HAZARD — Officials with Appalachian Regional Healthcare and Coventry Cares, one of four state-contracted Medicaid managed care providers, announced an agreement on Friday that will maintain Coventry’s Medicaid services at ARH’s facilities until at least June 30.
The announcement was made following a hearing in federal court which “went well,” according to Jill Midkiff, director of communications for the Cabinet for Health and Family Services.
If, by June 30, Coventry and ARH are unable to come to a resolution, the state will open enrollment for Coventry’s members and allow them to switch providers if they choose, in order to continue receiving care at ARH facilities.
ARH filed a lawsuit against Coventry and the state last month, claiming that the MCO was not properly paying Medicaid reimbursements. Coventry had notified the hospital chain prior to the suit that they would drop their contract with ARH, effective May 4.
Coventry claims that the state held another MCO to a different standard, and allowed that company to exclude the ARH chain from its network, in effect leaving Coventry to pick up those Medicaid patients who are by and large higher risk, and thus higher cost. Additionally, Coventry claims, the state failed to implement a risk adjustment program that would compensate MCOs that take on higher numbers of high-risk patients.
But Friday’s announcement ensures that Medicaid services for Coventry members will continue through June 30 as ARH and Coventry continue to negotiate a resolution in the ongoing dispute.
Rick King, lead legal counsel for ARH, told the Herald earlier this week that there had been little movement from the state to join the negotiations, adding that “the biggest problem we’re having right now is the Cabinet still maintains that they really don’t have any responsibility to negotiate anything.”
King added that had Coventry been allowed to drop their contract as planned on May 4, it would have meant longer travel times for patients who would be forced to seek care elsewhere, and also a loss of 400 jobs because of the lack of revenue.
Midkiff noted that while the Cabinet works to ensure that Kentuckians have access to health care in the state’s rural communities, the Cabinet does not negotiate contracts between the providers and the MCOs.
“Provider agreements are negotiated between MCOs and providers – CHFS cannot dictate which providers contract with which MCOs,” Midkiff said. “Since managed care was implemented on Nov. 1, the Cabinet for Health and Family Services has worked closely with the three MCOs and the provider community to resolve claims payments, as well as other issues.”
While the announcement will ensure Medicaid services at ARH for another two months, it also negates the necessity of a planned march on Frankfort, noted state Sen. Brandon Smith, of Hazard.
Smith told the Herald on Friday that members of his district, which is comprised of Perry, Leslie, Harlan and Bell Counties, were organized and ready to travel to Frankfort on Monday in an attempt to bring to the attention of Gov. Beshear the issues being faced in these communities in regard to managed care. But after the settlement reached on Friday, he said, the attention should be shifted.
“There is no need now in having to pull people out of their work schedules and kids out of school to do all that,” he said, “when we’ve got their concession so far, we’ve got the attention that they deserve.”
But Smith added that despite the agreement, the issue of Medicaid managed care in Kentucky will likely need legislative review in the future, especially the overarching issue of providers not being reimbursed for Medicaid services.
“I’ve got groups in my district out there, doctor and dentists, they’re not getting paid,” Smith added. “That’s going to be the next focus of where this is going.”
Here in Perry County, in fact, some health care services from EMS to the district health department are seeing a decline in Medicaid payments since the state switched to managed care.
The Kentucky River District Health Department’s board of directors called a special meeting to order on Friday where they voted to accept quarterly taxing funds early in order to pay bills on time. Karen Cooper, the health department’s director, said she was hopeful that Medicaid reimbursements would have come in by this week, but when that didn’t happen it necessitated the need to call Friday’s meeting.
“That didn’t happen, so we have some bills that really, we have to get paid,” she said.
Cooper noted that since the state moved to a managed care program last November, only one of the managed care organizations has consistently paid Medicaid reimbursements, and that was Coventry Cares to the tune of $420,000. WellCare, a second MCO, paid a lump sum of $130,000 in that time, while the third company, Kentucky Spirit, has yet to pay anything, Cooper noted.
The district was anticipating payments of $250,000 from Kentucky Spirit and an additional $130,000 from WellCare, though that money had not been received as of Friday.
To put the district’s financial woes in perspective, Cooper noted, in November 2011 alone, the district received $528,000 from traditional Medicaid, but since the managed care program began six months ago the district has received roughly $500,000 in total in Medicaid reimbursements.
“It’s really a cash flow issue,” Cooper said. “Our people are doing the services. We’ve done the services, they’re out there, but we just can’t get payment.”
From what she understands, Cooper said she believes their lack of payments have been caused by an error somewhere within the system.
“I think at this point, our biggest problem is that it’s a system error,” she said. “There is something going on with the payment system.”
There have apparently been no answers, however, as to why some payments have not been received at the Perry County Ambulance Authority in Hazard, where Medicaid accounts for about 20 percent of the service’s budget. Director Matthew Couch said since the state’s managed care model went into effect, his EMS service has had issues with each of the three MCOs contracted with the state to provide Medicaid reimbursements.
Couch said the service has several billings dating back to November which have yet to be paid for. Many of those billings, he added, were with Coventry Cares.
“They’re not upholding to their contractual agreements,” Couch said. “There are certain things that they are supposed to pay for, and they’re just not doing it.”
Much of those missing payments lie with non-emergency services, such as transporting patients to the doctor’s office, or to their homes from the hospital. Couch said the MCOs are requiring them to obtain preauthorization numbers, and they are doing that, yet they still aren’t getting paid. Prior to the state’s move to managed care in November, Couch noted, the ambulance service had no to little trouble with Medicaid reimbursements.
Not everyone is having those kinds of troubles with managed care, however. Barry Martin, operator of the Primary Care Centers of Eastern Kentucky, noted that there were some initial issues with MCOs when the state switched to managed care, by and large those issues have decreased in number. He said working with the MCOs, which are for-profit companies, has not been much different than working with other insurance companies, such as Anthem of Humana.
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