Friday August 3, 2012

BOSTON (AP) - An investigation by the state Inspector General has found that a plan to contain the cost of providing health care to low-income residents is actually costing more.

The plan calls for insurers that contract with the state to manage the care of low-income Medicaid patients to negotiate lower prices with providers. The report found that the plans pay higher fees to many hospitals and doctors than the traditional Medicaid program pays for the same services.

Hospitals with a recognizable name or that dominate a particular region were paid up to 2 ½ times the standard rate.

The higher payments cost taxpayers $328 million during the 2011 fiscal year.

The Boston Globe reports that the Inspector General recommends that the state use its contracts with the plans to cap payments.