Ohio Medicaid preaches transparency, withholds watchdog reports

BY: MARTY SCHLADEN – Ohio Capital Journal

Ohio Medicaid director Maureen Corcoran often stresses the importance of transparency in delivering $35 billion worth of health care each year to Ohio’s poor and disabled. But in response to an open-records request, the department last week refused to provide copies of key, federally required reports meant to ensure that its biggest contractors aren’t gouging taxpayers. 

The department’s lawyers said they were refusing to provide the records at the behest of the contractors, which the reports are meant to help keep accountable. 

The companies — each of which is getting more than $1 billion a year from taxpayers — said the watchdog reports contain trade secrets. The claim seems questionable, however, because some other states’ Medicaid departments, including Arizona, post their federally required reports on their websites.

The Ohio department provided summaries of the reports, but a prominent health care think tank says that the underlying numbers are even more important and the public should be allowed to see them.

The summaries of the watchdog reports are “really important, but it’s the data elements that provide a more detailed view of how the (contractor) is applying its Medicaid revenues,” said an article posted earlier this month by the Georgetown University Health Policy Institute’s Center for Children and Families.

Those data might be of particular interest in Ohio, where serious questions arose late last year about whether all profits collected by pharmacy middlemen are being properly accounted for. Ohio Attorney General Dave Yost won’t comment on the investigation, but his office last month requested data from the Medicaid contractors that would shed light on how their pharmacy subcontractors are reporting millions in profits and expenses.

Simple concept

On Dec. 10, the Capital Journal filed an open-records request with the Medicaid department for “medical loss ratio” reports filed by the state’s five managed-care contractors in 2019 and 2020. 

As with most rules regarding government health programs, those for determining medical-loss ratio can be arcane and laden with jargon — including the acronym for “medical-loss ratio,” MLR. But the concept is simple: It requires private-sector contractors to report how much taxpayer money they’re using to pay for health care, and how much they’re pocketing in the form of profits and administrative costs.

In Ohio, the minimum medical-loss ratio a managed care company can have is 85%. That means a company must spend at least 85% of the money it gets from the Medicaid department on patient care, quality improvement and fraud prevention.

The number also is a tool that can be used to evaluate companies participating in the Medicaid managed-care system, which attempts to incorporate market efficiencies into a government health care program. The requirement to report MLR “is intended to allow comparisons of plan performance among the major healthcare programs and across states,” the Medicaid and CHIP Payment and Access Commission, a non-partisan congressional agency, wrote in a January issue brief.

Despite its claims of transparency, the Ohio Medicaid department didn’t directly answer earlier this month when asked why it took three months to respond to a request for reports that presumably are readily available.

In supplying summaries — but not the full MLR reports — the department’s legal staff wrote, “Please note that the managed care organizations have identified that the reports are proprietary information and trade secrets under ORC 1333.61. As such, we are denying your request.”

The law the email referred to defines trade secrets as business information the secrecy of which has “independent economic value, actual or potential …” But the Ohio Department of Medicaid has been burned in the past by allowing secrecy among its contractors and subcontractors.  

In 2018, it was under pressure from investigations by The Columbus Dispatch and then-Auditor Dave Yost. The agency commissioned an analysis that determined — unbeknownst to the department — that drug middlemen hired by the managed-care contractors in 2017 collected almost a quarter-billion dollars more for prescription drugs than they paid the pharmacies that dispensed them. That was at least three times the going rate, the Medicaid department’s own analysis said.

The Medicaid department was asked earlier this month, after it denied the request for MLR reports, whether it was allowing its contractors to determine what were and were not trade secrets. Spokeswoman Lisa Lawless responded by saying the department’s original denial of the records request answered that question.

Trade secrets, or just secrecy?

It might be a little hard to see what information in the medical-loss ratio reports would lose its “independent economic value” if it were publicly reported. If you want to really geek out, scroll down to Section (k) of the passage from the Code of Federal Regulations that sets out the 13 requirements for an MLR report. 

All require aggregate numbers such as “total incurred claims,” “premium revenue” and “taxes, licensing and regulatory fees.” In other words, none of the requirements appears to call for things such as pricing or individual claims data that are specific enough that they would be commonly considered proprietary information.

Indeed, Georgetown’s Center for Children and Families reports that some other states’ Medicaid departments post their managed-care companies’ MLRs online.

Here, for example, is a link to the audited report by Arizona Complete Health for the year that ended on Sept. 30, 2020. It’s a spreadsheet with rows listing what part of the federal code the information refers to, quarterly amounts and notes about them.

Lawless was asked to explain specifically how the data required for the reports amounted to trade secrets. She responded by saying the department’s email denying the reports answered that question and she referred to the care companies’ contracts with her agency.

And then Lawless again touted what she said was her agency’s emphasis on transparency.

“Since 2019, Ohio Medicaid has worked to improve the (managed-care organization) provider agreements to maximize transparency and minimize proprietary designations to the extent permitted by law,” Lawless wrote.

To some others, it’s a no-brainer. Federally required reports intended to make sure huge contractors aren’t ripping off health care funds intended for the poor should be available to the public, they say.

“Since this is a publicly mandated report about the expenditure of public funds on behalf of public program beneficiaries, there is a compelling rationale for disclosure—without redaction,” the Georgetown report said.