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)

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