Since 2009 when The Department of Human Services awarded transportation contract to an out of state firm called LogistiCare. They claim to be a medical transportation company but do not have the burden of owning vehicles, insuring them, providing drivers, providing gasoline or maintenance. They are simply a call center that our Medicaid Beneficiaries call to establish eligibility and to make their appointments for transportation. From there LogistiCare assigns the calls to a contracted provider.
While I acknowledge the State of NJ has the right to privatize any contract it wishes to I believe that this particular contract should have had more protection for the actual transportation providers. After all we are actually supplying the transportation. This has taken away the providers ability to build a business.
Our industry has worked for Medicaids low reimbursement rate with a zero percent increase for 17 years, since 1994. [continued below]....
..... In fact, when LogistiCare came in as the broker, the first thing they did was lower the already low rate by 20%.
Our company has been transporting Medicaid Beneficiaries since 1997. As you are aware cost of living, gasoline, insurance rates, and Vehicle Repair costs have gone up significantly since then. Every company that contracted with the BROKER LOGISTICARE signed a contract with the original rates that Medicaid established in 1994. Our company has worked with this broker since they came into the state on July 1, 2009. We have been completely cooperative and compliant.
In the beginning LogistiCare established a preferred provider policy basically stating that if a client called in to make an appointment and requested a contracted provider the client could pick a provider they preferred. They are no longer honoring this policy. Clients are calling me up on a daily basis extremely upset because LogistiCare told them our company is booked and could not transport them. Of course it is a lie because LogistiCare never asked us to do the transport. This is making me look like I am refusing to service the client.
LogistiCare is now calling for existing providers to lower their rates by 25% or lose the trips to the lower cost providers. Also, they are flooding the market with new providers at the reduced rate. Our company has opted not to reduce our rate. Serving Medicaid trips is already a financial hardship on the provider. The only winner is LogistiCares profit margin. This company is NOT a New Jersey company they are based in Atlanta Georgia and their Parent Company (PROVIDENCE SERVICE CORPORATION) boasts a profit of over $250,000,000 per year.
This is going on all over the country. They are contracted in 38 states. They receive money from the states per beneficiary. They get money regardless if a client is transported or not. Their main goal is to move the least amount of people as possible so it looks like the state is saving money. By reducing the providers rate they are filling their pockets some more.
This Broker is destroying companies that have been around for years. While I understand that the State has a budget to balance so do the small businesses of NJ. If something is not done to regulate this broker I see more NJ Small Businesses going out of business. The rates that Medicaid Established in 1994 were fair for that time. Now I know from being in this business for 15 years that a raise in the rate is unlikely but a forced reduction? I believe that the current Medicaid rate should remain the same and LogistiCare should have to honor that rate. Why have we been left to be slaughtered by a broker after serving the Medicaid Community for so many years?
My Clients are already seeing less of my company and more of the reduced rate providers daily in their homes and facilities. This will continue, regardless of how many times they request our company. LogistiCare has no intention of honoring their preferred provider requests. This has taken away the Medicaid Beneficiaries right to choose who their health care provider is.
Please note that cab companies, car services, and other non-medical groups will be moving sick and elderly residents in our state. LogistiCare just sent a taxi cab to one of our nursing homes last week for a client that is in a wheelchair. The standards are reduced for vehicles and driver training.
LogistiCare has just been left to do whatever it wants to do and the Residents of NJ are suffering. LogistiCare will continue to use the low cost providers only to increase their own profit margin while the Medical Transportation providers lose everything it took years and years to build.
So my question to Medicaid is why was LogistiCare given the power to negotiate rates in their contract. It is not helping the state of NJ save money it is only filling LogistiCares Pockets. They do not have the astronomical costs that we do.
We are forced to carry much more expensive insurance than ever before.
They have approached providers in a way that can be considered cooperate bullying. Their bottom line is sign this new contract and take the lower rate or you will lose your trip volume.
I have spoken to many other companies that have not agreed to their lower rate and they too have lost their trips. This bullying will eventually cause thousands of NJ residents to be unemployed, something President Obama is trying to fix. NJ will lose Tax Revenue from the small businesses. While LogistiCare thrives off of the backs of the remaining providers.