Published: August 14, 2008 09:18 pm      

Hospital sues state in Medicaid payment dispute

Pattie A. Clay Regional Medical Center filed suit Tuesday against the Kentucky Cabinet for Health and Family Services alleging it has been underpaid for treating Medicaid patients for the past five years.

Since the cabinet implemented a new reimbursement plan in April 2003, the suit claims the Richmond hospital has received only about 63 percent of its allowable costs for treating Medicaid patients.

In 1995, a federal court upheld the state’s reimbursement scale that paid 93 to 96 percent of a hospital’s Medicaid costs, according to the lawsuit.

The hospital’s brief states Medicaid payments represent 21 percent of the its patient revenue, but does not reveal how much money is at stake.

Pattie A. Clay went to court, the suit states, only after the cabinet had repeatedly rejected, and at times ignored, its administrative appeals. The last appeal was turned down July 14.

Even as Pattie A. Clay’s appeals were rejected, the hospital’s suit claims, the cabinet reached settlements with other hospitals, including Pikeville Medical Center and Central Baptist of Lexington, which had filed similar appeals.

In recent years, according to the suit, Kentucky courts have upheld appeals of other hospitals whose reimbursements were not as low as those currently being paid to Pattie A. Clay.

The Richmond hospital’s treatment, the suit claims, violates state statutes and the cabinet’s own regulations as well as federal law.

The suit quotes the federal statute creating the Medicaid program as calling for reimbursements “consistent with efficiency, economy and quality of care, sufficient to enlist enough providers so that care and services are available.”

In the suit, Pattie A. Clay calls its operations efficient and economical, but provides no details or comparisons.

The suit, filed in Madison Circuit Court, seeks reimbursement to the hospital for the alleged under payments and an order blocking the cabinet from future reimbursements that do not conform to what it calls accepted public policy.

Vikki Franklin, the cabinet’s chief public information officer, said it makes no comments on pending litigation.

By press time, Pattie A. Clay administrator Bob Hudson had not responded to a voice mail message left for him Thursday afternoon.



Bill Robinson can be reached at brobinson@richmondregister.com or 623-1669, Ext. 267.