The Richmond Register

December 11, 2012

State lawmakers grill Medicaid commissioner over late payments

By Ronnie Ellis
CNHI News Service

FRANKFORT — It was almost a tale with two versions.

Kentucky’s Commissioner of Medicaid Services, Lawrence Kissner, seemed pleased to tell the Interim Joint Committee on Health and Welfare how well the state’s move to managed care for most Medicaid patients is progressing.

But Committee Chair Sen. Julie Denton, R-Louisville, and some other lawmakers wanted Kissner to explain why the managed care organizations are so slow in paying providers, especially hospitals who the lawmakers say suffer from long overdue bills to the MCOs.

“The reality is the providers aren’t getting paid,” Sen. Joe Bowen, R-Owensboro, told Kissner. “Their accounts payable are mounting and it’s creating a hardship for all of them, large and small.”

Hospitals and other providers, including local health departments, have complained for months that Kentucky Spirit, Coventry Cares and Wellcare, the three companies serving Medicaid patients outside the Louisville area, are slow to reimburse for services or frequently disallow services.

(Kentucky Spirit has said it will leave Kentucky because it has found serving its members is more expensive than data provided by the state indicated when it contracted to perform services. Kissner said Tuesday the MCO has not yet left, and he anticipates litigation involving the company.)

Kissner told the committee that the state Department of Insurance has found two of the three – Kentucky Spirit and Wellcare – have indeed been slow to make payments and ordered the two to adopt corrective action plans.

Kissner said the cabinet is “actively facilitating meetings (between MCOs and providers) and we have mediated on their behalf.”

Rep. John Will Stacy, D-West Liberty, who owns two pharmacies and who has been critical of the MCOs, said he believes “a correction action plan would be to send (providers) a check.”

“They can’t go for months without being paid or you’re not going to have any providers,” Stacy told Kissner.

The commissioner said the cabinet evaluates the adequacy of coverage for Medicaid patients in each region on a monthly basis.

Denton then asked Kissner what the cabinet intends to do to ensure MCO’s pay reimbursements promptly and to address hospitals’ cost problems when federal law requires them to treat anyone who shows at emergency rooms but whose health problems the MCOs frequently deny as non-emergency.

“Is there a particular reason that you are letting them get away with murder?” Denton asked.

Kissner said the cabinet is following the procedures set forth in statute, that it follows the timelines established by law. He conceded that timeline can take months.

Before the grilling began over late payments, Kissner painted a generally favorable picture of the implementation of managed care which is supposed to save the state about $1.3 billion in Medicaid costs.

“We are on track and under budget,” through five months of the fiscal year, Kissner said. He said he cannot predict the impact the potential departure of Kentucky Spirit on that budget and hinting the state may attempt to hold the company to its contract.

“I think it’s going to become a significant legal issue,” Kissner explained. “They haven’t left yet.”

Kissner showed the committee charts showing the costs for prescription drugs and the number of emergency room admissions have declined since managed care was implemented. The number of patients who show up at emergency rooms multiple times during one month has also declined.

He said he sees no significant problems with implementation of competitive managed care for the Region 3 Louisville area.

That 15-county region was previously served exclusively by Passport for years, but the federal government last year required other MCOs be allowed to compete for contracts in the region.

In addition to Passport three other MCOs – Coventry, Wellcare and Humana – successfully bid to serve the region. Kissner said Coventry, Wellcare and Humana each will get just less than 19 percent of the clients while Passport will serve about 44 percent.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.