State settles dispute with former Medicaid managed-care company, will get $7.5 million from former actuarial firm
Centene said in a press release, “Kentucky Spirit will receive an immaterial cash payment from the
Commonwealth’s actuarial firm and each party will dismiss all claims
related to the litigation with prejudice,” meaning that it cannot be refiled.
The amount of the payment was not disclosed. It will come from PriceWaterhouse Coopers, which was the state’s Medicaid actuary until 2014. The state will get $7.5 million from the firm in return for dismissing its claims against it, said Doug Hogan, spokesman for the state Cabinet for Health and Family Services.
Last year, the cabinet “ruled that the insurer owed the commonwealth $40 million plus prejudgment interest,” Erica Teichert reports for Modern Healthcare. Kentucky Spirit had made $110 million in claims against the state, Hogan wroite.
“So, the Commonwealth will get out of this litigation
receiving $7.5 million and without making any payment to any party as a result
of the settlement,” he wrote. “This settlement will save the Commonwealth hundreds of
thousands of dollars in attorney fees and expenses. Based on the
potential liability in this case and potential burden to taxpayers, and the
significant litigation expenses associated with this case, this is an excellent
outcome for the Commonwealth of Kentucky.”
The Centene release added, “In addition, the parties agree
that neither party acted in bad faith, that they took reasonable
positions in light of the applicable contractual language and that the
parties acted in good faith in attempting to address a difficult
The release thanked Gov. Matt Bevin “for taking the initiative to resolve this longstanding issue.”