You asked if the HUSKY program's dental subcontractor, Healthplex, recently reduced dentists' fees. If so, you wanted to know how this squared with the legislature adding $ 20 million to the HUSKY budget for dental reimbursements. Finally, you asked if Healthplex had a financial incentive to reduce dental care to keep a greater share of the payments from the HUSKY managed care organizations (MCOs).

Two weeks ago Governor Rell directed the Department of Social Services (DSS) to terminate its contract extension negotiations with the four MCOs serving HUSKY clients and to relieve the four of any health care decision-making responsibilities for these clients, effective December 1, 2007. This largely was due to two of the MCOs refusing to comply with the state Freedom of Information Act, which she and others, including the Superior Court, believe they have an obligation to do. In her letter to legislative leaders, Governor Rell added that DSS would take direct control of most of the HUSKY functions, including “doctor payment amounts. ” Although these developments would appear to render your inquiry moot, we will answer the questions to confirm whether what you heard was occurring.

The four MCOs had historically subcontracted with dental MCOs. Anthem, one of the largest MCOs, was providing dental services through an affiliate, WellPoint. In December 2006, Anthem was considering changing plans, believing that WellPoint did not have enough Medicaid experience. Anthem (and more recently WellCare) subsequently contracted with Healthplex, and the transition from WellPoint began in April 2007. Healthplex is based in Long Island, NY and does not maintain a physical presence in Connecticut.

A dentist from the Manchester area contacted the legislature soon after the transition stating that Healthplex had sent her a fee schedule with fees 50% to 70% lower than what WellPoint had paid. A dentist from East Hartford reported a similar occurrence. When told of this development, DSS made it clear to Healthplex that it should not be negotiating negative rates with dentists, to which, after a fair amount of discussion, Healthplex agreed. (Apparently, WellPoint had negotiated commercial rates with certain dentists to maintain and improve county network capacity and avoid enrollment freezes. )

Although the legislature appropriated an additional $ 20 million for dental services, the money was specifically earmarked to pay for the expected settlement in a 1999 lawsuit alleging inadequate dental fees in the Medicaid program, which had limited access to dental care by the poor. Moreover, DSS' Medicaid director, David Parrella, stated at the September 2007 Medicaid Managed Care Council meeting that his agency had no plans to pass through any of the $ 20 million to MCOs for dental services in FY 08; instead, the money could be used to “enhance the dental safety net system” (presumably community health centers and school-based health centers) in FY 08 (Minutes from Medicaid Managed Care Council Meeting, September 21, 2007). In subsequent email exchanges, Parrella mentioned DSS' plan to “carve out” dental services from managed care, which would move the dental services back into DSS direct control, with the additional funds going towards higher provider fees. This now appears more likely given the governor's recent actions.

Some have suggested that Medicaid managed care contracts that require the MCOs to assume full risk for the patients they serve provide an incentive to under-serve clients, which could include paying providers less. This is because under a full-risk model, the MCO is given a set amount and if it spends more than it receives in its contract, it cannot ask the state for additional payment; if it spends less, it keeps the excess. Although Healthplex is a full-risk dental MCO, we do not know whether this was behind its reduced fee schedule. As we mentioned above, Healthplex's predecessor, WellPoint, had negotiated relatively high provider reimbursements, which Healthplex might have found it difficult to sustain.

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