How do payments work? 

Currently, Maryland behavioral health (BH) services are “carved out,” meaning they’re processed separately from other medical services. This allows community providers the flexibility to hire effectively, serve all consumers, and maintain high levels of care. Read more about the carve out here. 

Most of these BH services are covered by Medicaid, the state-run health insurance program. The state brings in a third-party vendor, currently Optum, to oversee submitted service claims and issue payment to the providers. In theory, this electronic claim submission process should have clear requirements, quick submissions, and accurate payments – allowing BH providers like PDG to continue doing what they do best – serving Maryland residents with mental illness. 

Who is Optum? 

The Maryland Department of Health brought on Optum to replace Beacon Health Solutions as the BH repayment vendor. Optum didn’t have a great track record, but underbid the previous vendor and took over BH payments in January 2020. Almost immediately, the claims processing system run by Optum and their subcontractor, InfoMC, failed to work. 

PDG weren’t able to submit authorization requests for services or submit claims for payment.  Many providers, including PDG, received incorrect payments or no payments at all. Community BH providers struggled to maintain the positive cashflow necessary to continue hiring, bringing on new consumers, and maintaining high quality care. 

“Delayed reimbursements made it impossible for clinicians to assume the financial risk of taking on new patients.” – PDG Executive VP Sondra Tranen, Washington Post.

What about the State of Maryland?

The Maryland Department of Health instructed Optum to avoid these processing issues by disbursing payments based on 2019 totals. From January 1st to August 1st, 2020, Optum did just that – issuing over $1 billion in payments during the height of the COVID pandemic when most providers were pulling back services and submitting fewer claims. 

This overpayment resulted in massive debt and budgetary nightmares for most BH providers in Maryland. Finally, in October 2022, the state Department of Legislative Services released results of an audit on Optum and the Department of Health. The audit determined that Optum was not properly vetted and the health department didn’t assess allowed damages that could have sped up the recovery process. 

“The level of waste and ineptitude uncovered by this audit is disgusting and an indictment of the current broken leadership at the Department,” said State Sen. Clarence K. Lam (D-Howard) in a Washington Post article about the audit.  

Where are we now?

There’s no doubt that effective behavioral healthcare in Maryland is often an uphill battle. With legislation constantly threatening the system itself, very delayed payment rate increases, and staffing struggles, community BH providers have their work cut out for them.  

Since the release of the audit, many news outlets have covered the state’s deficiencies and broken BH repayment system. After dealing with the Optum ordeal and resulting financial troubles for almost 3 years, many providers feel validated by the audit’s findings. 

“I’m glad that this situation is finally getting some much needed press,” said PDG CEO Morris Tranen. 

PDG consistently communicates with the Maryland Department of Health, payment vendors, and other Maryland organizations to promote advocacy and effective behavioral health services in Maryland. We’re optimistic about this audit and the changes it will inspire in Maryland’s behavioral health, but we’re also more than ready to continue doing what we do best: serving and fighting for the residents of Maryland with mental illness.