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“Bonuses” vs. “Compensation”: $4.8 Million in Medicaid Funds at UofL Med School in Dispute

State Senator Tim Shaughnessy raised allegations last week that the University of Louisville School of Medicine misused $4.8 million in Medicaid funds. He says the money was used to give bonuses to school doctors. The Attorney General’s office says it was simply “physician compensation,” but Shaughnessy says the term “bonuses” was used, and that the money was not paid out as part of doctors’ regular salaries. He’s calling for continued investigation and oversight. Deborah Yetter covered the story for the Courier-Journal, and she joined us Friday on State of the News to fill us in on the disputed funds.

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Privatized Medicaid Will Begin in November

Kentucky Medicaid recipients preparing to switch to one of three private providers will have to wait another month to see the effects of the new privatized system.

Earlier this year the state signed contracts with CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky and then automatically enrolled Medicaid members with one of these providers. The managed-care approach to Medicaid is part of Gov. Steve Beshear’s budget-balancing plan and privatizing Medicaid will save the state $1.3 billion over the three-year contracts, said officials.

But not everyone is ready. Over the past couple months the Kentucky Hospital Association has voiced its concern for implementing a managed care system in such a short time. Hospitals are complex systems and some need more time to weigh the effects of signing on with any of the three Managed Care Organizations, said Neville Wise, acting Medicaid Services commissioner.

“They (KHA) expressed the need to review their contract and contract terms from the MCOs more thoroughly,” he said.

Kentucky’s Health and Family Services Cabinet has now extended the start date to switch to privatized care to Nov. 1. It was previously Oct. 1. Some hospitals still have to figure out who in their system will be on board with new rates under privatized care, said Wise.

“They’re very complex organizations and, as you can probably imagine, the contract terms between the MCO and an organization with that many mutli-specialties would take a little longer to review some of the terms and conditions,” he said.

HealthPoint Family Care is located in Covington and it has signed on with all three private Medicaid providers, said CEO Chris Goddard. Some of its patients have called and are concerned that they might not be covered if hospitals don’t sign up with all three private providers, he said.

The extra month should give the providers and hospitals more time to organize their networks, said Goddard.

Medicaid members are able to change providers until Oct. 5; and then again 90 days after the system is privatized.

Jefferson County and 15 surrounding counties will continue to be in contract with Passport Healthcare for another year.

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Local News Politics

Indiana AG Appeals Planned Parenthood Ruling, Organization Looks to Kansas Case for Encouragement

The Indiana Attorney General’s office has filed its brief in the defense of a state law that defunds Planned Parenthood.

The law passed the General Assembly this year and blocks Medicaid funding from any organization that provides abortions. Planned Parenthood of Indiana and the American Civil Liberties Union have challenged the law, and won a temporary injunction in June.

Further, the federal government has rejected Indiana’s attempt to move state Medicaid rules in line with the law. In the brief, Attorney General Greg Zoeller argues that the state’s feud with the federal government should take precedent over any court challenges.

“This dispute belongs between the state and the federal government that administers and funds the Medicaid program, not between a private contractor and the state,” said Zoeller in a statement. “The proper place to argue this dispute is the federal government’s own administrative hearing process, established for exactly this purpose. We hope the 7th Circuit will agree, reverse the U.S. District Court’s decision and allow the administrative review to run its course.”

But Planned Parenthood of Indiana President Betty Cockrum says that’s too abstract.

“The one thing it overlooks is that the defunding in particular had a very significant and adverse effect on Planned Parenthood of Indiana and his argument entirely forecloses any action on our part to seek relief for that,” she says.

Before the injunction was issued, Planned Parenthood planned layoffs, furloughs and office closures to make up for loss of Medicaid funds. The organization serves about 9,300 Medicaid patients in Indiana.

The appeal takes the case to the Circuit Court of Appeals in Chicago. A Kansas judge recently ruled in Planned Parenthood’s favor in a similar case.

“Same arguments, same response. There are nuances and differences and all that but it’s one more favorable review,” says Cockrum, adding that the Kansas ruling gives her confidence in another legal victory for her organization.

The appeal will be heard in the U.S. 7th Circuit Court of Appeals in Chicago.

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Local News Politics

Indiana Attorney General Appealing Latest Ruling in Planned Parenthood Case

Officials with Planned Parenthood of Indiana say they are not surprised that the state attorney general is appealing a recent court ruling in favor of the group.

After a law blocking state funding from any organization that provides abortions took effect, Planned Parenthood filed suit. Late last week, a judge issued a temporary block on the law until the case is settled.

Attorney General Greg Zoeller’s office has appealed the ruling. The state is also appealing a federal decision that blocked Indiana’s attempt to change Medicaid rules and bring them in line with the new law. The cases will likely both be heard by the appeals court. A loss to Planned Parenthood would mean the law could not be enforced. A loss to the federal government would mean the state’s roughly $4 billion Medicaid allotment would be cut off.

The federal government and Planned Parenthood both argue that the state government cannot restrict Medicaid patients’ access to care. Zoeller’s office contends that the law–as it was passed by the state legislature–is sound. Further, the office contends that the federal dispute should take priority over Planned Parenthood’s case.

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Local News Politics

Planned Parenthood to Make Cuts as Donations Run Out

The donations have run out for Planned Parenthood of Indiana, and layoffs, furloughs and service cuts are forthcoming.

Planned Parenthood has been using donations to pay for services to its 9,300 Medicaid patients since May, when Governor Mitch Daniels signed a law stripping the agency of its $1.4 million in public funding.

But the donations have run out and a hoped-for ruling in a legal challenge to the law hasn’t arrived. Organization officials say that leaves them with no choice but to begin cutting staff and services.

No services will be provided to Medicaid patients unless they can pay out of pocket. Two specialists at the Muncie branch will be laid off. And most employees will be furloughed without pay later this week.

The U.S. Justice Department has taken Planned Parenthood’s side in the challenge to the law, and a ruling is due by July 1st. A spokeswoman says if the judge’s ruling isn’t favorable, more layoffs and office closures will likely be necessary.

Attorney General Greg Zoeller says the law is fair and his office will continue to defend it. The state is appealing to change its rules for receiving Medicaid funding to accommodate the new law.

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Local News Politics

Planned Parenthood of Indiana Returns to Court Monday

Planned Parenthood of Indiana’s fight against an anti-abortion law continues in court tomorrow.

The organization is seeking to have a law that strips public funding from Planned Parenthood and any other organizations that provide access to abortion. Planned Parenthood argues that the state cannot restrict Medicaid patients’ choice of providers. Further, federal money cannot be used on abortions. If a Medicaid patient wants an abortion, that patient must pay for it out of pocket. Through donations, Planned Parenthood will continue seeing current Medicaid patients through the 15th.

A previous attempt to have the law blocked was rejected, but a ruling on tomorrow’s hearing is expected by next month.

Planned Parenthood isn’t the only party challenging the law. The White House and Centers for Medicare and Medicaid services say Indiana is in violation of Medicaid rules and as such, could lose its $4 billion in Medicaid funding.

Indiana Attorney General Greg Zoeller’s office is reviewing the challenges, but issued a statement saying its lawyers will continue to defend the law.

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Local News Politics

White House Says Indiana Law Could Cost the State Medicaid Funding

A recent law in Indiana that blocked government funding to Planned Parenthood could backfire.

The bill is aimed at blocking abortion, and it stops any Medicaid funding from going to Planned Parenthood. The organization receives about $3 million for services, but cannot use the money on abortions. While Planned Parenthood is challenging the law in court, federal action could force a repeal sooner.

President Barack Obama’s administration—through the Centers for Medicare and Medicaid Services— says the state law violates the rules for Medicaid, and as such, Indiana could lose its $4 billion Medicaid allocation if the law is enforced.

Indiana Attorney General Greg Zoeller’s office issued a statement saying its lawyers are reviewing the White House’s position and will continue to defend the law in the meantime.

Planned Parenthood serves about 9,000 Medicaid patients. Through donations, the agency will be able to continue seeing those patients until June 15th. A hearing on Planned Parenthood’s challenge to the law will be held Monday.

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Kentucky Senate To Reconvene; House Remains Adjourned

The Kentucky Senate is returning to Frankfort today to resume the special session on Medicaid. But the House, which adjourned March 24th, won’t be there.

That means there will be no overrides of line-item vetoes of the Medicaid bill issued by Gov. Steve Beshear. Until the Senate officially adjourns, lawmakers are being paid, but Legislative Research Commission Director Bobby Sherman says money that has accrued since March 24 is being held in escrow until legal questions about it are cleared up.

“I don’t want to be issuing pay that the agency then might have to try to retrieve. That would be an administrative nightmare. And secondly, it could adversely affect unintentionally the tax implications for members.”

House Speaker Greg Stumbo suggests seeking an attorney general’s opinion on the pay issue. For now, Senate Republicans are refusing to accept pay for any days past March 24.

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Local News Politics

Kentucky Youth Advocates Study Shows Variations in School Health Systems

A new study from Kentucky Youth Advocates shows that school health services for children vary significantly from district to district in the commonwealth.

KYA asserts that schools are the best places for children to receive certain types of medical attention, including as physical, dental and mental care. But not all districts provide each service.

Executive Director Terry Brooks says there’s no standard way for schools to pay for student health, and the methods use differ across the state. For example, in northern Kentucky, private donations pay for many services, though that can be problematic.

“That school nurse is only as good as the latest foundation grant. In other parts of Kentucky, you see extensive collaboration between health departments and public schools,” he says.

Brooks says Jefferson County Public Schools pays for many health services out of its operating budget, but that’s not always the case in the rest of central Kentucky, where Medicaid dollars are generally unavailable to school health workers.

“The Passport region is kind of like this hole in the doughnut where school districts are left to flounder for themselves because it’s difficult, in fact it’s impossible, to work out what we would consider common sense reciprocal agreements,” says Brooks.

Brooks is urging Governor Steve Beshear and the General Assembly to make it easier for Medicaid providers to administer care to students in schools. Brooks says that’s the best way to make sure students are cared for. A spokesperson for the governor’s office says they are reviewing the report. To read the study, click here (PDF).

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Local News Politics

Beshear Applauds Passage of Medicaid Bill

Promising to use his line-item veto power, Kentucky Gov. Steve Beshear praised lawmakers in the House for agreeing with a Senate plan to fix the state’s Medicaid budget.

On Thursday, the House approved a compromise to cut $101 million from other parts of state government in order to fill a shortfall in the healthcare system.

From the governor’s office:

An overwhelming bipartisan majority of the House of Representatives has taken courageous action, bringing an end to this costly session These legislators and the Senate Democrats have repeatedly stood by me to protect education and many other groups such as state troopers, veterans, and social workers from unnecessary cuts; and to prevent devastating cuts to health care providers that would certainly result in job losses across the state, particularly in rural areas.

Once the bill has reached my desk, I will begin scrutinizing it and will take appropriate action to reflect the priorities I share with the vast majority of legislators.

In an earlier vote, the Senate slashed the current budget by .35 percent and 1.74 percent in the next fiscal year, including cuts to education. Immediately, House Speaker Greg Stumbo, D-Prestonsburg, called the Senate version “unacceptable” before negotiations began.

It appeared the special session was headed for another impasse, but Beshear assured Democrats that he would veto portions of the measure if it passed. Legislators cannot override a gubernatorial veto once the House adjourns the special session.

The bill won’t reach the governor’s desk, however, until Senate President David Williams, R-Burkesville, who is running for governor, signs the legislation. Political observers are unsure if Williams will do so given that Beshear has made his line-item veto intentions clear.