Healthcare Provider Sues Medicaid Care Operators

by Devin Katayama on April 20, 2012

The main healthcare provider for eastern Kentucky, Appalachian Regional Healthcare, has filed suit against two of the state’s four Medicaid managed care operators.

In complaints filed this week, Appalachian Regional Healthcare alleges Coventry Health and Kentucky Spirit Health Plan owe the provider over $17 million in back payments.

Kentucky privatized Medicaid statewide last November to reduce costs and provide better patient care. Since then, the three new managed care operators have been criticized for not making timely or appropriate payments. Passport has operated in the Louisville region for a number of years and are not part of the criticism.

Appalachian Regional Healthcare alleges over 5,000 claims are pending reimbursement and the Cabinet for Health and Family services is not providing adequate oversight.

The following is an excerpt of an email sent to WFPL from Appalachian Regional Healthcare officials:

“Many of the claims in ARH’s Complaints concern problems raised in a report released by Adam Edelen, State Auditor of Public Accounts, on February 29, 2012. Among other problems the State Auditor found that “[t]he three MCOs are sitting on more than a quarter of a billion tax payor dollars while small town doctors, hospitals and other healthcare providers have had to open or extend lines of credit to keep their doors open.” Those problems, which have plagued the State’s Medicaid managed care program since its start on November 1, 2011, have remained uncorrected and are at the heart of two lawsuits filed by ARH.”

Officials for Coventry dismiss the allegations. In an email to WFPL, spokesman Matthew D. Eyles writes the following:

“It’s unfortunate that ARH felt the need to sue because there are no merits to the claims against Coventry. Instead of wasting time and money on lawyers, we’d rather work together with ARH on getting the Commonwealth to address the ongoing problem of inadequate Medicaid payments and improving the health of our members. Litigation doesn’t solve ARH’s problems, and we urge them to reconsider. But if ARH moves forward with the suit, Coventry will vigorously defend itself.”

In a follow up email, Eyles writes, “Coventry disputes the allegations regarding both the dollar amount and the percentage of claims that have not been paid. In the very limited instances where ARH’s claims are older than 30 days, Coventry pays those claims with interest, as required under Kentucky law.”

The Cabinet for Health and Family Services was unable to respond at the time of publication. This story was updated per Cabinet’s response:

“Since managed care was implemented on Nov. 1, the Cabinet has worked closely with all three MCOs and providers to resolve these and other similar issues. The Cabinet continues to hold regular meetings with all interested parties and has seen significant improvement in claims payments, processing and other issues as a result.”

Click here to see the suit filed against Kentucky Spirit.

Click here to see the suit filed against Coventry Cares.

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