Appalachian hospital chain, facing loss of 25,000 Medicaid patients, sues managed-care firms and state

"Appalachian Regional Healthcare, the largest health care system in Eastern Kentucky, has filed lawsuits against two of the state's Medicaid managed care companies, alleging that the managed care companies had not paid claims promptly," report Valarie Honeycutt Spears and Beth Musgrave of the Lexington Herald-Leader. ARH said it treats about 25,000 Medicaid patients at its eight Kentucky hospitals.

The moves came after Coventry Cares, one of three managed-care organizations hired by the state, said it would cancel its contract with ARH as of May 4. ARH sued Coventry in federal court on Monday; the previous Thursday, April 12, it sued "in Franklin Circuit Court against Kentucky Spirit Health Plan Inc. and the Cabinet for Health and Family Services." On March 29, "Coventry Coventry told ARH that it was terminating its contract with ARH effective May 4."

Coventry spokesman Matthew Eyles told the Herald-Leader, "We were effectively forced to break our ties with ARH until the Commonwealth takes steps to treat all MCOs equally and makes some key decisions to guarantee greater stability in the program, such as paying MCOs fairly based on whether they have healthier or sicker members." Cabinet spokeswoman Jill Midkiff said the issues don't indicate a problem with the managed-care system the state adopted Nov. 1. (Read more)