Beshear vetoes prompt-pay bill but takes several steps to address problems in Medicaid; he and Haynes say it's working

Gov. Steve Beshear has vetoed the bill designed to make Medicaid managed-care firms pay health-care providers more quickly, but is taking administrative steps to address the issue.

Beshear said he agreed with the intent of House Bill 5 but it might have interfered with the contractual relationship between the state and the four managed-care companies. The bill would have subjected that relationship to the state Department of Insurance's review and investigation process for private-insurance payment complaints. 

"That language would have resulted in excessive costs for state government and taxpayers due to the expansion of the review process beyond the current parameters used for private insurance," Beshear's office said in a press release.

Instead, Beshear ordered the department to take over responsibility for review of prompt-payment complaints from the Department for Medicaid Services. "If improper payment practices are discovered, DOI can impose sanctions," the release said. He also ordered the department to audit each of the managed-care firms operating statewide – Wellcare, Coventry Cares, and Kentucky Spirit – at their cost.

Meanwhile, the firms have agreed to meet with every hospital they have under contract to reconcile outstanding accounts.  "This effort will begin immediately and continue until every hospital’s accounts receivable has been reconciled," the release said.  "The results will . . . be made public, in order to provide transparency and accountability." The firms have  agreed to meet with any other provider who wants a meeting.

Also, the Cabinet for Health and Family Services will hold eight regional forums for providers, managed-care firms, and Insurance Department representatives to discuss concerns and how to improve the system. Part of this effort will focus on "emergency room management that meets community needs without an ER operating as a de facto primary-care office," the release said. "A key component of controlling costs and improving health in a healthcare system is to provide the right treatment in the most cost-effective setting."

CHFS Secretary Audrey Tayse Haynes said the switch to managed care, made in November 2011, is working. “We are already seeing a tremendous increase in the use of preventive services, which improve health-care outcomes, while also reducing the enormous costs for treating chronic health conditions” such as diabetes-related amputations, she said.

Beshear said his plan would solve "lingering implementation problems" with managed care "while preserving the significant improvements in patient care and health care cost savings."

"Getting our people healthy and keeping them that way is not just good health policy, it’s good economics," Beshear said. "That’s why we will never return to the old fee-for-service system.  This is a significant cultural shift in medical care that has already happened across the country in both the private insurance market and in the Medicaid system."

Will Kentucky expand Medicaid, and if so, how?

By Molly Burchett
Kentucky Health News

Kentucky is one of the last states to decide whether to expand Medicaid under federal health reform, and now that the General Assembly has gone home, Democratic Gov. Steve Beshear can turn his attention to the many questions that linger. Some Republican legislators think he will expand the program, but they worry about the cost when the state would have to start helping cover the new expenses, beginning in 2017.

Republican Gov. Bill Haslam of Tennessee decided Wednesday that he will not pursue Medicaid expansion, saying that it could put hospitals in financial jeopardy by giving them more patients on which they lose money, reports Michelle Kaske of Bloomberg. If he is right and the same logic applies to Kentucky, Medicaid expansion in the state could harm the rural hospitals and providers -- some of whom are already squeezed by the issues with the new managed-care system.

Along with Kentucky, 10 other states are undecided about Medicaid expansion: Alaska, Indiana, Kansas, Nebraska, New York, Oregon, Utah, Virginia, West Virginia and Wyoming. The map by The Advisory Board Company shows the lay of the land; for an interactive picture that outlines the research behind the map, click here.

Red=Not participating; Pink=Leaning toward not participating;
Gray=Undecided; Blue=Participating; Light Blue=Leaning toward participating

Only three states with Democratic governors are undecided; 18 Republican governors have rejected expansion. Kentucky is shown as leaning for it because Beshear has repeatedly said that he will expand Medicaid if the state can afford it. He has also mentioned that the state can reserve the right to pull out of the deal in 2017, when it must paying 3 percent of the cost of covering the newly insured, reaching 10 percent in 2020. Still, the questions about cost and affordability remain, and Beshear could be considering another option.

Tennessee has joined Ohio and Arkansas in negotiating with the Obama administration over plans to use federal Medicaid money to purchase private insurance for those who can't afford it but don't qualify for Medicaid now. However, Haslam's plan has been held up because the administration placed too many conditions on the money, writes Kaske. Republicans in other states, including Florida, Louisiana, Pennsylvania and Texas, have expressed interest in this option since Gov. Mike Beebe of Arkansas, a Democrat, ignited the wildfire of creating a hybrid of the two alternatives, reports Robert Pear of The New York Times.

The idea of privatizing Medicaid expansion appeals to many doctors and hospitals because they typically receive higher payments from commercial insurance than from Medicaid. However, many Kentucky hospitals and providers are concerned about the managed-care program that is run by three private organizations, and are calling for immediate action. Beshear has not said whether he will sign or veto a bill that would subject the managed-care firms to the prompt-payments and dispute-resolution rules of the state Department of Insurance.

"Action is needed to address the problems that patients and hospitals are experiencing with Medicaid managed care and to make the system work properly," wrote Harold "Bud" Warman, chair of the Kentucky Hospital Association, and Charles Lovell, chair-elect of the association, in a recent Herald-Leader article that laid out the various problems with the system. "And with the possibility that Medicaid will be expanded in Kentucky to include an additional 350,000 people, it is critical that these issues be addressed right away to avoid even greater problems in the future."

Either using federal dollars to buy private insurance in order to cover newly qualified individuals (the hybrid plan) under the health law's expansion  or expanding in the "traditional" way will not change the current managed care structure of Medicaid in Kentucky. Yet, it would mean that 350,000 more Kentuckians would be covered under managed care; Medicaid would cover those earning up to 138 percent of the federal poverty level, currently up to $15,856 a year for an individual.

The money that the federal government offers for expansion is very tempting. The question then may be, how will it be used?

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Senate sends bill for prompt payment by managed-care firms to Beshear, who won't say whether he will sign or veto it

A bill aimed at resolving payment disputes between medical providers and Medicaid managed-care companies passed unanimously Monday in the Senate, and has been sent to Gov. Steve Beshear for his consideration.

House Bill 5, sponsored by House Speaker Greg Stumbo, D-Prestonsburg, would apply existing prompt-payment laws to managed-care firms and would set up an appeal process in the Department of Insurance to handle disputes between them and medical providers. Those claims are now handled by the Cabinet for Health and Family Services, which administers Medicaid and has had some problems with the bill.

Hospitals, doctors and other health-care providers have complained that the cabinet is not resolving their payment disputes with managed-care firms, putting many rural hospitals, clinics and health departments in serious financial binds.  Mental health centers have also reported cutting back services.

Asked last night what he would do with the bill, Beshear said the cabinet "has worked with the managed-care organizations and health-care providers to reduce problems during the change, and many concerns have been addressed.  However, I recognize that some issues persist.  I will review this bill carefully.”

Beshear has 10 days, excluding Sundays, to decide whether to veto the bill, sign it into law or allow it to become law without his signature. Stumbo said that if bill is vetoed it would likely be House Bill 1 in the 2014 session, reports Jessie Halladay of The Courier-Journal. The bill is a top priority for many health-care providers.

State Auditor Edelen says state must fix managed-care issues that have put rural hospitals and providers on brink of survival

State Auditor Adam Edelen said last week that shoring up the financial base for rural hospitals in Kentucky is the number one challenge to the state's Medicaid managed-care system.

The managed-care system has left rural hospitals at a tipping point that determines whether or not they will survive, which is deeply disconcerting when considering access to quality health care for Kentuckians in rural areas, Edelen said in a cn|2 "Pure Politics" interview. The state has a significant rural population, and "you can't overstate the importance of these rural hospitals," he said.

Hiring private companies to manage Medicaid has helped Kentucky slow cost increases in the $6 billion program, but the system has serious structural issues, and hospitals, doctors, dentists and other providers say the managed-care organizations (MCOs) are not paying them for treating Medicaid patients, Jacqueline Pitts of cn|2 reported.

There are many stories "about providers who have submitted claims and all of sudden, these MCOs change the rules, and so these claims are deemed unclear or improper and they are sent back," House Speaker Greg Stumbo said.

Edelen said the problem is that there is no consistent oversight in the claims process from the cabinet, and there is no opportunity for the provider to respond. "Right now we have our providers up against such a wall that the choice is to do one of two things," he said. "It's either to opt out of Medicaid, which is not something we want to do considering we have one of the largest percentage of population on Medicaid anywhere in the country, or go to the courts," which is inefficient and expensive.

“You have good people in the cabinet trying to manage it, you’ve got providers that are just trying to provide services to people, but we’ve got to have a better system of oversight and accountability because if that happen and we begin to lose hospitals in rural Kentucky then we have significantly reduced the level of quality of life for the people of Kentucky,” Edelen said.

Fixing the system for those hospitals and doctors is what is so important to the state as a whole, he said. He said the state and MCOs have had enough time to work out glitches with doctors and hospitals, and they must make some substantial changes before medical care for Kentucky’s neediest suffers any more.

Managed care, pension payments causing problems for community mental health centers; Edelen, C-J call for changes

"Kentucky mental health centers are cutting back services and struggling to assist patients the first time they’re admitted because of ongoing struggles with Medicaid managed care," Don Weber reports for cn|2. "At the same time, they’re losing out on federal grants because of red flags caused by their administration costs being inflated by increasing contributions to the public pension system."

NorthKey Community Care Mental Health Center in Northern Kentucky, which serves eight counties, had to close its adult day-treatment programs for the seriously mentally ill. Dr. Owen Nichols, the president and CEO, told Weber, “I get calls periodically from elderly parents in the community wanting help with their adult child that suffers from schizophrenia because they’re now wandering the streets, having some difficulties with local authorities.”

A recent editorial in The Courier-Journal addresses Kentucky's need for better mental health treatment, saying that Kentucky has "an underfunded, fragmented and now —thanks mostly to Medicaid managed care —hopelessly complicated system of mental health care."

The editorial notes last week's C-J articles in which reporters Laura Ungar and Chris Kenning uncovered the problems families face when navigating a fragmented mental-health system while trying to provide appropriate treatment for a loved one suffering form a severe mental illness, in addition to the "F" grade Kentucky received for its poor mental-health funding.

The editorial also describes how structural issues with managed care, which began in November 2011, have complicated the state's mental-health system. It notes the community mental-health centers asked to be left out of managed care, "pointing out they already operate efficiently and amount to only about 3 percent of the state’s $6 billion a year Medicaid program."

In addition, the editorial notes, "State Auditor Adam Edelen recommended the Cabinet for Health and Family Services take mental health out of managed care and let the state resume running it." Against his advice and the requests of community mental-health centers, the state expanded managed care of mental health. Now some haven’t been paid for Medicaid services since January, when managed care took effect, the editorial says.

"The nightmare needs to end for the many Kentuckians who need basic mental health services," says the editorial. "It’s time for the state to fully explore this system and, if folks are serious about improving it, fix the problems and find the money to fund it." (Read more)

Legislature eases physician assistant rules; nurse practitioners' prescription power, Medicaid prompt-payment bills, others linger

By Molly Burchett and Al Cross
Kentucky Health News

The Kentucky General Assembly has joined other states in easing the restrictions on physician assistants’ medical practice, but has held up a similar move for advanced registered nurse practitioners. Both issues relate to the shortage of medical practitioners in many Kentucky counties, and the quality of medical care.

The Senate added the physician assistant language of Senate Bill 43 to House Bill 104, an art-therapy bill, in order to preserve an agreement between the Kentucky Medical Association and the Kentucky Academy of Physician Assistants. It will repeal the law that bans PAs from practicing for their first 18 months unless a physician is on site; one will still have to be available by telephone. The amended bill has been sent to Gov. Steve Beshear for his signature or veto.

The amendment was used because the House had tacked onto SB 43 an amendment from advance practice registered nurses that would have repealed the need for them to have a collaborative agreement with a physicians to prescribe non-narcotic drugs. The KMA opposes that idea.

"It's looking like the doctors win," said Sen. Julie Denton, R-Louisville, who favors the repeal. "I'm not hopeful" it can pass, she said, but added that some physicians also favor it: "With Obamacare coming in, we're going to need all the front-line physicians we can get." Leading opponents of the measure, Republicans Katie Stine of Fort Thomas and Carroll Gibson of Leitchfield, didn't return a call seeking comment.

Nurse practitioners say that SB 43 is necessary to allow them to fill health-care gaps in rural Kentucky and address the state's shortage of primary-care providers. The Kentucky Coalition of Nurse Practitioners and Nurse Midwives says in an article prepared for Kentucky newspapers that NPs have never been required to practice under physician supervision and 17 states allow full prescribing authority for non-scheduled medications.

The Medicaid prompt-payment bill, HB 5, went to a conference committee after the House refused to go along with Senate changes, and may be considered when the legislature returns later this month, ostensibly to consider any bills Beshear vetoes. The bill would apply prompt-payment laws to managed-care organizations and would move Medicaid late-payment complaints to the insurance department; those are now handled by the Cabinet for Health and Family Services, which administers Medicaid.

In the final crunch to pass legislation before the veto recess, lawmakers attached seven health care-related bills to HB 366, which had focused on identifying congenital heart disease in newborns. It had 10 additional measures "hung on it like a Christmas tree before the free conference committee of House and Senate members," reports Ryan Alessi of cn|2's "Pure Politics."

The bills still hanging on the measure, dubbed the "healthy Christmas tree," are:

• HB 187, addressing a free prescription-drug program for under-insured Kentuckians.
• HB 79, which would exempt licensed health care providers from being disciplined for prescribing naloxone in the event of an overdose.
• HB 387, which aims to provide nutritional supplements for low-birth-weight newborns.
• SB 201, which addresses licensed diabetes educators.
• SB 38, to require Medicaid to accept provider credentialing by a Medicaid managed-care organization.
• SB 108, relating to managed-care contracts with the IMPACT Plus program, a behavioral health program for children.

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

House sends Senate pill-mill and Medicaid managed-care fixes

The state House yesterday approved without dissent two bills aimed at improving Kentucky's health care.

House Bill 217 addresses some "unintended consequences" of last year's "pill mill bill" by easing some of the bills regualtions. The bill also tightens restricitions on prescription drugs, reports Ryan Alessi of cn|2.

The other measure, House Bill 5, deals with payment problems of the Medicaid managed care system. Itl would apply the prompt-payment laws to managed-care organizations and would move Medicaid late-payment complaints and disputes to the insurance department; those are now handled by the Cabinet for Health and Family Services, which administers Medicaid.

Both bills are expected to see action in the Senate.

Bill to make Medicaid managed-care firms pay up, and more promptly, nears final form in House and will get attention in Senate

By Molly Burchett and Al Cross
Kentucky Health News

The complaints by many health-care providers about Medicare managed-care firms' delay or denial of payment claims appears to be generating a bipartisan solution in the General Assembly. A bill on the House floor that would transfer late-payment complaints to the state Department of Insurance, which enforces Kentucky's prompt-payment laws, appears to have support in the Senate.

House Bill 5 would apply the prompt-payment laws to managed-care organizations and would move Medicaid late-payment complaints to the insurance department; those are now handled by the Cabinet for Health and Family Services, which administers Medicaid.

Hospitals, doctors and other health care providers have complained that the cabinet is not resolving their payment disputes with managed-care firms. The bill cleared the House Health and Welfare Committee Feb. 21 and is awaiting a vote on the House floor. The bill is sponsored by House Speaker Greg Stumbo.

Sen. Julie Denton, chair of the Senate Health and Welfare Committee, told Kenny Colston of Kentucky Public Radio that she plans to give the bill a hearing and supports its intent to make managed care organizations pay providers. "I think anything we can do to have more oversight and more assistance in keeping them in compliance with their contracts is a welcome breath of fresh air," she said.

Senate President Robert Stivers said he has concerns about the bill affecting the MCOs contracts with the state. But he said his chamber will take a look at the bill, Colston reports. The cabinet has had the same concerns, and some other objections that are to be addressed by House floor amendments.

Kentucky providers report being burdened by a lack of or delayed payments from the new managed-care system. Kentuckians have called for immediate action by state government to help fix these issues on behalf of providers and patients, which has prompted this bipartisan legislative response.

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Herald-Leader says state running out of time to fix Medicaid managed care, with decision on expansion looming

A recent editorial in the Lexington Herald-Leader called for swift legislative action to fix the problems of Medicaid managed care. Timely action is even more necessary since the state is considering expanding the program, some critics have said.

Fifteen months ago the administration of Gov. Steve Beshear made a quick transition to managed care that privatized Medicaid for 550,000 poor, elderly and disabled people and was projected to save Kentucky $375 million in three years.  If the state expands Medicaid, that number of covered individuals could grow to more than 1 million — or roughly a quarter of all Kentuckians.

Although Medicaid is encouraging preventive care, such as more well-child visits and diabetes testing, providers haven't been paid for some of their services. The state recently granted the managed care companies a seven percent rate increase, and the companies have said they're losing money here and one is pulling out in July. But at the end of the first eight months of managed care Medicaid, the state had paid $500 million more to the companies than the companies had paid to providers.

"The delay and denial of payments are creating financial crises for providers and pharmacies and forcing small hospitals to lay off employees, deplete reserves and default on bonds," the editorial said. "This is creating a massive transfer of wealth from Kentucky medical practices and hospitals to for-profit companies based in other states. . . . For patients, the companies are putting up barriers to care that would be illegal in the private sector. The new burdens that have been placed on vulnerable Kentuckians and their medical providers threaten to unravel not just the safety net but, in some places, the whole health care system."

The editorial called on the General Assembly to pass legislation to curb abuses such as "the stiffing of hospitals that provide emergency care as required by federal law. . . . House Bill 299 and Senate Bill 178 would also curb the false economy of severely limiting in-patient mental-health care for children while referring them to nonexistent out-patient care."

The legislation would also require Medicaid managed care companies to:

• Meet the same provider network standards, including distance to hospitals and obstetrical care, as other insurers operating under Kentucky law.
• Decide claims based on nationally recognized clinical standards and provide specific reasons for denials so providers would know what's allowable.
• Participate in an appeals process for denied claims.

Appalachian Regional Healthcare wants to sue the U.S. Department of Health and Human Services and others, alleging that the new system is out of compliance with federal law.

"The feds shouldn't have to be dragged in," the editorial says. "The federal government covers roughly 70 percent of Kentucky’s $6 billion Medicaid program. Expanding Medicaid to include more low-income people is a linchpin of federal health care reform," and Beshear has said that he wants to expand Medicaid if the state can afford it. "Kentucky can't wait much longer to get Medicaid right." (Read more)

School nurses start getting scarcer, due to Medicaid problems

By Molly Burchett
Kentucky Health News

Students in many Kentucky counties will find it harder to see a school nurse due to changes in the state Medicaid program and lack of payment from managed-care companies.

Takirah Sleet, 7, and school nurse Michelle Marra looked at Takirah's
lunch tray to calculate her insulin dosage at Lansdowne Elementary
in Lexington. (Lexington Herald-Leader photo by Pablo Alcala)

In Crittenden County schools, budget woes have forced the Pennyrile District Health Department to request additional money from the school district to keep its school health clinics fully-staffed and open, reports Jason Travis of The Crittenden Press. Allison Beshear, director of the health department, told Travis one reason from the budget crunch is a lack of payment from Kentucky Spirit, which owes the health department $266,000.

Without additional money from the school district, Beshear says, the health department cannot maintain the current level of service at school clinics through the end of the school year.  Proposals have been made to offer services to the district that entail reducing clerical staff without reducing the number of nurses; but in order to do so, trained school staff would have to handle daily medication distribution and help to answer the phones for the clinic.

"Kentucky Spirit has filed two appeals with the Cabinet of Health Services and the Finance Cabinet in which it claims to not be financially responsible for healthcare given in school clinics," reports Drew Adams of WKMS-FM in Murray reports in a story about similar problems in Hopkins County.

Other school districts facing similar problems include those of Bell, Clark and Pike counties. Eleven school health clinics in Bell County could be shut down by the end of this school year, reports WBIR-TV of Knoxville. In Clark County, a lawsuit between the state and Kentucky Spirit has put a halt to reimbursement for health services provided in county schools, reports Rachel Gilliam of The Winchester Sun.

Last month, the Pike County Board of Health filed a lawsuit against Kentucky Spirit because the managed-care firm has stopped reimbursing the Board of Health for school-nurse programs, reports Jordan Vilines of WYMT-TV in Hazard. The money has to be reimbursed in order to provide school nurses.

“I think having someone in the school to ensure that our children are healthy is imperative for the quality of life of our kids, especially in a very rural area," Pike Judge-Executive Wayne T. Rutherford told Vilines.  He said that without reimbursement, school nurses could lose their jobs, which would leave hundreds of kids without immediate medical care.

Kentucky Health News is an independent service of the Institute for Rural Journalism and Community Issues at the University of Kentucky, with support from the Foundation for a Health Kentucky.

Among health providers having difficulty with Medicaid managed care, Cumberland Valley District Health Department stands out

The financial struggle that recently led to 14 layoffs and an increase in furlough days for the Cumberland Valley District Health Department continues. Other health departments have reported such difficulties, but it may be one of those hurt most.

With its deficit standing at $503,266,  a review of the department’s financial summary from the latter half of last year shows that a large part of the deficit is caused by lack of payments from Kentucky Spirit, a Medicaid managed-care company, according to an article in the Manchester Enterprise.

As recently as September, Kentucky Spirit owed the department over $300,000 for Medicaid services that had been provided. In the December report, Kentucky Spirit had only paid $698 and has since quit cooperating with the state, according to the Enterprise.

Adding to the cash flow problem, another managed-care firm pays a month late, according to department Interim Director Lynett Renner. She said that since 2011, health departments must also pay back to the state a Medicaid match, and are the only health care providers that must do so. 

Those factors, she said, are why the layoffs plus an increase in furlough days are necessary. Beginning Jan. 21, employees will be on a 32-hour workweek. In addition to those two money-saving actions, the department has also eliminated two positions, director of nursing and director of environmental services, the Enterprise reports. 

"What we do touches the lives of everyone in our country,” said Renner and the district will provide its services however it can.

Danville newspaper examines problems hospitals and doctors have with state's managed-care Medicaid program

All the talk about "Obamacare" may have obscured Kentucky's biggest health-care story, Kendra Peek of The Advocate-Messenger in Danville suggests, in a look at Kentucky's troublesome shift to managed-care Medicaid. "It's the biggest story in the state that's not being told," said Vicki Darnell, president and CEO of Ephraim McDowell Regional Medical Center in Danville, told Peek. Her story is an example of how a smaller newspaper can show the impact of a statwwide policy. (A-M photo)

On Nov. 1, 2011, Medicaid in Kentucky switched to a managed care program, which essentially means management of Medicaid was outsourced to private insurance companies Peek reports. There are three managed care organizations (MCOs) statewide: Coventry Cares of Kentucky, Kentucky Spirit and WellCare of Kentucky.

The time for payments to doctors and hospitals has doubled since MCOs were implemented, McDowell Chief Financial Officer Bill Snapp told Peek. Before, they were getting paid for Medicaid patients' care within 17 to 20 days. Immediately after the switch, he said, it took as long as 70 days. Some private physicians have been forced to make hard financial decisions because of delays, and because MCOs reimburse doctors at "significantly lower rates than private insurers," Peek reports. Some hospitals, physicians and health departments have had to lay off employees, and some doctors are refusing to see Medicaid patients because they can't afford to.

In some cases, patients have had to find doctors or hospitals where the MCO they selected would be accepted, Peek reports. Hospitals cannot legally deny treatment to anyone based on insurance, but having to find hospitals or physicians that accept particular MCOs can become expensive out-of-pocket for patients. Some primary physicians may not be allowed to work at certain facilities, requiring their patients to be shifted to another doctor.

MCOs have been in the news for these issues. Coventry Cares canceled contracts with Appalachian Regional Healthcare, a network of hospitals in Eastern Kentucky, in a move that drew significant backlash. Kentucky Spirit has announced it would end its managed-care contract in July, saying it has concerns about the sustainability of the plan. (Read more)

Group of 550 doctors in Central Ky. leaving Medicaid's Coventry

A Lexington-area network of doctors says it will no longer contract with Coventry Cares, a Medicaid managed-care company, after Coventry said "it would begin to pay less than the established Medicaid rate in reimbursements — as much as 10 percent less for care from specialists," Cheryl Truman reports for the Lexington Herald-Leader.

The Physicians' Network is a group of 550 independent physicians, headed by Dr. Ralph Alvarado of Winchester. He said the cuts will mean that some doctors will be paying to treat Medicaid patients.

d more here: http://www.kentucky.com/2012/12/20/2450679/central-kentucky-doctors-cut-ties.html#storylink=cpy

Coventry issued a statement saying, "This decision would not take effect until March 7, and we do not expect any network access issues for our members. That said, Coventry would like our members to continue enjoying access to this group of providers. We remain committed to continuing negotiations . . . " (Read more)

Managed-care doctor creates process to steer pregnant Medicaid recipients who are using dangerous drugs into treatment

When Dr. Jeremy Corbett of Lexington found that "nearly one in five pregnant women enrolled in the Medicaid managed-care program where he works were using narcotics or other harmful drugs," he tackled the problem. As medical director of the Kentucky Spirit Health Plan, "He designed a new program combining high-tech health information with case management to tackle the problem of addicted babies, which is exploding statewide," reports Laura Ungar of The Courier-Journal. (C-J photo by Tim Webb)

Ungar describes how Corbett's program works: "Employees examine patient records for pregnant Kentucky Spirit members. The pharmacy department uses an analytics report, coupled with the Kentucky All Schedule Prescription Electronic Reporting System, or KASPER, to cross-check for drugs that could be dangerous during pregnancy, including narcotics. Department employees also look at the pattern of prescriptions, which could point toward doctor-shopping for pills. . . . Kentucky Spirit sends letters to the prescribing doctor and the obstetrician the woman is seeing, letting them know she is pregnant and has received a prescription for dangerous drugs. Corbett said sometimes the prescribing doctor doesn’t know the woman is pregnant, and the obstetrician doesn’t know she’s taking narcotics. Corbett said they also send letters outlining the dangers of taking certain drugs during pregnancy, and case managers reach out to women at risk of giving birth to addicted babies."

The program started three weeks ago. Corbett said two women have asked to get substance-abuse treatment, for which Kentucky Spirit pays — "even residential treatment, which is not required by Kentucky law — because it saves money in the long run," Ungar reports. "Kentucky has seen its hospitalizations for addicted newborns climb from 29 in 2000 to 730 last year — a 2,400 percent increase that far outpaces the national increase." Corbett told her, “When these babies wind up in the neonatal intensive care unit, it’s a huge loss, emotionally, and it’s also a huge loss of state dollars.” (Read more)

Republican legislators keep hammering state officials and managed-care companies about Medicaid payment delays

Republican lawmakers reitarated this week that the companies managing Medcaid in Kentucky are still not paying health providers promptly. According to Sen. Joe Bowen, R-Owensboro, in the year since the state moved more than a half a million people to managed care, the amount owed to hospitals has doubled, Beth Musgrave of the Lexington Herald-Leader reports. The state switched to managed care to reduce costs in the federal-state program that pays health care costs for the poor and disabled.

According to state Medicaid Commissioner Lawrence Kissner, WellCare and Kentucky Spirit have been cited by the state Department of Insurance for failing to meet their obligation to the state and the hospitals. A third managed care company, Coventry, has not been cited. The two companies, notes Musgrave, have submitted plans of correction to the insurance department.

None of the companies testified at Tuesday's meeting of the Interim Joint Committee on Health and Welfare where Bowen and other Republicans voiced their complaints. Despite the payment problems, Kisser said the move to managed care has helped stem rising costs. As of October, he said, Medicaid was $40 million under budget. (Read more)

Haynes: Medicaid case managers threatened, and more bumps ahead, but state beginning to see advantages of new system

By Al Cross
Kentucky Health News

Some Medicaid case managers' lives have been threatened because they have tried to get Medicaid patients to go to primary-care doctors instead of emergency rooms, Health and Family Services Secretary Audrey Haynes said today.

Haynes, right, and two key legislators talked about managed care, the possible expansion of Medicaid under federal health-care reform, and the insurance exchange being set up under the law, at the Kentucky Chamber of Commerce's annual policy conference in Lexington.

The case managers work for insurance companies that oversee Medicaid under contracts with the state. Haynes said the cases of threats have been reported to police.

One key to making managed care work is more prevention, Haynes said, but "People want to go to the emergency room." She mentioned one case of a Medicaid recipient who had gone to emergency rooms 57 times in 30 days.  Under federal law, hospital emergency rooms generally cannot refuse to treat patients who present themselves.

"They will abuse the emergency room because that is the system they know," said Republican Sen. Tom Buford of Nicholasville, chairman of the Senate Banking and Insurance Committee.

Haynes said, "Our people are getting sicker, especially folks on Medicaid, and we can't allow people to use high-intensity . . . high-cost services."

Haynes, an appointee of Democratic Gov. Steve Beshear, and her cabinet have come under fire for not putting more pressure on managed-care companies to make timely payments to hospitals, doctors and other providers. She was not asked about that, but alluded to it: "There have been lots of bumps in the road, and some of them may continue."

But she said the state is only beginning to see what can be gained from the new system, which is supposed to save hundreds of millions of dollars. "We were one of the last states to look at managed care," she noted.

Buford said "I don't disagree with anything she has said," but said the Beshear administration rushed into managed care. "I don't think there's much we can do. We are in this lady's hands on this issue and we'd better support her."

Buford predicted that Beshear would try to expand the Medicaid program to households earning up to 138 percent of the poverty level, a key part of the federal reforms but one the Supreme Court said must be optional for states, not mandatory.

"It will be difficult for him to say no to the expansion of the Medicaid rolls," which the federal government would entirely cover in the first two years, Buford said. That would be reduced to 90 percent by 2020, but Buford predicted that the federal government will ask the states ot accept less because it won't have the money.

Haynes said Beshear would like to expand Medicaid, and a "deep-dive economic analysis" is being done now, with the help of the federal Department for Health and Human Services, to establish the financial parameters. "We probably won't know for several months because we're still getting a lot of guidance from HHS," she said.

Haynes said expanding Medcaid would bring $10 billion to $12 billion to the state, having a significant economic impact, and the managed-care companies came to the state expecting the expansion.

She said HHS is calling the state's effort to set up the insurance exchange, a marketplace for health coverage, a model for other states.

However, Buford said the Senate, which has 24 Republicans and 14 Democrats, in a state that voted against President Obama by a similar margin, will probably allow Beshear to re-issue the excutive order creating the exchange rather than adopting it into law. "That would be impossible to make it through the state Senate in the next two years," he said.

Buford said he favors a federal exchange as "the best bang for your buck on premium costs," but said the state is too far into its own exchange to do that now. However, when the grant funds being used to create it run out, "I don't know what this exchange will be," he said, indicating that the legislature would not authorize the fees on insurance companies that the exchange plans to levy to finance its operations.

Buford made many criticisms of the reform law, but Rep. Susan Westrom, chair of the House Health and Welfare Committee, asked, "If this is such a horrible thing," how would it be passed by Congress and "upheld by the Supreme Court?"

Franklin County health department lays off 5; blames Medicaid managed health claim denials for budget shortfalls

The Franklin County Health Department has laid off five employees effective today, four of those are part-time workers. The layoffs are being made in the midst of a $1.7 million drop in revenue from last year. The staff reductions should save the agency $120,000 annually, health department director Paula Alexander told The State Journal. The news comes only two weeks after the Madison County Health Department announced it has been forced to lay off seven workers because of budget shortfalls. Those cuts affected home-health workers in Madison, Estill and Powell counties.

In both instances, department directors have explained that they had expected to receive reimbursements from Kentucky's three Medicaid managed care organizations. A massive increase in those denied claims were reasons both directors gave for their sudden inability to meet budget goals. Earlier in the year, the Fayette County Health Department lost 25 employees. Faced with similar Medicaid payment issues, several Kentucky counties have tried to cut costs by cutting to a four-day workweek.

Passport Health claims state violated bidding process and will make Medicaid overpayments in Jefferson County as a result

Passport Health Plan has charged that the state of Kentucky has violated its own bidding process and will spend as much as $80 million more than necessary per year under its new Medicaid managed-care contracts for the Jefferson County region. Tom Loftus of The Courier-Journal reports that the formal letter of protest of the bidding process was filed Thursday. It is the company's response to the recent division of the services of Jefferson County's 170,000 Medicaid recipients to four Medicaid managed-care companies that were once served only by Passport. Loftus writes that Passport is questioning how the region's recipients have been reapportioned. The company says it anticipated a 41 percent share of the region's Medicaid business, but was notified Wednesday that it initially will be assigned only 27 percent. The Cabinet for Health and Family Services released a statement explained that all bidders were aware of the conditions of the contract during negotiations. (Read more)

Medicaid managed-care firm files suit, alleging the state's rush job resulted in unreliable financial information for bidders

Medicaid managed-care company Kentucky Spirit alleges in a lawsuit filed Monday that Gov. Steve Beshear so hurriedly privatized the service last year that he gave incorrect cost information to the bidders. The company said it relied on the bad information and thus has lost $120 million since its work began a year ago.

John Cheves of the Lexington Herald-Leader reports that Kentucky Spirit had hoped that it could let its contract terminate a year earlier than scheduled without paying the damages that Health and Family Services Secretary Audrey Haynes has now said the state will pursue. Cheves writes that Kentucky Spirit says they relied on a "data book" -- what managed-care companies used to estimate costs in their bids -- prepared by the accounting firm PricewaterhouseCoopers. (Read more)

Four companies will oversee Medicaid coverage in 16-county Louisville region that includes 175,000 Kentuckians

Beginning Jan. 1, four companies will share management of the health care of roughly 175,000 Medicaid patients in the Jefferson County region. This reflects a major, federally mandated change that some say raises concerns about disrupting care. The nonprofit Passport Health Plan has served all Medicaid recipients in the 16-county region for 15 years. On Thursday, the state Cabinet for Health and Family Services said it had signed 18-month contracts with Passport and three other companies -- Humana, Wellcare of Kentucky and Coventry Cares -- to manage Medicaid recipients’ care starting next year. Other details of the contracts were not released.

The federal government has made it clear that the state it could no longer operate with a single managed-care company in the region and that it must give patients a choice among several providers. In addition to Jefferson, the region’s other counties are Breckinridge, Bullitt, Carroll, Grayson, Hardin, Henry, LaRue, Marion, Meade, Nelson, Oldham, Shelby, Spencer, Trimble and Washington.

According to The Courier-Journal's Tom Loftus, "Passport had hoped that, if the state went with multiple companies, it initially would assign all recipients to it and then give them an option of moving to another company. Instead, the cabinet initially will assign recipients to one of the four companies. The cabinet said the state will use 'a high-tech matching system' that assigns a person based on 'available provider networks and any special health care needs.' (Read more)

Andrea Bennett, deputy director of Kentucky Youth Advocates, said the new system raises concerns for child advocates. "While we still have threads of hope, we cannot ignore the ongoing Medicaid managed care issues that have occurred throughout the rest of the state over the past year.  . . . We’ve heard providers threaten to give up on Medicaid altogether because they are frustrated and still not receiving proper payment. We’ve seen lawsuits and fights between the state, the managed care companies, and the providers. And we still haven’t seen hard data showing how managed care is improving quality and access to care for children in the Commonwealth."