Health officials laud Medicaid expansion while lawmakers question cost, MCOs

06/17/2015 11:00 PM

FRANKFORT — After hearing from state health officials on the benefits of expanding Medicaid eligibility, lawmakers questioned future costs to cover the newly eligible as well as the effectiveness of a program in which some health-care providers go several months without full reimbursements.

Cabinet for Health and Family Services Secretary Audrey Haynes and Department for Medicaid Services Commissioner Lisa Lee testified before the Medicaid Oversight and Advisory Committee Wednesday, telling legislators that expanded Medicaid coverage has not only drastically reduced the state’s uninsured rates, but also provided numerous preventative health screenings.

For instance, 80,000 expanded Medicaid recipients visited the distance in 2014 and another 46,000 were screened for diabetes, according to figures presented Wednesday.

The number of enrollees under expanded Medicaid, an optional component of the Affordable Care Act in which the federal government covers all costs until it ratchets down its share to 95 percent in 2017 and eventually hits 90 percent in 2020, declined for the first time ever in May, Haynes said, noting myriad factors could be at play.

“I would have to make a few assumptions here,” Haynes said. “Our unemployment is at record lows for the first time in a very, very long time, and so people are working and possibly some of these folks have gone to kynect to get a qualified health plan, which was the goal. Some people probably moved out of state.

“I mean, there’s any number of reasons. Some people are working for someone where their employer is self-insured.”

The federal government is covering expenses for the Medicaid expansion until fiscal year 2017, and lawmakers are projected to appropriate some $247.6 million to pay the state’s share of the newly eligible in next year’s biennial budget session, according to an analysis conducted by Deloitte for Gov. Steve Beshear’s administration.

Sen. Ralph Alvarado, co-chairman of the advisory board, noted that Deloitte anticipates Medicaid expansion will net $375.1 million in savings but cost $419.9 million in fiscal year 2021, the second year the state’s share of expanded Medicaid hits 10 percent.

Consultants with Deloitte pegged the overall negative impact in 2021 at $44.8 million, according to the report, which also shows a cumulative positive impact of $819.6 million from fiscal year 2014 through 2021.

“That’s a major concern,” said Alvarado, R-Winchester. “I mean, five years down the line, I know that seems like a way long ways off and some of you may no longer even be in the position to deal with it, but some of us probably will and the taxpayers will.”

Haynes, however, said budget projections can change in a few years.

“Now that we’re seeing the lowest unemployment that we’ve seen in our state in quite a number of years, I’m sure each of you are amazed at how that we’ve had all 120 counties in our state where the unemployment rate has gone down,” she said. “… As this state continues to generate revenue and hopefully, as is planned, this is a bridge program for people who basically are hard-working people, but their employer does not provide insurance or they have children and therefore that qualifies them from an income basis for Medicaid.”

Committee talk segued to concerns about Medicaid managed care, with Alvarado reading segments of letters from providers who have not received full reimbursements from managed care organizations.

Alvarado, a physician, read a letter from one provider, Pathology and Cytology Laboratories in Lexington, which said it had not received correct Medicaid payments from Kentucky Spirit in 18 months, WellCare for two and a half years and Coventry Cares ever.

The payment issue has caused some providers to consider dropping Medicaid recipients from their patient rolls, he said.

Rep. David Watkins, a retired doctor and co-chairman of the committee, urged the panel to find ways to improve managed care.

“I think we do need to have the MCOs here,” said Watkins, D-Henderson. “I would like to talk to them, personally. I have some questions for them because I’m not totally satisfied that they’re doing quite as good a job as your report here would portray.

“I think they need to be more accountable. I think they need to be more responsive to the providers who actually are doing work in the field.”

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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