Hospital CEO Blames Obamacare Contractor for Medicare Payment Delays

Thursday, 02 Jan 2014 11:36 AM

By Sandy Fitzgerald

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Employees at a Houston area hospital haven't been paid for nearly a month, and the facility's top official blames a contractor building the financial management system for the Obamacare insurance exchange website for delaying Medicare reimbursements.

Saint Anthony's Hospital CEO Jason Leday told ABC-KTRK in Houston that Medicare owes the facility nearly $3 million and he can't meet payroll for more than 150 employees until the reimbursement bill is paid.

Leday says Novitas Solutions, the federal government's new Medicare payment contractor for the south-central U.S. region is to blame. The company was hired by the Centers for Medicare and Medicaid Services (CMS), reports The Weekly Standard.

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The Texas Medical Association reports it has been getting other complaints about Novitas, which also operates the south-central region's Medicare website, which was launched two days before the HealthCare.gov site launched on Oct. 1. The regional Medicare website site also has problems similar to the troubles that initially plagued the Healthcare.gov site, and officials say it will not be fully operational until well into 2014.

Novitas was awarded a contract on Aug. 9 to build the backend system of the Obamacare website that handles accounting and premium payments to insurers. The company got the contract without having to bid for it under an emergency designation by CMS because of the fast-approaching Jan.1, 2014 launch of Obamacare.

The contract, valued at nearly $12 million, is just one of many contracts the company has with CMS, including some that cover doctor and hospital claim administration under the Medicare program.

Leday told KTRK that he's "very remorseful and disappointed" that he can't pay his employees. He said his own salary hasn't been paid in a year and that he has provided gas and grocery money for some employees from his own personal bank account during the past month.

"Its been hard for everybody," he told the television station. "This is a national issue that affects us locally. We are adapting to the new ways of doing business that have been created. We think we can be successful in 2013 and can take care of all of our employees through the transition."

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