Beshear vetoes prompt-pay bill but takes several steps to address problems in Medicaid; he and Haynes say it’s working

Gov. Steve Beshear has vetoed the bill designed to make Medicaid managed-care firms pay health-care providers more quickly, but is taking administrative steps to address the issue.

Beshear said he agreed with the intent of House Bill 5 but it might have interfered with the contractual relationship between the state and the four managed-care companies. The bill would have subjected that relationship to the state Department
of Insurance
‘s review and investigation process for private-insurance payment complaints. 

“That language would have resulted in
excessive costs for state government and taxpayers due to the expansion of the
review process beyond the current parameters used for private
insurance,” Beshear’s office said in a press release.

Instead, Beshear ordered the department to take over responsibility for review of
prompt-payment complaints from the Department for Medicaid Services. “If improper payment practices are
discovered, DOI can impose sanctions,” the release said. He also ordered the department to audit each of the managed-care firms operating statewide –
Wellcare, Coventry Cares, and Kentucky Spirit – at their cost.

Meanwhile, the firms have agreed to meet with every hospital they have under contract to reconcile outstanding accounts.  “This effort will begin
immediately and continue until every hospital’s accounts receivable has been
reconciled,” the release said.  “The results will . . . be made public, in order to provide transparency and accountability.” The firms have  agreed to meet with any other provider who wants a meeting.

Also, the Cabinet for Health and Family Services will hold eight regional forums for providers, managed-care firms, and Insurance Department representatives to discuss concerns and how to improve the system. Part of this effort will focus on “emergency room management that meets community needs without an ER
operating as a de facto primary-care office,” the release said. “A key component of controlling
costs and improving health in a healthcare system is to provide the right
treatment in the most cost-effective setting.”

CHFS Secretary Audrey Tayse Haynes said the switch to managed care, made in November 2011, is working. “We are already seeing a tremendous increase in the use of preventive services, which improve health-care outcomes, while also reducing the enormous costs for treating chronic health conditions” such as diabetes-related amputations, she said.

Beshear said his plan would solve “lingering implementation problems” with managed care “while preserving the significant improvements in patient care and health care cost savings.”

“Getting our people healthy and keeping them that way
is not just good health policy, it’s good economics,” Beshear said. “That’s why we will
never return to the old fee-for-service system.  This is a significant
cultural shift in medical care that has already happened across the country in
both the private insurance market and in the Medicaid system.”
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