Kentucky Spirit leaves the state; cabinet assigns company’s clients to other Medicaid managed-care firms

By Molly Burchett
Kentucky Health News

About 125,000 Medicaid patients in Kentucky have a new insurance company, with Saturday’s departure of Kentucky Spirit from the state.

The state Cabinet for Health and Family Services reassigned Kentucky Spirit’s clients to Coventry Cares or WellCare, and sent letters to the clients last week notifying them of the reassignment. They will have 90 days to change companies if they are not satisfied with their new one.

The letters were conditional, because the state was still in a legal battle trying to keep the company in the state for two more months. Cabinet officials told Beth Musgrave of the Lexington Herald-Leader that Kentucky Spirit stopped serving Kentucky clients shortly after midnight Saturday, and that the cabinet will file a lawsuit seeking damages because Kentucky Spirit breached its three-year contract that began in 2011. “If successful, the state could win millions of dollars from Kentucky Spirit, a subsidiary of St. Louis-based Centene Corp.,” Musgrave notes. The company alleges that it lost money because the state gave it incomplete information.

“We are staffed up and as prepared as we can be,” said Michael Murphy, CEO of CoventryCares, in an interview with Kentucky Health News Wednesday. He said the company is planning to take on about 67,000 new members from Kentucky Spirit, and will cover them according to our existing contract with the state.

One of the biggest challenges will be coordinating transition efforts with pharmacies, because the state was unable to give Coventry the Centene data until the company actually left Kentucky, said Murphy. “We expect there to be a fair amount of confusion and chaos, he said, but CoventryCares is automatically authorizing a 3-day supply of medications while the systems get updated with new member information.”

Cabinet spokeswoman Jill Midkiff said, “While we are disappointed that Kentucky Spirit has defaulted on its
contract with the state and abandoned its members, both Coventry Cares
and WellCare have agreed to work closely with the cabinet, providers and
members to make this transition as smooth as possible.”

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