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.

State tells Coventry Cares to keep covering ARH patients; managed-care firm says it will drop Ashland hospital

The state has ordered Medicaid managed-care firm Coventry Cares to keep paying for its members to be treated at Appalachian Regional Healthcare hospitals for at least 30 days, rather than stopping tomorrow -- when a federal judge will hold a hearing in ARH's lawsuit against Coventry, after having ordered negotiations between the parties. For more from ARH, click here.

Meanwhile, the Lexington Herald-Leader reports that Coventry plans to stop paying for services at King's Daughters Memorial Hospital in Ashland, one of the largest health-care facilities in the region. Hospital spokesman Tom Dearing told the newspaper, "Coventry's obvious lack of commitment to the people of Eastern Kentucky, putting profits ahead of lives, will potentially leave thousands of Medicaid recipients without adequate health care options." He said the hospital had 29,000 cases covered by Coventry from Nov. 1 to March 31. (Read more)

Read more here: http://www.kentucky.com/2012/05/02/2172494/judge-orders-hospital-chain-medicaid.html#storylink=cpy

Managed-care firm blames state for problems leading to impending end of contract with ARH hospitals

In the face of a lawsuit that alleges it did not pay claims promptly, Coventry Health and Life Insurance Co. blamed the state for problems that have surfaced since managed care was implemented. Coventry has canceled its contract with Appalachian Regional Healthcare, which has sued the company as well as Kentucky Spirit Health Plan Inc., reports Nola Sizemore for the Harlan Daily Enterprise.

"The current crisis would have never occurred except for the commonwealth's failure to make timely and reasonable decisions on three major issues," Coventry Executive Vice President Timothy Nolan said in a letter to ARH President Jerry W. Haynes. The issues are "a failure to implement a risk adjustment methodology, failure to find a solution to the supplemental hospital payment issue and errors in the original data book and failure to ensure all MCOs meet the same robust standards for network adequacy," Sizemore reports. MCOs are managed-care organizations.

Conventry Health and Kentucky Spirit are two of three MCOs chosen to manage the state's Medicaid program. Since they took over Nov. 1, there have been repeated complaints about delayed payments, as well as burdensome rules requiring doctors to get pre-authorization from the companies before they can provide care.

ARH treats about 25,000 Medicaid patients at its eight hospitals. In the past six months, nearly 11,000 Medicaid visits have been made at the Harlan facility alone, with 7,800 of them covered by Coventry, said Mark Bell, community and patient advocate. This will "present a complex and serious crisis for everyone," he said. (Read more)

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)

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)

Switch to managed care happened too fast with too little knowledge, former Medicaid commissioner says

States like Kansas are looking at Kentucky as a precautionary tale for what not to do when transitioning to managed care, former Kentucky Medicaid commissioner Shannon Turner told Ryan Alessi on CN|2's "Pure Politics" Wednesday. Kansas Gov. Sam Brownback "was heralding Kentucky . . . in the beginning," she said. "And last week, his office released what I call a 'Kansas is not Kentucky' statement."

Turner, who was fired from Passport Health Plan after she was linked to excessive travel expenses and is now a health-policy consultant, said Kentucky rushed into managed care too quickly — rather than a few months, the state really needed a year, she said. In Turner's view, there also isn't enough expertise in the Cabinet for Health and Family Services to deal with the three new managed-care operators. "I think the managed-care companies really don't have the resources that they need at the state level to give them direction," she said. "On the state side, you have people looking at managed-care processes that they really aren't familiar with."

In other states that switched to managed care, Turner said there was a turnover in state staffing. In Kentucky, "There haven't been cuts, there haven't been layoffs . . . so what are the people who are there at Medicaid focused on, and is there adequate training?"

On Nov. 1, 560,000 Medicaid recipients were switched to managed care, which is "essentially outsourcing" to the managed-care operators, Turner said. Lawmakers have heard complaints about delayed payments and rigid pre-authorization requirements, including one instance Alessi mentioned, involving a woman in labor who was required to get pre-authorization before she could deliver her baby.

Turner said the MCOs are "excluded from the majority of the rules that apply to HMOs," including one that would prevent them from "sitting on" payments." Turner called the process a "bloodbath" for independent pharmacists because of those delayed payments, as well as community mental health centers, who were "seeking pre-authorization . . . but the managed care companies said, 'You can't send it to us electronically.' They were literally snail-mailing these things." (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)

Lawmakers hear more complaints about managed care

Patients with mental illness are being denied medication, forced to try cheaper drugs that have already been proven not to work for the patient, or not getting them in time because of delays in approval. These were some of the complaints of the state's new Medicaid managed-care system, reports Deborah Yetter of The Courier-Journal.

"If this is how it's going to be, it is scary," Dr. Scott Haas, chief medical officer of the Bluegrass Mental Health/Mental Retardation Board, told the state Senate Health and Welfare Committee Wednesday. "It is dangerous, and it ultimately is going to cost us a lot of lives."

The testimony is the latest that highlights the weaknesses of managed care, which the state changed to on Nov. 1 to for 560,000 Medicaid recipients living outside the Louisville area. Executives of the three companies hired to provide the care — CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky — last week pledged to do better.

The majority of yesterday's testimony focused on the system's problems in dealing with mental illness, but Deb McGrath, executive director of the Epilepsy Foundation of Kentuckiana, said she's been inundated with "complaints about delays or rejections in medications patients need to control seizures," Yetter reports. "Something has to be done," McGrath said. "It's just a vicious cycle." (Read more)

Kentuckians talk about health care on new video channel

Featuring stories of Kentuckians telling their stories about their experiences with the health care system, Kentucky Voices for Health has launched a video advocacy channel.

"The mission of Kentucky Voices for Health is to advocate for the needs of the Kentucky health care consumer," Executive Director Jodi Mitchell said. "That means our main priority is helping to ensure that all Kentuckians have access to the quality care they deserve. This new video advocacy effort will ensure that legislators, media and the public can always hear firsthand about the healthcare concerns facing our state."

KVH is a coalition of more than 250 health care organizations, individuals and advocates. The stories will initially focus on stories relating to the move to Medicaid managed care. For more information, click here.

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)

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)

Home-health industry is the latest to complain about late payments since state switched to managed-care Medicaid

Kentucky's new Medicaid managed-care system is three months late in making payments to home-health agencies, officials told the House Health and Welfare Committee Thursday.

Nurses Registry and Home Health has outstanding claims of $300,000 to $400,000, Jeannie Lemaster, chief compliance officer, told lawmakers. "Kip Bowmar, executive director of the Kentucky Home Health Association, said only 8 percent of the claims from the approximately 150 home-health agencies have been paid since the switch to managed care Nov. 1," reports Beth Musgrave of the Lexington Herald-Leader.

"If these problems don't get corrected, there is a likelihood that some agencies could go out of business," Bowmar said.

Therapists who work with abused, neglected and at-risk children have likewise told lawmakers of back payments. Independent pharmacists have said "reimbursement rates are much lower than they were under traditional Medicaid, which means they are having to lay off employees," Musgrave reports.

In November, Kentucky made the switch to managed care for its 500,000 Medicaid recipients outside the Louisville region. The move is expected to save the state more than $1 billion in the next three years. Three companies, Coventry Cares, Wellcare of Kentucky and Kentucky Spirit, broker the care and are paid on a per-patient, per-month rate.

Lemaster said most of her agency's problems are with Coventry, which has denied 82 percent of their claims. "Lemaster said that because there are differences in the managed care companies and what is being approved for payments, there are inequities in the Medicaid system," Musgrave reports. "Some people are receiving services and others aren't."

Jill Midkiff, spokeswoman for the Cabinet for Health and Family Services, said problems related to the changeover are being ironed out. "The primary focus of the Medicaid program staff is and continues to be the prompt resolution of any issues that arise as we ease the transition of providers to managed care," she said. (Read more)

Passport to lose exclusive contract for Louisville-area Medicaid at end of 2012; more choice needed, federal agency says

The exclusive contract the state has with Passport Health Plan, which provides Medicaid coverage for 170,000 people in Jefferson and 16 neighboring counties, has been extended until the end of next year. But after that, the state must adopt a different "delivery model that ensures adequate choice for Medicaid beneficiaries" in that area, a letter from the federal Centers for Medicare and Medicaid Services reads.

Since 1997, Passport has exclusively provided coverage for that population, reports Tom Loftus of The Courier-Journal. Gov. Steve Beshear said Tuesday the state will start looking at alternatives for how to provide choice for the area. In the rest of Kentucky, Medicaid recipients can choose from three managed care organizations.

Sen. Julie Denton, R-Louisville, said she is "very concerned" about the major changes that will be involved. "We don't know what's going to happen," she said.

A year ago, Passport received a scathing report from state auditor Crit Luallen, who found wasteful spending "and said it had improperly transferred millions of its reserves to the health care provider organizations represented on its board," Loftus reports. After an investigation by Attorney General Jack Conway, those providers paid $26.4 million to pay for the transfers. (Read more)

Move to managed care involves a steep learning curve, patients and providers tell Noelle Hunter of The Morehead News

Patients and providers are "ascending a steep learning curve as they implement Medicaid managed care," reports Noelle Hunter in a two-part series in The Morehead News. Even for a proactive patient, the changeover has its challenges, and vulnerable populations are at risk of falling through the cracks, providers say. For health administrators, it means getting accustomed to three new systems, all of which require pre-authorization before treatment can begin.

The move to managed care, which took place Nov. 1, was intended to fill a $166 million shortfall in the Medicaid budget. Gov. Steve Beshear pushed hard for the switch and estimates it will save the state $1.3 billion in the next three years. Managed care will be handled by four organizations — Kentucky Spirit, CoventryCares, WellCare and Passport — across the state. Passport was already handling the Louisville region.

When the switch took place, Medicaid recipient Mary Jo Long discovered "45 percent of Medicaid recipients were automatically enrolled in Kentucky Spirit," Hunter reports. "None of the doctors (in Rowan County) take Kentucky Spirit," Long said. Discovering this, she waited on hold 30 minutes before being switched to CoventryCares and doesn't "anticipate any problems from here," she said.

While Long was able to navigate the challenge, many patients, particularly those with mental or behavioral health issues, might find it difficult, said Kimberly McClanahan, CEO of Pathways, Inc., a drug or alcohol rehabilitation center. "A lot of our patients are seriously mentally ill and they don't or cannot always pay attention to the information they are getting in the mail about the change," she said. "When they got their first letter about the changes, it was seven pages long. A lot of our consumers just threw it in the trash."

Health administrators are likewise dealing with lengthy forms from managed care organizations. "We've essentially gone from a one-page document to a sometimes 25-30 page document that has to be faxed to the MCOs before any care can be given," said G.R. "Sonny" Jones, chief financial officer at St. Claire Regional Medical Center.

The paper overload stems from the fact that Medicaid patients must be pre-authorized before they can receive any treatment, the likely key to savings in such a system. "I was talking to a case manager who said she spent an hour and 45 minutes on the telephone trying to obtain a pre-authorization," said Charlotte Walker, administrative director for clinical operations at St. Claire.

Moreover, the existing network of providers is not extensive enough, in part because the move to managed care happened in just 120 days, as per the state's directive, "when it usually takes a year or two to develop a satisfactory network," Jones said.

Behavioral health organizations and pharmacies are also experiencing challenges, with some patients not able to access their prescriptions "because each MCO has different prescription formularies," Hunter reports.

Whether the move will indeed save money remains to be seen, administrators say. "In the long run, the financial incentives are there to pay hospitals and providers less," Jones said. "It will make it more difficult for us."

An op-ed piece in the Lexington Herald-Leader indicated likewise. "There will now be four bureaucracies, with each sopping up Medicaid money to pay for the bureaucrats needed to keep track of everything," writes Edward L. Smith, a charter member of Northern Kentucky's Mental Health/Substance Abuse Regional Planning Council. "Where will the money for the bureaucrats come from? From services, of course." (Read more)

To read Part 1 of Noelle Hunter's series Mandatory Medicine, click here. For Part 2, click here.