Ky. doctors and pharmacists outline 'bureaucratic nightmares' of managed care

02/08/2012 10:24 AM

(UPDATED WITH VIDEO) — The three private managed care companies are delaying payments to doctors and pharmacists and are loading them up with paperwork to the point that one hospital had to get prior approval to deliver a baby, physicians said Wednesday.

Doctors, pharmacists and hospital executives representing medical facilities across Kentucky testified before the Senate Health and Welfare Committee Wednesday morning about ongoing systemic problems they are having with the three managed care organizations hired by the state last fall.

They repeatedly outlined three main problems: that the three managed care companies have imposed cumbersome processes to give permission to treat Medicaid patients; they are frequently denying claims – even of routine procedures and are seemingly inconsistent about which ones they turn down; and they are slow in paying the doctors, pharmacists, dentists and hospitals.

As a result, Medicaid services to Kentucky’s poor and disabled are suffering and doctors and hospitals are getting financially squeezed, according to testimony after testimony.

Dr. Shawn Jones, president of the Kentucky Medical Association, said the managed care organizations have created “cumbersome and I’ll argue dysfunctional pre-authorization of procedures or medication” and have been resistant to easing those requirements after repeated meetings.

“This bureaucratic nightmare has to change,” he said.

The state’s Medicaid program engaged in contracts starting Nov. 1 with three managed care organizations owned by out-of-state providers: Kentucky Spirit Health Plan, CoventryCares of Kentucky and WellCare of Kentucky.

Gov. Steve Beshear championed the move as a way to save hundreds of millions of dollars over the coming years in the $6 billion dollar-a-year Medicaid program that serves more than 820,000 Kentuckians.

“It appears to me the only place the savings can come from is denying or delaying care,” said Jones, an ear, nose and throat surgeon from Paducah.

While representatives from the managed care organizations didn’t testify, the acting Medicaid commissioner did. Neville Wise, who has been in charge of the agency for more than a year, said he believes the issues are just temporary bumps that can be ironed out.

The committee’s chairwoman, Sen. Julie Denton, R-Louisville, repeatedly asked the doctors, pharmacists and hospital executives which managed care provider was the most responsive and easiest to deal with. In each case, the answers were different.

Kentucky Spirit seemed to do better working with pharmacists and mental health facilities but was most problematic for doctors and hospitals.

WellCare was cited by several medical officials for being particularly slow in paying claims.

And prior authorization problems were common across the board.

In one instance, a 16-year-old girl was admitted into the Rivendell Behavioral Health Services Center in Bowling Green after taking 80 pills to try to kill herself.

“She’s still suicidal. She is a very, very pitiful situation, if you don’t mind me saying,” said Janice Richardson, Rivendell’s CEO. The claim was “denied within 30 seconds of prior authorization and they won’t take any additional information.”

In another instance, a managed care company accused the facility of “monkeying around with your treatment” by keeping a child in the facility when just 24-hours earlier, the boy had attacked staff and another patient.

In one Eastern Kentucky hospital, Coventry required prior authorization for the hospital to help a woman give birth.

“Fourteen days later mom and baby were home doing fine, and we still hadn’t received payment,” said Joe Grossman, chief financial officer for Appalachian Regional HealthCare that operates eight hospitals in Eastern Kentucky.

Denton, sounding stunned, asked to clarify that Coventry really required the hospital to ask permission to deliver the baby. “Telling her to hold it isn’t going to work,” she said.

“She complied as best she could,” Grossman responded.

It’s not as if the managed care model can’t work, as Sen. Joe Bowen, R-Owensboro, pointed out in his questioning.

Hospital representatives praised the Passport System, which serves Louisville and its surrounding area. It has been managing Medicaid services to patients in that area for more than a decade. But the system was set up as a non-profit organization formed by three Kentucky hospitals, including the University of Louisville Hospital.

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