Managed Care Woes Plague Kentucky Medicaid

February 15, 2012

Kentucky officials have gotten an earful from providers about problems with a Medicaid managed care (MMC) that was rolled out last fall.

Excessive requests for documentation, slow approvals for treatment, and slow or no payment of claims were some of the issues that providers related to legislators at a recent hearing. 

The problems began November 1 when the state contracted with three managed care companies to provide services to the entire state with the exception of Louisville and Jefferson County.

The move was part of a plan by Kentucky Governor Steve Beshear to cut costs from the state's $6 billion Medicaid program.

Payments are so slow in coming that some providers have had to take out loans to make payroll.

"I feel like I am a bank for these out-of-state insurance companies," testified Joe Grossman, vice president and CFO of Appalachian Regional Health Care. 

The testimony was not the first reports of trouble in Kentucky's MMC program. In December the Medicaid Management Committee heard of similar troubles, especially about preauthorizations for treatment.

Earlier this month, the Office of the State Auditor requested that the MMC companies provide data on claims payment and rejected claims by February 17. 

In one particular case, officials with Appalachian Regional were told that they would need preauthorization before a patient gave birth if they wanted to be reimbursed.

"Telling her to hold it isn't going to work," offered committee chairwoman Julie Denton, R-Louisville.

"She complied as best she could," Grossman deadpanned. 

Two weeks after mom and the baby had left the hospital, the hospital was still awaiting approval for the delivery. 

Other problems involved the length of stay for psychiatric care, where approval of too-short stays led to a number of readmissions. In other cases, medications were changed because insurers wouldn't approve those that had been prescribed. 

Providers said that the preauthorization situation had improved some in recent weeks, but that there were still problems, especially with slow payment of claims.

The state's acting Medicaid commissioner, Neville Wise, testified that the companies are no longer requiring preauthorization for births and Caesarian sections. 

Wise said that Medicaid officials were working with insurers on a number of the issues raised.