Kentucky Medicaid

Kentucky Senator Julie Denton says the state’s largest private Medicaid company is underpaying and threatening healthcare providers, and she says lawmakers may kick the company out of the state Medicaid system if the behavior persists.

CoventryCares is one of three new private Medicaid Managed Care Organizations (MCOs) that began business in the commonwealth last year. But problems with the privatized system popped up quickly. They began in Eastern Kentucky. Hospital chain Appalachian Regional Healthcare sued Coventry for making inadequate and late payments to hospitals for care that should be covered by Medicaid. Coventry officials say they’re operating within the new state rules for private Medicaid operators. The two sides are in contract talks now, but the problems have spread. This week Coventry told Baptist Health Systems in central and western Kentucky that it will stop payments immediately after their current contract expires in September unless a new deal is worked out in advance. 

Coventry and the other new MCOs, Kentucky Spirit and WellCare, are losing money. Denton, who is chairwoman of the Senate Health and Welfare committee, says that’s because they received bad information from the state Cabinet for Health and Family services when they signed contracts last year. That misdirection has led Coventry to hard bargaining in contract talks. But as talks continue, Denton says costs are being passed on to patients and providers.

“It is ridiculous for Coventry to think that they can go to Appalachian Regional Healthcare and Baptist Health Systems and basically hold them over a barrel saying you’re going to take what we give you or we’re not going to play in your sandbox,” she says.

Denton says Coventry took a risk by joining Kentucky’s rushed system and the company should find other ways to make profits or risk being kicked out of the system.

“Something’s got to be worked out and if Coventry can’t work it out, I would anticipate the legislature would move, if the Cabinet does not move, to eliminate Coventry from participating in Medicaid in Kentucky,” she says.

Lawmakers were hesitant to act to correct any problems during this year’s session because they wanted to give the system time to work. But Denton says things are not getting better.

Governor Steve Beshear proposed the managed care system as a way to shore up the Medicaid budget, which is normally one of the state’s heaviest financial burdens. Despite the problems, Beshear says the system will eventually work.

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