There are some jobs you do strictly for the paycheck. There are some jobs you do because of a higher calling and, bonus, you happen to get a paycheck too.

And then there are those high-calling kinds of jobs you do even when the paycheck goes away, as it has four times for the nurses-cum-angels at Coastal Kids Home Care since the multi-billion dollar Xerox Corp. took over processing Medi-Cal claims for the state’s Department of Health Care Services.

Salinas-based Coastal Kids Home Care is the only agency providing palliative care and hospice services to low-income, dying kids in the tri-county (Santa Cruz, San Benito and Monterey) area, and a portion of Santa Clara County up to about Mountain View. To receive the services (including on-call, around-the-clock nursing care; comfort care; administration of painkillers and other pharmaceuticals; counseling services for the critically ill or dying children and their families; and uplifting things like art and music therapy for those children who want to receive it) there are a couple of criteria the kids must meet.

They must be under the age of 21, they must be enrolled in Medi-Cal (California’s Medicaid program that serves low-income families and individuals), and they must have a diagnosis that they are dying or critically ill. That means, for example, not just a diagnosis of cancer, but a diagnosis that the cancer has metastasized and spread to the organs. Or a critical need for a heart or liver transplant – those horrible nightmare conditions that can fill a parent just hearing about them with dread.

Xerox State Healthcare LLC took over the billing for the Department of Health Care Services near the end of 2011, although Coastal Kids wasn’t aware of the change until March of 2012.

“We felt it by that August,” says Margy Mayfield, a registered nurse and Coastal Kids’ co-founder and executive director. “Claims were being denied, or they would pay one line of a claim and not the other eight.”

Coastal Kids was selected in 2010 to launch a pilot program to take care of critically ill and dying youngsters on Medi-Cal. The state, ironcially, passed legislation for the program because they determined it would be revenue neutral. About 18 months later, a study by University of California Los Angeles showed the pilot was more than budget neutral: It saves the state about $1,600 per month per child.

“We’ve struggled since Xerox took over. I don’t want to beat on the people who are administrators for the program, but we’re getting lost in the shuffle,” Mayfield says. “And God bless our nurses, they’ve gone without some checks. They’ve been short three to four times in the past year, including one this month.”

The overall problem seems to stem from what Mayfield describes as “coding errors.” The codes that Medi-Cal provided to Coastal Kids to do its billing, in some cases, flat-out don’t work.

For example, when a terminally ill child nears death, Coastal Kids sends a social worker to provide anticipatory grief counseling. Medi-Cal then pays the agency a one-time fee of about $1,200 to provide 22 counseling sessions to bereaved parents, grandparents and siblings in the year after the child dies.

The code has never worked.

“Finally this year, I had to get nasty and they cut me a check,” Mayfield says. “A Xerox field rep came to our office and confirmed it wasn’t us, that it was a computer glitch and they don’t know why. After much arguing back and forth, I got one check for $20,000 before Christmas.”

But she’s continued having to argue for the remainder. Xerox has promised she would receive a check for another $20,000 by the end of this week.

(The code, by the way, still doesn’t work. Coastal Kids is receiving what it was owed previously, but it still can’t bill for current bereavement care.)

Another example: Coastal Kids is supposed to receive a payment of $300 per month per child for administering the program. They were told in January 2013 that fee would kick in July 1, 2013. Then last January, a memo came out saying Coastal Kids would finally be able to bill for it on Jan. 27.

“And can you?” I asked Mayfield.

“No,” she says.

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Coastal Kids mailed in $36,000 in back billing for that particular code, and then looked it up on the Medi-Cal system: They’re to be reimbursed $44.98 per child, and not the $300 they were promised.

“We sent off an email saying this needs to be corrected immediately, and Xerox responded, ‘We’re looking into it,’” Mayfield says. “I responded, ‘We are not going to be very patient with this.’”

The Xerox field rep who visited recommended Coastal Kids switch over to electronic billing. Mayfield ran some numbers and found the agency could afford it if they moved to cheaper office space; the $500 per month they saved in rent was then folded into buying the software the agency uses to process bills electronically, and has helped get the small staff up to speed on the new system.

(Speed, of course, is a relative term. Medi-Cal rejected Coastal Kids application to e-bill five times before finally accepting it. One of those rejections, Mayfield says, came because the blue ink she had used to sign the application wasn’t quite blue enough.)

At any given time, there are about 20 kids enrolled in the palliative-care program for kids on Medi-Cal. In all, Coastal Kids cares for upwards of 110 kids at a time through a variety of other programs too. For example, Coastal Kids conducts home visits for moms with babies who were in neonatal intensive care, something they call a “Vulnerable Infant Program.” Last year, they made 300 VIP visits.

Now on top of the billing errors, Coastal Kids has seen a 20 percent increase in the number of kids it’s enrolled in the past year. The agency’s board of directors managed to raise about $35,000 to help bridge the cash-flow gap, but as Mayfield points out, “Once you dig a hole, it’s hard to get out of it.

“It’s momentous, hard work we do.” Mayfield says. “The kids don’t know we’re hurting because we keep doing the work. We’re trying to stay focused and positive.”

I reached out to Xerox about Coastal Kids Care a week before this column’s deadline. They acknowledged my request had been received; then on Monday, Xerox punted me over to DHCS.

In an email received Tuesday morning, DHCS Information Officer Carol Sloan writes the department and Xerox continue to work with Coastal Kids “to provide technical assistance and support necessary to address claims issues.

“Payment on several claims, particularly those linked to ‘Mom and Baby’ services was denied initially because of provider billing errors,” Sloan writes. “The denials have been reviewed and it was determined they were denied correctly; however, we have asked Coastal Kids to submit further information so we can review the denials again. To date, we haven’t received the requested information.”

DHCS made that request on Feb. 7.

Sloan acknowledges their system may be lagging a bit. DHCS and Xerox paid 23 claims (that initial $20,000 Mayfield mentioned) and plans to pay the other $20,000 this week.

“Once the system has been updated to allow reimbursement for the billing codes… the number of claims that were included in the interim payments will be submitted for processing on behalf of Coastal Kids,” Sloan writes.

In a December 2012 article on the industry website “Kaiser Health News,” Xerox Chairman Ursula Burns told Wall Street analysts that Medicaid contracts are “big and foundational” for Xerox as it evolves from a product company (copier machines) into a service company looking for higher profit margins. Those contracts, Xerox Senior Vice President for Government Healthcare Solutions Mary Scanlon said at the time, are worth $900 million a year.

According to Sloan, the Xerox contract for Medi-Cal services is worth $1.68 billion, and the base contract runs through June 30, 2016; California has options to renew through Dec. 31, 2022.

How much you want to bet Xerox is getting paid on time?

Mary Duan is the Weekly’s editor. Reach her at or follow her at

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(1) comment


Perhaps more articles on just what Medi-Cal isn't paying for in the various low-budget communities would be interesting. How many providers are at the mercy of Xerox and why isn't DHCS providing better oversight?

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