Four years in, Medicaid Managed Care has improved but issues between MCOs and providers persist

08/13/2015 03:38 PM

FRANKFORT — Kentucky’s Medicaid Managed Care system has experienced profound growing pains since its implementation four years ago, but Cabinet for Health and Family Services officials assured a legislative panel Thursday that the state is taking steps to resolve disputes between medical providers and managed care organizations.

Providers like Sen. Danny Carroll, chief executive officer of Easter Seals West Kentucky, which provides care for disabled adults and youths, have complained of delayed or denied Medicaid payments and a morass of bureaucratic hurdles to clear for each MCO.

Lisa Lee, commissioner of the Department for Medicaid Services, said the state has attempted to resolve many criticisms aired by providers in new MCO contracts approved July 1, which included provisions such as requiring standardized forms for all five managed care groups, utilizing national uniform standards to credential health professionals and adding stiffer penalties for non-compliance.

The cabinet, Lee said, has facilitated meetings between MCOs and providers in order to iron out differences between the two sides.

MCOs now care for more than 1.1 million of the state’s nearly 1.3 million Medicaid recipients, according to CHFS figures, and Lee noted that the system that began in 2011 has achieved a primary goal of cutting $1.3 billion from Kentucky’s Medicaid budget.

“We do serve 1.2 million members and we have thousands of providers, and I know that we do have some issues and when we have those issues they seem to be bigger than what they are because we had, for example, when the managed care organizations came into the state, we had almost 200 children being served in out-of-state because we did not have the care available to them in the state,” she said.

“Today we have one child in an out-of-state facility. That means those children have been brought back into Kentucky, they’re close to their families, and they’re being served closer to home and that they can be reunited with their families much sooner than they would have.”

But Carroll, a Paducah Republican who chaired Thursday’s meeting, said he and others in his district have been flummoxed by MCOs.

One physician in his district had to seek loans to cover payroll for two months and had one MCO, WellCare of Kentucky, discontinuing prescriptions for an attention deficit hyperactivity disorder drug called Vyvanse, Carroll said. The doctor had been the principal investigator in 19 double-blind clinical trials testing Vyvanse, which the physician had prescribed to some 250 children, according to Carroll.

Lee said WellCare has agreed to a two-month grandfather period for Vyvanse prescription recipients, and the replacement drug for new patients “will be of the exact same quality,” she added.

He and others on the panel complimented the cabinet for its work to resolve issues between providers and MCOs, with Carroll saying he wished the state would take greater oversight of MCOs.

“Their efforts to standardize the MCOs I think is a step in the right direction,” Carroll said after the meeting. “As a provider it’s very frustrating trying to navigate the rules of all the different MCOs and all the different requirements, and it’s taxing on staff, it costs more money. In our particular case being a nonprofit, we need those funds to operate, and we’re having to focus more and more on how to navigate the system to get prior authorizations approved. One MCO requires a prior authorization every 60 days. Some it’s longer, and the rules have changed fairly frequently over the last few years.”

When asked about any potential resolutions from his perspective, Carroll said he wished he knew the answer before suggesting revisiting Gov. Steve Beshear’s decision to expand Medicaid eligibility under the Affordable Care Act “and the hundreds of thousands, millions of dollars it’s going to cost our state as the federal dollars start declining.”

The physician Carroll referenced in his testimony “has focused his career on serving those who are indigent for the most part.”

“He’s done everything he can to provide those services and been an excellent Medicaid provider, and because of the reduction that other physicians, the numbers they’re taking as far as Medicaid patients, his percentage has gone from 35 percent Medicaid patients to 45 percent, and as I mentioned in the meeting for the last two months he’s had to borrow money to make payroll,” Carroll said. “So you tell me, is the system working under those circumstances?”

Lee also touched on the potential economic impact of Medicaid expansion, which has been funded 100 percent by the federal government to this point.

The state will begin paying a portion of expansion expenses in fiscal year 2017, when the federal government will cover 95 percent of the expansion’s costs. Ultimately, Kentucky will be responsible for 10 percent of expansion costs by fiscal year 2020, if the new eligibility standards continue in the next gubernatorial administration.

The Feds have spent approximately $2 billion on the newly eligible in Kentucky, Lee said.

“I do believe that that $2 billion that has been going out into the economy has been very positive because we know that a dollar’s not spent once,” she said. “The Medicaid program pays the providers, the providers pay their employees, their employees go to the grocery store, they go spent that money in other ways out into our economy.”

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.


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