HCPF.

Dr. Jay Markson, one of seven pediatricians at Children's Medical Center in central Denver, has seen the frustrating effects of the system firsthand. Children's Medical Center was founded in 1931, and about 20 percent of its patients are on Medicaid. It's a population that Markson and the other doctors are passionate about serving.

But up to ten times a week, a parent shows up only to find out that his or her children have been passively enrolled in the Denver Health Medicaid Choice plan. In some cases, the family has been coming to the practice for generations, says Markson, who has worked there since 1985. "That obviously rankles the hairs on the backs of our necks, because we like to protect the patients who want to come here."

And it upsets the patients, too. "First, you take out the box of Kleenex when they find out they've been auto-assigned to a place they don't want to go," Markson says. Then, the staff does everything in their power to help get the patients back. But it's not easy. "It takes an act of God to get them off of passive enrollment and where they're supposed to be."

Denver Health says it's not trying to keep patients from going where they want to go. "We see over 400,000 patients a year that want to come here," says Elbra Wedgeworth, chief government and community relations officer for Denver Health. "Why would we be going out and getting people and making them come here? That's not what we do."

Craig Gurule, Denver Health's government-products manager and the staffer who deals with these issues on a day-to-day basis, says the organization understands that if a patient already has a relationship with another doctor, they might not want to come to Denver Health. In those cases, Gurule says Denver Health informs them how to disenroll.

"Where some of the issues lie sometimes is that there are instances where we're not made aware that this individual has an existing relationship," he says, "and they're seen by a non-Denver Health provider and then that provider bills Medicaid...which says, 'No, you need to go to Denver Health,' and then that's the first time we become aware of the issue."

Other times, Gurule says, patients go to a pharmacy to fill their prescription and are told by the pharmacist that their Medicaid has been switched to Denver Health and they can't get their medicine. Patients on Denver Health's plan can only obtain their prescriptions at Denver Health pharmacies, which only fill orders from Denver Health doctors.

That's what happened to Rhanda Gibson's family. Her oldest daughter, Faith, has diabetes and asthma. In 2010, Faith became ill and needed a prescription. But when Gibson's husband, Anthony, went to the pharmacy to get it, he was told that Faith had been switched to Denver Health and that Medicaid wouldn't pay for the medicine that the family's doctor, Andrew Lieber, had prescribed. Lieber ended up paying for it out of his own pocket.

The anecdote landed in the Denver Post in a bigger story about a nine-year-old boy who died because a glitch in the computer system said he wasn't covered by Medicaid even though he was. The boy had asthma and wasn't able to get his medicine.

After Faith's story appeared in the paper, Gibson says, the state quickly put her daughter back on a plan that allowed her to see Lieber. "My kids have been going to him since they were born," says Gibson. "Nobody knows our children's medical history like he does."

But in August, another of Gibson's four daughters was inexplicably switched to Denver Health. Gibson, who has lived at her current address for three years, says she never received a letter. Instead, she got a call from Lieber's office on the morning of her kids' back-to-school checkups, informing her that the computer showed that her fourteen-year-old daughter, Tyra, had been passively enrolled into Denver Health's plan. Her other three daughters had not.

"They said it wouldn't happen again," Gibson says.

"And we're right here again," adds her husband.

Lieber isn't surprised. "They swore to me four years ago they would have a computer fix for this, and they've never done that," says Lieber. About 25 percent of the patients seen at his practice, Rose Pediatrics, are on Medicaid. After complaining about the system for years, Lieber says, he's given up. "I don't have it in me to fight with them anymore."

Lieber isn't the only provider who feels that way. Jim Doody, a physician assistant at Horizon Primary Care, says he tried to set up a meeting with Denver Health two years ago but was unsuccessful. He wanted to talk about the problems Horizon was experiencing at its Green Valley Ranch office. The office recently expanded in order to better serve families in that neighborhood, but Doody says that nine out of ten Medicaid patients who show up have been passively enrolled in Denver Health and don't realize it.

It used to be that Doody's office would see them for free if the patient started the process of disenrolling from Denver Health. But it has had to stop doing that. "It was too many patients and too many dollars out the door," he says. "We turn them away, which is unfortunate. We have availability in that office every single day."

Markson has also spoken up about the issue, including on several state Medicaid advisory committees. "There's a lot of head-nodding: 'Yes, that's a bad thing. Yes, we're going to do something about it,'" he says. But until recently, nobody was willing to follow through. Parmar's doggedness seems to have changed that. The 39-year-old doctor founded his practice, Ardas Family Medicine, in 2012. His mission to serve refugees stems from his own background: His parents emigrated from India to Canada and eventually to the United States, where Parmar grew up. Of his refugee patients, he says, "I can identify with them."

When it comes to Denver Health Medicaid, Parmar hasn't been willing to give up. He's written blog posts about the situation and hounded Gurule and the staff at Health Colorado, often e-mailing them about individual cases. He even left his wife at the hospital several hours after she gave birth to their son this past December and drove through a snowstorm to attend a focus group with the state and Denver Health. When six months went by and it seemed there were still no changes under way, Parmar started the petition and put it out on Facebook. And because he guessed that politics were at play, he also e-mailed it to Colorado's congressional delegation and every member of the state House and Senate health and human services committees.

Senator Aguilar was the only lawmaker who e-mailed him back. "I wrote back to him and I said, 'Why don't we meet with HCPF?'" Aguilar recalls. "He said, 'I've met with them, and they've never done anything for me.'" But Aguilar eventually convinced him to attend a sit-down, and that meeting seems to have lit a fire under state officials.

"We were aware of this issue beforehand," says HCPF's Karabatsos. "This petition just helped shine a light on the issue a little bit more and helped all of us move more quickly."

Aguilar's involvement probably didn't hurt, either. "I do think it's true that a legislator gets attention that the average provider can't get," says the lawmaker, who has been on both sides of it. For 23 years, she worked as a doctor at the Denver Health Westside Health Center. Even though this issue was going on while she was there, Aguilar says she was unaware of it.

"As a doctor for Denver Health, you're not as aware about how people's health care is paid for." Unlike a doctor with a private practice, she explains, Denver Health providers get a paycheck every two weeks regardless of who they see or whether those people pay.

Some of the comments on Parmar's petition are as follows:

-- "I am a family physician, a safety net provider in Englewood...I see a gentleman monthly to manage his multiple complicated medical problems. He lives in Denver, and when he applied for Medicaid, I instructed him to get 'regular' Medicaid, which he did. I continued to see him and billed Medicaid monthly. Then suddenly he had Denver Health Medicaid. He couldn't fill any of his prescriptions or get his monthly lab work done. When he called to get it fixed, they were eventually willing to switch him back (after he spent several hours on the phone and contacted me several times for assistance). However, they wouldn't make it active until the first of the next month. So he still couldn't get anything that he needed, and I was never paid for his appointment during the time they decided to switch him to Denver Health Medicaid."

-- "I, as a social worker, work with pregnant teens and their babies at Children's and University hospitals. We have many young ladies who come and develop a relationship with us, only to have their Medicaid switched to Denver Health right before they deliver or after they deliver, and they are required to go to Denver Health, but do not desire to do this. Supposedly, our young ladies can call to change their Denver Health Medicaid...but most of them have run into roadblocks and have talked to individuals on the phone who won't let them change."

-- "I moved here almost two years ago and quickly fell into a position that required getting my children and myself on Medicaid. I was not informed when I applied that there were two types of Medicaid, and I was just told that I had to go to a specific Denver Health facility.... I also had to wait about a month just to have my first appointment to see a doctor."

At the time that Parmar posted the petition, Karabatsos says, HCPF was already in talks with Denver Health about dismantling the passive-enrollment system. The idea is to move to a system that enrolls patients based on their provider history: If they're a Denver Health patient, they'll be enrolled in Denver Health's plan. But if they have a history with another provider, they'll be enrolled in a plan that allows them to continue to see that doctor.

It seems like common sense. But making it happen won't be simple. To get rid of passive enrollment, the state must also make changes to the computer system that pays doctors for providing services to Medicaid patients. The current system is both antiquated and complicated, and rather than modify it, the state is in the process of replacing it. The estimated cost to do so is $180 million. Officials expect the new system to be online by 2016.

"We're in the process of procuring a new computer system," Karabatsos says, "and it will take us a couple years to get that up and running." In the meantime, she says, the state is working with the vendor that runs its system to see if there's a quicker way to make the switch.

Denver Health officials acknowledge that there have been "some bumps in the road" with passive enrollment, and they say they're fine with getting rid of it for patients who have a history with a non-Denver Health doctor. "We're very supportive of that, because I think it's better service for the patient not to be disrupted," Donovan says.

Officials also say that Denver Health is willing to grant "authorizations" to outside doctors such as Parmar to get paid to see patients who show up unaware that they've been switched to Denver Health and who need to see a physician right then. However, some doctors report that they have difficulty getting those authorizations or can't get them at all.

Even without passive enrollment, Donovan and others are confident that Denver Health will continue to attract patients. Its plan offers several perks, she says, including free eyeglasses, a two-month supply of diapers for mothers who deliver at the hospital, and health coaches and case managers who help patients with complex medical conditions stay healthy.

As for the wait list to get an appointment, Denver Health officials say they're working on it. In 2013, the list had more than 10,000 adult patients on it. But over the past year, the organization has hired seventy new staff members in its primary-care clinics, says spokeswoman Kelli Christensen, including seven doctors, twelve nurses, eleven physician assistants and nurse practitioners, three dentists and seven behavioral-health specialists. Denver Health has also expanded the hours of its clinics and plans to break ground on a new clinic in southwest Denver this fall. Today the wait list has decreased to 5,500 patients. The median time to get an appointment has also dwindled from several months to less than thirty days, Christensen reports.

But those numbers don't necessarily apply to Denver Health Medicaid Choice members, officials say; Denver Health has always made the patients who belong to its own health plans a priority. As of July, the wait time for new Medicaid patients to get an appointment was less than eight days, Christensen says. The term "wait list," she insists, is a misnomer.

"I am just amazed at what we do for these patients," Donovan says. None of the doctors who spoke to Westword had concerns about the skill of Denver Health's physicians or about the important safety-net role that the institution plays. They simply believe that Denver Health is hanging on to a brand of managed care that has become obsolete.

"In my opinion, every one of them needs out immediately so they can have freedom of choice," Parmar says of the 66,345 patients enrolled in Denver Health's plan. "And Denver Health and I can compete on quality and customer service."

There's now a better way to manage patients' care, the doctors say, and in Colorado, it's taken the form of the Accountable Care Collaborative. Under that plan, patients have a primary-care physician who oversees their care, but they're free to see other doctors, as well. (Denver Health participates in the ACC, too, meaning that patients enrolled in the ACC can choose a Denver Health doctor as their primary-care physician. But the ACC patients can go outside Denver Health without a referral, unlike Denver Health Medicaid Choice patients.)

"I don't think the biggest issue right now is passive enrollment anymore," says South Federal's Durbin. "Because if they follow through and do what they said, then it's done. My biggest concern is, why don't they let the patients go where they want? Why are they still locking them in?"

"We all want to be on the same level playing field taking care of these patients," Markson says. "It seems closeted and hidden the way Denver Health Medicaid runs."

If that sounds like sour grapes from Denver Health's competitors, consider what Karabatsos of HCPF has to say: "The Accountable Care Collaborative was our effort to begin coordinating clients' care and pay for outcomes and improved health and not do it with traditional managed care," which she says could be seen as having "perverse incentives." "We're talking with Denver Health about this. We want them to be a big player in Medicaid, but we want to move their managed-care contract so it's more aligned with the ACC."

As for Aguilar, she says she's determined to see this issue through to its final resolution. She's encouraged by the assurances she's received from both HCPF and Denver Health that they're working toward a solution, at least when it comes to eliminating passive enrollment.

"I think the reason that it's important is there are so many people on Medicaid in our state," Aguilar says. "And I don't want people discouraged out there."

That's exactly how some of Parmar's patients feel.

Take the Nepali family, whose 83-year-old grandmother has diabetes. They moved to Denver in March, and for three months, they were enrolled in regular Medicaid. They found Parmar the way many refugees do: through word of mouth. His office is near their house, and they appreciate that his clinic specializes in refugees and is walk-in only, which means they don't have to worry about missing an appointment due to spotty transportation.

Parmar helped the grandmother get her insulin and assisted the family in getting Medicaid to pay for a wheelchair. But in June, unbeknownst to the family, the grandmother was switched to Denver Health Medicaid. They didn't realize it until they showed up at King Soopers to get her medicine and the pharmacist told them it would cost the full $70 because Medicaid would no longer cover Parmar's prescriptions. Parmar helped the family disenroll from Denver Health, and by July, they were back at his office.

One recent afternoon, the family showed up because the grandmother needed some tests. The grandmother, who speaks no English, sat in her wheelchair wearing a traditional yellow-and-blue dress and maroon knit cap despite the summer weather. Her grandson, who speaks English well for someone who arrived in the United States just three years ago, explained the family's situation. "Dr. PJ," he insisted, "is family doctor."

It was difficult for the family to make the trek to Denver Health, he said, and they ended up paying for the grandmother's medicine out of pocket. He's grateful to be back with Dr. PJ.

"I'm frustrated," he said. "Why did they make it so hard?"

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Melanie Asmar is a staff writer for Westword. She joined the paper in 2009 and has won awards for her stories about education, immigration and epic legal battles. Got a tip? She'd love to hear it.
Contact: Melanie Asmar