531 deficiencies found in 80 Kentucky nursing homes in first quarter of 2012; worst one had 29; five had none

State inspectors found 531 deficiencies in 80 Kentucky nursing homes in the first quarter of this year, with one facility accounting for 29 of them alone: Life Care Center of Morehead. In five nursing homes, no deficiencies were found.

The information was released by Kentuckians for Nursing Home Reform, a nonprofit organization that advocates for nursing home residents and obtains the data regularly through open-records requests to the Cabinet for Health and Family Services and distributes it statewide. The information is posted as part of Medicare's nursing-home comparison data.

According to the Centers for Medicare and Medicaid Services, the average number of deficiencies for a nursing home inspected in the U.S. is eight and the average in Kentucky is seven. Inspections assess a facility on the care of residents and how that care is administered; on how staff and residents interact; and on its environment. Certified nursing homes must meet more than 180 regulatory standards. The state Office of Inspector General website has more data, such as the results of inspections and the ownership of each facility.

Nursing homes with 10 or more deficiencies in the first quarter were:
• Life Care Center of Morehead (29 deficiencies)
• Kindred Transitional Care & Rehab-Fountain Circle in Winchester (24)
• Signature Health of Pikeville (19)
• Hearthstone Place in Elkton (15)
• Martin County Health Care Facility in Inez (14)
• Wesley Manor Nursing Center in Louisville (13)
• Pembroke Nursing & Rehabilitation Center in Pembroke (13)
• Highlands Nursing & Rehabilitation Center in Louisville (11)
• Mountain Manor of Paintsville (11)
• Cumberland Valley Manor in Burkesville (10)
• Klondike Care and Rehabilitation Center in Louisville (10)

The five nursing homes with no deficiencies were:
• Clark Regional Medical Center in Winchester
• Nazareth Home in Louisville
• Essex Nursing and Rehabilitation Center in Louisville
• Barren County Health Care Center in Glasgow
• Cardinal Hill Rehabilitation Center in Lexington (initial inspection; under new ownership)

For more information about Kentuckians for Nursing Home Reform, click here.

Coventry changes course, will pay for addiction-treatment drug

Reversing its decision, likely after it was pressured to do so, a Medicaid managed-care organization will continue to pay for a drug used to treat drug addiction.

Coventry Cares said it "decided to change course after talking to representatives of a chain of addition treatment clinics that threatened last week to sue Coventry," reports Beth Musgrave for the Lexington Herald-Leader.

Last week, the Cabinet for Health and Family Services sent Coventry a letter expressing its displeasure about the MCO's move, saying it would be a contractual violation. The drug in question is Suboxone, an expensive treatment option for addicts dependent on taking opioids such as Oxycontin and Vicodin. Coventry had said it was aligning its coverage in keeping with Medicaid policy, moving to only cover the full price of the drug for pregnant or recently pregnant women and youth under 21.

After the MCO discussed the issue with SelfRefind, the chain of addiction treatment clinics in question, "Coventry understands their concerns," said Coventry spokesman Eyles. "As a result, we will continue covering Suboxone and similar medicines for all Coventry members while we work through the cabinet's process to determine whether these drugs should be covered for certain categories of Medicaid recipients or everyone." (Read more)

Medicaid managed-care firm Coventry plans to stop paying for expensive drug that curtails addiction

Coventry Cares, one of the four firms that manage patient care for the state Medicaid program, has once again hit the headlines, this time for its plans to stop paying for medicine that helps addicts keep their opioid addiction at bay. State officials quickly condemned the move Thursday and called it a contract violation, reports Beth Musgrave of the Lexington Herald-Leader.

Coventry decided to stop paying for buprenorphine, more commonly known as Suboxone, which helps curtain cravings for drugs such as Oxycontin and Vicodin. A 30-day supply of the drug can cost more than $450, Musgrave reports.

"They will be at risk for relapsing and going back to using illegal opioids," Dr. Michelle Lofwall, an addiction specialist and assistant professor at the University of Kentucky, told Musgrave. "Whenever you are using illegal opioids, there is a risk of overdose and death."

Coventry said it will no longer offer the coverage because only pregnant women, women who recently gave birth and those under the age of 21 are eligible for addiction treatment in Kentucky's Medicaid program. "What we've done is align our coverage with the cabinet's Medicaid policy," said Matt Eyles, a Coventry spokesman.

However, the state Cabinet for Health and Family Services said the decision violates the contract and "cannot take this unilateral action without the cabinet's approval," said Jill Midkiff, a cabinet spokeswoman. 

A company that operates addiction treatment centers across the state was planning to file suit over the move Friday, but, after learning of the cabinet's reaction, "We are going to give them the chance to work this out," Anna Whites, an attorney who represents SelfRefind.

Coventry already caused controversy this week when it informed Baptist Health System wants to renegotiate its contract. The move comes just a week after Coventry and Appalachian Regional Healthcare came to a temporary agreement after Coventry threatened to terminate its contract and ARH sued Coventry. The company has also told King's Daughters Medical Center in Ashland it will terminate its contract after May 26. (Read more)

Cabinet must 'wield the stick' to get managed care under control, state auditor says

Though the state has a solid contract "filled with all the mechanisms you need for enforcement, from the carrots to the sticks," the Cabinet for Health and Family Services has to be more aggressive in cracking down on the managed care organizations (MCOs) that run the state's $6 billion Medicaid system, state Auditor Adam Edelen says.

Edelen, who has been in office a little over four months, discussed managed care with Ryan Alessi, host of cn|2's "Pure Politics." Edelen is reviewing the new system and submitted 10 recommendations for improvement to the cabinet in February.

"The issues have been enormous — providers not being paid in a timely manner, a lack of communication between the cabinet and the MCOs and the providers, has created a system in which there is a lot of uncertainty and a lot of people are being squeezed out," Edelen said.

Couple that with the fact that Appalachian Regional Healthcare, which serves more than 25,000 Medicaid patients, sued two of the three MCOs in charge of the state, claiming they are owed $18 million for services that have been provided. Last week, ARH and MCO CoventryCares came to an agreement after being ordered by a federal judge to negotiate.

Edelen pointed out the broader ramifications of the situation. "If our largest Medicaid provider in the part of the state that needs it most for some reason is not able to operate within the system because they can't manage their relationship with Coventry or vice versa, that represents a structural threat to the system," he said. "We've got to figure out a way to make it work."

In order to do so, Edelen said "the cabinet has got to be willing to wield the stick" and is able to do under the terms of its contracts with the MCOs, which allow the cabinet to cancel contracts, "sanction and punish" the MCOs and make changes to the system. He said new cabinet Secretary Audrey Haynes has a tough job ahead and said "strong leadership" is critical.

When asked if his review looks into what work is being accomplished by the state's 200 employees who used to handle Medicaid — work that is now being managed by the MCOs — Edelen said it hasn't. (Read more)

Meanwhile, the Lexington Herald-Leader weighed in on the lawsuit between ARH and CoventryCares, saying in an April 24 editorial, "Coventry should keep working with Haynes and ARH on solutions. The editorial also stated, "Beshear, a former corporate lawyer, should bring the weight of the governor's office to bear and get busy making his Medicaid managed care contracts work." (Read more)

Coventry agrees to keep covering ARH patients until June 30

After a two-hour hearing in federal court, managed-care firm CoventryCares agreed yesterday to keep paying Appalachian Regional Healthcare for treating Medicaid patients at its hospitals through at least June 30 while negotiations continue.

"Coventry officials said the state allowed another managed-care provider not to include ARH in its network, which meant a lot of higher-risk, higher-cost patients ended up covered by Coventry," the Lexington Herald-Leader reports. "Blaming the state, Coventry had notified ARH that it was going to terminate its contract Friday. About 25,000 Medicaid recipients in the ARH service area would have been affected."

ARH then sued Coventry in U.S. District Court and asked for an injunction to continue coverage, which Coventry had said it would end yesterday. The state ordered it to maintain coverage for 30 days, and Senior Judge Karl Forester ordered ARH and Coventry to negotiate.

After yesterday's hearing, the adversaries and the state "all said the goal was for patients to continue receiving care through Appalachian Regional Healthcare's hospitals in Eastern Kentucky on a long-term basis," the Herald-Leader reports. "If the health care chain and Coventry reach an impasse, cabinet officials said procedures could be expedited with Coventry's cooperation. That would allow Coventry members to switch to another insurance provider and continue receiving services at ARH, considered the largest health care chain in Eastern Kentucky." (Read more)

ARH has hospitals in Harlan, Hazard, Hindman, McDowell, Middlesboro, West Liberty and Whitesburg, as well as three in West Virginia, including Williamson, on the Kentucky border.

Appalachian Regional Healthcare asks federal judge to make managed-care firm keep it under contract

Appalachian Regional Healthcare, a hospital chain in Eastern Kentucky and southern West Virginia, is seeking an emergency injunction by a federal judge ordering Coventry Cares to let its Kentucky members continue receiving services from the hospitals, and to avoid widespread layoffs the chain says will happen if the judge doesn't intervene, reports Bill Estep of the Lexington Herald-Leader. Coventry Cares is one of three state-approved companies to provide managed care services through Medicaid. It said it would cancel its ARH contract after Friday, which would affect about 25,000 Medicaid recipients.

With a few exceptions, Coventry members would lose access to treatment or have to travel long distances to get to other facilities approved by the company, which ARH and officials in affected counties say would be difficult for most because they don't have money or reliable transportation to make the trip. Coventry spokesman Matthew Eyles said the company would continue paying for some services at ARH hospitals, including ob-gyn services to women who are more than 12 weeks pregnant and have a relationship with an ARH doctor.

The state switched to managed-care last year as a way to save money, but as Estep reports, the move has been "rocky." Providers have complained about delayed payments from the companies and their cumbersome pre-approval processes for treatments. ARH sued Coventry and Kentucky Spirit, another provider, claiming the companies owed more than $18 million for services ARH had provided.  Estep notes, "The state allowed another managed care provider not to include ARH in its network, which meant a lot of higher-risk, higher-cost patients ended up covered by Coventry, the company said." The company also said the state failed to implement a method to assess risks that would adequately compensate managed-care providers who have more high-risk patients."

ARH and its Coventry patients think the company is trying to get more money out of the state. Many of ARH's patients are covered by Coventry, and ARH spokeswoman said about 300 to 400 jobs would be cut if Coventry cancels its contract. State officials are encouraging continues negotiation between ARH and Coventry. (Read more)

Meanwhile, Bardstown pediatrician and Passport Health Plan board member James Hendrick wrote a letter to the editor of The Courier-Journal offering Passport's services to "help the state get Medicaid back on track." He said he's been very impressed with the nonprofit's "strong and engaged provider network, and an intense focus on delivering services at a cost that doesn’t diminish quality," adding that because Passport is a nonprofit, it's not concerned with appeasing shareholders. Passport has been managing Medicaid in the Louisville region for several years.

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)

Beshear vetoes parts of budget, but health spending is intact

Though Gov. Steve Beshear vetoed 45 parts of the state budget yesterday evening, health-related spending was safe from the cut.

The budget will help reduce caseloads for social workers who investigate child abuse and neglect, funds colon cancer screenings for 4,000 uninsured Kentuckians, substance-abuse treatment for Medicaid recipients and includes funding for an elder abuse registry to protect senior citizens from unscrupulous caretakers.

"This is the most difficult budget I have ever drafted, and it will also be a challenge to implement and manage over the next two years," the governor said in a statement.

In the two-year, $19 billion budget, Beshear voted more than three dozen line-item appropriations, including "portions of the General Fund budget that limited his ability to manage the state's budget or spent money that doesn't exist," reports Beth Musgrave of the Lexington Herald-Leader.

He also cut some earmarks, including $100,000 for Actors Theatre of Louisville and $150,000 for the International Mystery Writers' Festival in Owensboro. "I am vetoing these parts because they identify new spending earmarks yet the General Assembly failed to appropriate additional funds to finance them," Beshear said. (Read more)

Chiropractic clinic to pay $650K for Medicaid and Medicare fraud

A chiropractic clinic in Williamsburg will pay $650,000 to settle claims it improperly billed Medicare and Medicaid, reports Trent Knuckles for The News Journal of Corbin. (News Journal graphic)

Ho Medical Clinic, Kenneth Ho and Ana Moreno allegedly filed false claims when they billed for physician services, though they were performed by a chiropractor (chiropractors are not medical doctors); billed for unnecessary and unreasonable MRI and X-ray services; billed for work performed by unqualified personnel; and received funds for being a rural health clinic when it did not meet Medicare requirements.

Of the $650,000, $525,000 will go to the Medicare and Medicaid trust fund. The remaining sum will go to Danette Freeman, who sued the company under the False Claims Act. The investigation was conducted by the Kentucky attorney general's office, the Department of Health and Human Services' Office of Inspector General and the U.S. attorney's office. (Read more)

Knox County Hospital bounces employees' checks; blames old, bad debt and late Medicaid payments

Debt inherited from previous management and late Medicaid payments caused some Knox County Hospital checks to bounce. Most of the facility's employees could not cash their checks last Friday afternoon.

"It was more of an accounting issue than anything and had we known that this was going to happen, we would have put personal money into it and this wouldn't have happened," said Dr. Satya Chatterjee, a management owner. Hospital CEO Craig Morgan said, "That money is starting to come; it's just not coming fast enough, so hopefully we're past the worst of it." Morgan said he "takes the blame for the billing issue and actually had all people in administration hold their checks so other employees were paid as soon as possible,"  Jerrika Insco reports for WYMT-TV.

It is not the first time the hospital has bounced checks, . "Ever since Medicaid was implemented, the CEO says the hospital has struggled financially," Insco reports.

Presumably, she means managed care for Medicaid, which has prompted many complaints from health-care providers. Since the legislative session began, lawmakers have heard gripes about the state's three new managed-care companies, who took over Kentucky's Medicaid program outside the Louisville region Nov. 1. The companies have been too slow to reimburse providers and require burdensome pre-authorizations before treatment can be provided, critics say. State Auditor Adam Edelen said the companies are sitting on "north of a quarter billion dollars of taxpayer dollars. That's something that requires an explanation to the people of Kentucky." (Read more)

Kentucky hospitals say they gave back $1.67 billion to their communities in 2010, mostly by absorbing losses and bad debts

By Tara Kaprowy
Kentucky Health News

With the downturn in the economy part of the reason, Kentucky's hospitals say they gave back a whopping $1.67 billion to their communities in 2010, mainly by providing care for which they were never paid.

That's 13 percent more than the hospitals reported last year, and just one of many figures in the latest annual report from the Kentucky Hospital Association, which runs a little over a year behind because it takes a long time to compile the data from more than 100 hospitals.

KHA's 2010 Community Benefits Report shows hospitals absorbed $435.5 million in bad debt in 2010, which accrued when patients came to the hospital and were treated but did not pay their bills.

Shortfalls in Medicare and Medicaid payments cost even more — $456.2 million — because the federal government reimburses Kentucky hospitals for about 85 percent of the cost of Medicaid patients and 95 percent for those on Medicare. That's big, because 71 percent of patient days in Kentucky are covered by one of these programs, said Pam Mullaney, KHA's director of membership services. Hospitals also gave $274 million to charity-care programs that are set up to include free or discounted care to people who are unable to pay. Those three categories of losses increased by more than $158 million over 2009. KHAcalls them community benefits because "you're not getting any type of margin," Mullaney said.

A 2009 Thomson Reuters study showed the average U.S hospital reported an operating profit margin of 3.7 percent. The average operating margin at Kentucky hospitals was 2.44 percent in 2009. Forty percent of hospitals lost revenue from patient services that year, Mullaney said. Still, reported community benefits increased by 13 percent, a total of $190 million.

This is the third year of the report, which was based on a voluntary survey to which 104 of 123 hospitals responded (Eight hospitals were not surveyed because they treat limited types of patients, such as veterans, children or psychiatric cases.) Mullaney said the number of hospitals turning in figures "has grown a little bit each year, but it’s not consequential."

Hospitals are asked to describe and put a value on the programs and activities they provide at or below cost that help their community. Though community benefits are "the greatest single affirmation of not-for-profit hospitals' tax-exempt status," Mullaney said data show Kentucky's 26 for-profit hospitals "do every bit as much as the not-for profits."

In the past two years, Pikeville Medical Center has absorbed $70 million in charitable care and bad debt. The Murray-Calloway County Hospital is in the ninth healthiest county in Kentucky, but has felt the crunch too. From 2010 to 2011, bad debt increased from $7 million to $7.8 million and charity care increased from $5.1 million to $6.2 million.

T.J. Samson Community Hospital in Glasgow has also seen bad debt increase and business decrease when the economy crashed and then stagnated. "Our elective procedure volumes have come down. Patients often wait until they're sicker before they come in," said Laura Belcher, director of planning, marketing and development. The hospital has responded by cutting costs, adopting the "lean philosophy" of eliminating waste and streamlining processes.

Interestingly, the hospital is also pushing for more preventive care since the economy went south. "People ask us, 'Aren't you putting yourself out of business?' But we really want people to be proactive about their health. We've done a lot more health fairs, more screenings," Belcher said.

Indeed, the report shows Kentucky hospitals spent $500 million in 2010 to actively help their communities, through such activities as health screenings, support groups, research, training of nurses and doctors, addiction recovery and neonatal intensive care, or simply donating money to community functions. Many of these programs "are provided at no cost or at a financial loss and would not be provided if the decision was based on monetary decisions," Mullaney said.

Realizing there was a need in the area for children with special needs, the Glasgow hospital set up C.A.M.P. T.J. Kids, a weeklong day camp in the summer for children with special needs. "These children often receive services through school and during school," Belcher said. "But we found many of the families could not afford or handle the transportation to get here during the summer. This is almost like a summer booster."

The camp falls under the umbrella of the Discovery Academy, funded by the hospital and money raised by volunteers. The academy also hosts an annual overnight camp for children with autism. While the children swim in the hotel pool or interact with each other, parents are "in a conference setting to learn about ways they can learn to be better parents" to kids with autism, Belcher said. "In the evening, while children are being supervised, the parents get to go for a quiet, romantic dinner."

When tornadoes struck Kentucky March 2, Pikeville Medical Center kicked into high gear and co-hosted a radio-a-thon that raised $200,000. "We allowed our employees to donate their vacation time, which we converted to actual dollars based on their rate of pay, and we offered employees the ability to do payroll deductions to contribute to the cause," said Cindy Johnson, director of public relations and the Medical Leader, the hospital's community newspaper.

The Murray hospital has increased its community outreach efforts and adopted a mission to provide the local school system with athletic trainers, whose salaries are paid entirely by the hospital, as well as school nurses, which are partly hospital funded. The goal is to promote health and wellness, said marketing director Melony Bray.

The KHA's Mullaney said the annual report reminds people what their hospital does. "A lot of times people think of their hospital as a place to go when they need emergency help," she said. "They don't think of the hospital as one of the big providers in the community for health fairs, health professional education, types of efforts in the community to help improvements like playgrounds and common spaces. Those are things that hospitals often get overlooked for but they do that because they are part of the community."

Kentucky Health News is a service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Medicaid recipients displaced by tornadoes can get emergency 30-day refills of prescriptions

Kentuckians on Medicaid who were displaced by last week's storms can get a 30-day supply of needed medicine from their pharmacy, the Department of Medicaid Services announced yesterday.

The right to receive an emergency refill applies to residents living in Ballard, Bath, Carroll, Campbell, Grant, Grayson, Hardin, Johnson, Kenton, Laurel, Lawrence, McCracken, Magoffin, Martin, Menifee, Montgomery, Morgan, Muhlenberg, Ohio, Owsley, Pendleton, Rowan, Russell and Trimble counties. Those counties have declared a state of emergency.

The state's four managed-care organizations are informing pharmacies of the policy, which was part of an executive order signed by Gov. Steve Beshear last weekend. Medicaid recipients who are not enrolled with an MCO can also receive replacement medications at their pharmacy. Co-payments will be waived.

"Many Kentuckians depend on regular maintenance medications, like blood pressure pills, and skipping a few days could cause unnecessary hardship or possible poor health outcomes for some citizens," Beshear said. "This order will allow people to contact a pharmacist to restore their regular medications." (Read more)

State and companies were unprepared for quick move to managed care, state auditor concludes

Kentucky officials and the companies in charge were unprepared for the switch to Medicaid managed care, State Auditor Adam Edelen said Wednesday. He sent the Cabinet for Health and Family Services 10 recommendations to improve the system, which provides health care for 560,000 Kentuckians who are poor, disabled or elderly.

Since the legislative session began, providers and patients have bitterly complained that the three new managed-care companies are "too slow to reimburse providers" and have "cumbersome pre-authorization processes to allow treatment," reports Beth Musgrave for the Lexington Herald-Leader. The state moved to managed care Nov. 1, a move meant to save the state $1.3 billion in three years.

In addition to the recommendations, Edelen said he will form a Medicaid auditing unit designed to improve the system. He recommended: hiring more managed-care staff to fix backed up claims payments and treatment authorizations, developing a system to measure whether providers are receiving payments in a timely way, and considering removing mental health services from the contracts. Kelly Gunning of the National Alliance on Mental Illness told lawmakers last week that she had asked mental health to be removed from the contracts in January, saying it had not worked in other states either. The companies are reportedly asking psychiatric patients to switch medications, even if the ones they are already on are working. The move has "meant that more people with serious mental illness have had to return to state psychiatric treatment centers," Musgrave reports.

Edelen said Kentucky officials "did not learn from the 1997 launch of Kentucky's first managed care contract — Passport in the Louisville area — and seemed ill-prepared to monitor and enforce the three new managed care contracts," Musgrave reports. Under managed care, the companies are paid a predetermined per-patient, per-month amount regardless of what care is needed. Because they won't be paid using a fee-for-service model — believed to be more costly — and will try to streamline care, managed care is meant to save money. (Read more)

Managed-care executives acknowledge problems, say they're trying to fix them

Executives of three managed-care companies who run most of the state's Medicaid program told a legislative committee yesterday that they are aware of "significant problems" with their management since they took over in November, and they are "committed to fixing them," reports Deborah Yetter of The Courier-Journal. Health-care providers have complained to lawmakers for months about late payments, claims processing and battles over new rules requiring "pre-authorization" to guarantee payment. The executives said they're meeting with providers to solve the problems.

Health care providers implied last week during testimony that the companies were withholding payments to "maximize their profits," Yetter notes. All three executives denied the claim, saying they have to pay interest on payments delayed more than 30 days. They said some late payments "weren't getting past billing clearinghouses" that many health-care providers use to process Medicaid claims. Claims have been delayed in those facilities for a number of reasons, the executives said, including new billing requirements under managed care. They said they are working to identify and pay those claims. (Read more)

Legislators hear from new managed-care firms; lawmaker rates their performance with a show of hands from pharmacists

Kentucky Health News

The three companies recently hired to manage Kentucky's Medicaid program outside the Louisville region defended themselves yesterday against complaints that they are squeezing independent pharmacies to the breaking point. One of the three firms, Kentucky Spirit, fared better in a hearing held by a House-Senate committee before a crowd that included many pharmacists.

When Sen. Vernie McGaha, R-Russell Springs, "asked for a show of hands from pharmacists in the audience to learn which of the three pharmacy-benefits companies they think underpay on generic drugs, nearly everyone raised their hands for Medco Health Solutions, which is Coventry [Cares]'s partner, and Catalyst Rx, which is WellCare [of Kentucky]'s. No one seemed to object to US Script, which is Kentucky Spirit's partner," reports John Cheves of the Lexington Herald-Leader.

Kentucky Spirit is the only firm that continues to pay pharmacists a dispensing fee of $4.50 to $5 per prescription, the rate that had been paid by the state. WellCare pays $3, and CoventryCares $1 to $1.50, the pharmacists told Deborah Yetter of The Courier-Journal. "Pharmacists have told lawmakers at previous hearings that pharmacy-benefits companies sometimes pay less for generic drugs than it costs pharmacies to acquire them," Cheves notes.

Read more here: http://www.kentucky.com/2012/02/13/2067444/medicaid-managed-care-companies.html#storylink=cpy

Rep. John Will Stacy, D-West Liberty, left, whose business interests include co-ownership of at least two pharmacies, got into it with G. William Strein, Medco's vice president for provider relations. "Stacy cut off Strein several times while he was attempting to answer," Cheves reports.

“Why is it fair that you can reimburse us below costs?” Stacy asked Strein, who "disputed Stacy’s assertion and said managed care attempts to strike a balance between its estimated cost of the drug and the costs of the pharmacy to buy and dispense it," Yetter reports. "But that claim was disputed by some of the roughly 30 pharmacists at the hearing who operate independent drugstores. Though the hearing ended before they got a chance to testify, several said afterward that they intended to keep making their case before lawmakers."

Jason Wallace, owner of Grant County Drugs, told Yetter, “It’s a real burden for Kentucky pharmacists. That’s why I’m here.” All the companies told members of the Joint Program Review and Investigations Subcommittee that they are committed to resolving the problems.

"Much of Monday’s testimony was devoted to the complex pricing formula known as the maximum allowable cost, or MAC, that managed care companies consider proprietary," Yetter writes. "Under the Medicaid plan before managed care, the formula was provided to pharmacists, who said they knew what they would be paid. Now, they said, they don’t find out what a company will pay for a specific drug until they file claims. And too often, they say, it’s less than they paid to buy the drug.

“How would you like to go to a gas station and fill your car up with gas and then be told what the charge is?” Breckinridge County pharmacist Jonathan Van Lahr asked after the hearing. (Read more)

Kentucky Health News is a service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Legislators hear about serious problems in managed-care system

The switch to the new Medicaid managed-care system is proving to be a nightmare, health officials told lawmakers Wednesday, with long delays in payment to providers and treatment for patients.

"It appears to me the only place the savings can come from is the delay and denying of care," said Dr. Shawn Jones, president of the Kentucky Medical Association and physician in Paducah. "Patient care is being delayed and, in some cases, simply prevented." (Video from cn|2)

Jones was one of several officials who testified at a meeting of the Senate Health and Welfare Committee. The new system requires pre-authorization for procedures that were once routinely covered, so patients spend hours in waiting rooms or are told to go home and return after their procedures have been given the go-ahead. In one instance, a woman in labor came to the hospital to deliver "and the managed-care company insisted that her care be pre-authorized," reports Deborah Yetter of The Courier-Journal.

"Fourteen days later, mom and baby are home and we still have no pre-authorization," said Joe Grossman, chief financial officer of Appalachian Regional HealthCare.

Problems started Nov. 1 when the state turned its Medicaid program outside the Louisville region to three managed care companies. (Louisville-area recipients have long been managed by Passport Health Plan.) The move is intended to save the state money and fill a hole in the Medicaid budget. But officials said the three companies — CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky — seem to be purposefully delaying claims payments, though the state has already paid them $135 million since Nov. 1.

"I feel like I've become a bank to these out-of-state insurance companies," said Grossman, whose eight-hospital chain is owed $8 million. "I've lent them money."

The managed care companies did not testify Wednesday, but issued statements saying they intend to address the issues at hand. Neville Wise, the state's acting Medicaid commissioner, " said he believes the issues are just temporary bumps that can be ironed out," Ryan Alessi of cn|2's "Pure Politics" reports. The requirement that childbirth be pre-authorized, for example, has since been rectified, Yetter notes. State Sen. Julie Denton, R-Louisville, asked Wise, "How many more ludicrous scenarios can there be?" (Read more)

More children are victims of abuse than of SIDS, study finds

As the state's major newspapers and the Cabinet for Health and Family Services battle over how public records pertaining to child abuse and neglect should be handled, children continue to be victims across the country. A study published Monday in the journal Pediatrics has found child abuse affects more babies in the U.S. than SIDS. (Photo by Getty Images)

The rate of hospital admissions for SIDS, or sudden infant death syndrome, is 50 per 100,000 for children under the age of 1. In the same age bracket, 58.2 per 100,000 babies are getting hurt as a result of abuse, reports Bonnie Rochman for Time's Healthland.

"These kids are physically vulnerable because they're small," said Dr. John M. Levanthal, leader author of the study and professor of pediatrics at Yale Medical School. "They are challenging for some parents to take care of because they cry, it's hard to understand what they want and parents can get frustrated, exhausted and angry."

Indeed, abuse most often stems from parents. Previous research shows men, including fathers, stepfathers and boyfriends, are the "largest single group of perpetrators," Rochman reports.

Research conducted at Yale found that in 2006 4,569 children under the age of 18 were brought to the hospital as a result of abuse, 300 of whom died. The resulting death rate of 6 percent was "substantially higher than for children who were admitted for other kinds of injuries or medical or surgical problems," Rochman reports.

The most common injuries included abusive head trauma, fractures, burns, abdominal injuries and bruises. Those hospitalizations cost about $73.8 million and lasted twice as long as children who suffered other kinds of injuries.

Children living in poverty were the victims of abuse much more often, getting hit at six times the rate of children not on Medicaid.

A report showed 18 Kentucky children died from child abuse or neglect last year, down from 33 in 2009, but those numbers have since come into question. A survey in Kentucky and three other states showed child abuse rates have risen significantly since the economy went into recession — from 8.9 per 100,000 children from 2004 to December 2007 to 14.7 per 100,000 during 2008 and 2009. (Read more)

Funding substance-abuse treatment for Medicaid recipients could help 6,000 people, official says

If the budget proposed by Gov. Steve Beshear is passed, 6,000 Kentuckians on Medicaid could be treated for substance abuse, ultimately saving the tax system hundreds of thousands of dollars.

That was the message Monday during a House budget subcommittee on health and human services hearing. "All of the research shows that this is a smart thing to do," said Stephen Hall, commissioner of the Department for Behavioral Health, Developmental and Intellectual Disabilities.

Treating a person with intensive drug addiction services costs $2,500. But an adult who is not treated costs taxpayers more than $23,000 in prison and other costs, Hall said.

Kentucky is "one of only seven states that does not offer substance-abuse treatment in its Medicaid program," reports Beth Musgrave for the Lexington Herald-Leader.

Beshear has proposed an expansion of drug addiction services in his two-year budget, one of few new spending projects. He is requested $11.6 million in the first year of the budget, which would help about 4,500 people. He wants another $14.9 million in the second year of the budget to help about 1,300 people. Kentuckians who are eligible for Medicaid and who have a mental illness and substance-abuse problems will have priority in the program, as will those with substance-abuse issues and custody of a minor child.

Though "many on the House budget committee applauded the move," Musgrave reports, at a time when state agencies are facing 8.4 percent cuts, the spending project is a hard sell. "It's difficult to start any new programs," said Sen. Robert Leeper, an Independent of Paducah and chairman of the Senate Appropriations and Revenue Committee. (Read more)

Responding to complaints about new managed-care companies, state auditor asks for claims data; lawmakers threaten subpoena

With complaints piling up about the three Medicaid managed-care companies that coordinate care for 560,000 poor and disabled Kentuckians, lawmakers and officials are taking action to get to the bottom of the situation.

After health providers complained reimbursements have been wrongly rejected, delayed or ignored, state Auditor Adam Edelen asked to see the companies' claims-processing data, reports Deborah Yetter of The Courier-Journal. Legislators are threatening to subpoena the companies "after the state's 550 small pharmacists complained that they're being pushed out of business by the companies' low Medicaid reimbursements," Yetter and Mike Wynn report for the C-J. (C-J photo: Pharmacist Mac Bray at Capital Pharmacy in Frankfort)

Some providers said they are having to borrow money to offset the shortage until the claims are reimbursed. Others are worried they will go out of business because they can't afford to wait for claims to be paid.

Audit: Edelen told CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky he wants the claims data by Feb. 17. He also asked for information from Passport Health Plan, which has long coordinated care for 170,000 Kentuckians in the Louisville area. No complaints have been voiced about Passport, but an Edelen spokeswoman said they want to get information to paint "a complete picture."

The move to managed care was the Beshear administration's answer to fill a hole in the Medicaid budget, but lawmakers have complained the transition has been bumpy. "They never know when they are going to get paid," said Sen. Joey Pendleton, D-Hopkinsville. "I can see why it saves money — if you don't pay your bills, you have more money." (Read more)

Pharmacies: The House-Senate Program Review Committee has asked officials from the three companies to appear Feb. 13 to answer questions. If the committee doesn't get the information it seeks, it will issue subpoenas. "This is a drastic measure, but they are putting our independent pharmacists out of business," said Sen. Jimmy Higdon, a Lebanon Republican who co-chairs the committee. "You can't see things for less than they cost and stay in business."

With traditional Medicaid, "pharmacists were paid a dispensing fee of $4.50 to $5, plus the cost of medication, based on an industry formula called the maximum allowable cost," Yetter and Wynn report. "But two of the three companies under contract with the state have cut the dispensing fee to $1 to $3. And pharmacists say that under managed care, the maximum allowable payments don't cover their costs of buying the drugs from the wholesaler."

The committee has not used its power to issue subpoenas in more than 10 years, Higdon said. (Read more)

More complaints lodged about Medicaid managed care; lawmakers demand answers

Complaints continue to pile up about the state's new Medicaid managed care plans, which cover about 560,000 Kentuckians. Lawmakers are hearing gripes from providers who say they are not getting paid, and from patients and clinics who say the three managed-care companies take too long to give permission for certain care.

"It's a drastic change to the system," Neville Wise, the state's acting Medicaid commissioner, told the Senate Health and Welfare Committee yesterday. "We didn't expect the level of issues that we had."

Sen. Julie Denton, a Louisville Republican who chairs the committee, "expressed outrage about a case in which she recently called the president of one company trying to get care authorized for a battered domestic violence victim who sought treatment at a Lexington clinic on a Friday afternoon," reports Deborah Yetter of The Courier-Journal.

Despite Denton's call to Coventry Health Care, the woman was not able to get a scan for a shoulder injury until the following Monday. "This woman had to go in pain all weekend because she couldn't get the services she needed," Denton said. "This is not acceptable, and this is only one instance that I know of."

Denton also asked about late payments to providers. "The payment issues have gone on way too long, and it should have been better," Wise responded.

Kentucky moved to three managed care companies Nov. 1, in an effort to save the state money and balance the Medicaid budget. (Read more)