Kentucky re-bidding Medicaid managed care contracts to address complaints of patients, advocates and health-care providers

By Melissa Patrick
Kentucky Health News

State officials are re-bidding Medicaid managed-care contracts that cover more than 1.1 million Kentuckians. The news came as a delight and surprise to many health-care providers and patient advocates.

“I was both stunned and thrilled by the announcement. I did not know it was coming,” Sheila Schuster, a Louisville mental-health advocate, told Tom Loftus of The Courier-Journal. “A number of the changes that they say will be part of the new contracts are things those of us in the behavioral health community have brought up time and time again.”

Kentucky changed to Medicaid managed care from a traditional fee-for-service model in 2011 to fill a projected budget overrun of $166 million. Health Secretary Audrey Haynes said in a news release that doing so has “saved Kentucky taxpayers more than $1.3 billion in state and federal funds” and had also improved the delivery of health care to the Medicaid population.

“However, after several years of experience, we determined it was time to retool, rebid and strengthen the contracts to appropriately address concerns expressed by advocates and healthcare providers,” Haynes said.

The transition to managed care has been met with consistent complaints from both patients and providers, despite efforts of the cabinet to work through the issues and keep the channels of communication open between providers, the cabinet and the managed-care organizations.

Two passionately debated bills in the recent legislative session challenged some practices of the current MCOs: one seeking an appeals process for denial of payments and the other removing a cap of “triage fees” for emergency-room services that MCOs later deem not to be emergencies.

Both issues have been challenging to the financial health of rural hospitals. State Auditor Adam Edelen addressed many such issues in a recent report on the financial health of rural hospitals.

“We are pleased to see the cabinet taking steps to improve and strengthen managed care contracts, many of which we recommended in our recent report on the financial strength of rural hospitals,”Edelen told Insider Louisville.

Some requirements for the new contracts include: required statewide coverage; standardized rules among the MCOs; improved administrative processes; increased oversight of claim denials; continued expansion of behavioral health services; incentives for MCOs to work with Medicaid patients to decrease emergency-room use and improve their health; and increased penalties to assure contract compliance. Click here for the Cabinet for Health and Family Services‘ complete Request for Proposal.

“I’d like to say that they heard the voice of the people,” Schuster told Insider Louisville.“If you look at the Medicaid Advisory Council, those meeting are every two months and it’s the same litany of complaints and concerns every darned time with no response. The only thing I can think of is it’s a gesture by this outgoing administration to get things right so that regardless of who comes in next year, there are strong contracts in place. I applaud them for it, and I’m stunned.”

The current contracts with Anthem, Aetna’s Coventry Cares, Humana’s CareSource , Passport and Wellcare expire on June 30, 2015 and proposals for the new contracts are due by May 5. The statewide contracts will be awarded to multiple MCOs for a one-year period with four, one-year renewal option, according to the news release.

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