Whistleblower: Medicaid Managed-Care Firm Improperly Denied Care To Thousands

Kaiser Health News, December 1, 2017

The violations were 'widespread, systemic in nature,' and they posed a 'serious threat to members' health and safety,' according to an internal report.

This article first appeared December 01, 2017 on Kaiser Health News.

By Chad Terhune

SynerMed headquarters in Monterey Park, Calif. The management firm oversaw care for 1.2 million patients. (Chad Terhune/KHN)

In early October, an executive at one of the nation’s largest physician-practice management firms handed her bosses the equivalent of a live grenade — a 20-page report that blew up the company and shook the world of managed care for poor patients across California.

For years, she wrote, SynerMed, a behind-the-scenes administrator of medical groups and managed-care contracts, had improperly denied care to thousands of patients — most of them on Medicaid — and falsified documents to hide it.

The violations were “widespread, systemic in nature,” according to the confidential Oct. 5 report by the company’s senior director of compliance, Christine Babu. And they posed a “serious threat to members’ health and safety,” according to the report, which was obtained by Kaiser Health News.

Days later, someone sent the report — labeled as a “draft” — anonymously to California health officials. Within weeks, state regulators had launched an investigation, major health insurers swept in for surprise audits, the company’s chief executive announced the firm would close and doctors’ practices up and down the state braced for a tumultuous transition to new management.

Kaiser Health News

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

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