Eastern Kentucky’s largest healthcare provider is suing the state and two major managed care operators (MCO) for failing to manage the new privatized Medicaid system. Appalachian Regional Healthcare, which provides a majority of the healthcare services to eastern Kentucky (locations noted on map), may soon lack adequate protection against high medical costs.
Kentucky Spirit and CoventryCares, both of which are named in two separate complaints, manage Medicaid payments and are among four MCOs that handle the previously state-run system. In November, Kentucky privatized its Medicaid program despite concerns that contracts between healthcare providers and the MCOs were not in place.
Appalachian Regional alleges there are several deficiencies in the new system including delayed reimbursement payments to healthcare providers. The lawsuit challenges that the state is not fulfilling its federal duty to provide adequate coverage to the region.
Officials for Coventry Heath reject the allegations. In an email to WFPL last week they write: “It’s unfortunate that ARH felt the need to sue because there are no merits to the claims against Coventry.
In the rush to privatize Medicaid, the state gave the MCOs permission to not fully reimburse doctors who are considered out of a patient’s network, said Kentucky’s former Medicaid commissioner Shannon Turner.
“They’ve taken a very controversial and rather unusual stance that these rules don’t apply to the managed care companies,” she said.
Because the MCOs only signed letters of intent, the state is allowing MCOs some provisions from normal insurance code.
“Arguably they do get to make that interpretation and part of what these lawsuits actually are challenging is that very interpretation,” said Turner.
Cabinet for Health and Family officials said many of claims have been resolved and Gov. Steve Beshear told WFPL he’s certain that the issues will be worked out.
“The court will take care of those issues. But this is going to work. I mean, long term these managed care contracts are going to work. People are going to get the quality services that they’re getting right now, they’re going to continue to get those and we’re going to save a lot of money in the process,” he said.
According to the lawsuit, CoventryCares told Appalachian Regional it was no longer interested in negotiating a new contract to reimburse Medicaid claims beyond May 4.