Health care providers say Medicaid managed care riddled with problems

bmusgrave@herald-leader.comFebruary 8, 2012 

State Sen. Julie Denton, R-Louisville


FRANKFORT — The baby was coming, no matter what a managed care company had to say.

But when a woman in labor went to one of Appalachian Regional Healthcare's eight Kentucky hospitals before Christmas, the hospital was told by one of three managed care companies that now run Medicaid in much of Kentucky that it must get preauthorization to deliver the baby in order to get paid.

Fourteen days after the woman and baby went home, the hospital still was waiting for approval to deliver the baby, said Joe Grossman, vice president and chief financial officer of Appalachian Regional Healthcare.

Grossman was one of several people to testify Wednesday before a Senate panel about problems with private companies that are now managing Medicaid care in Kentucky.

Hospitals, doctors, dentists and mental health providers told the Senate Health and Welfare Committee that the state's switch to managed care on Nov. 1 has meant delayed payments and complicated preapproval processes that have delayed treatment.

Some health care providers have had to get loans to pay their staffs because the managed care companies haven't paid claims.

"I feel like I am a bank for these out-of-state insurance companies," Grossman said.

Committee chairwoman Julie Denton, R-Louisville, said Wednesday's meeting was a forum for providers to air their concerns and complaints about managed care. Next week, the managed care companies will testify about how they are addressing some of the problems.

The meeting came more than 100 days after the state switched 560,000 Medicaid patients to managed care, a move that was designed to save the state hundreds of millions of dollars over the next three years. The state contracted with three companies — Coventry Cares, Kentucky Spirit and WellCare of Kentucky — to manage Medicaid services outside of the Louisville area.

Health care providers told lawmakers that the companies have gotten better at resolving payment and preapproval issues in recent weeks, but there are ongoing, systematic problems.

Janice Richardson, chief executive officer of Rivendell Behavioral Health Services in Bowling Green, told the committee that the psychiatric facility for teens has seen inpatient stays increase by 30 percent. The managed care companies are not allowing patients to stay long enough to be stabilized, so the patients return more frequently but for fewer days at a time, she said.

Richardson said the company has yet to receive about $2 million in outstanding claims payments.

Also, mental health patients who are being treated successfully have been told they must use different medications that are approved by the managed care companies. The medication switches have created a lot of problems for people with serious mental illness, advocates said.

"People who have been stabilized on medications for some time are not able to get the medications they were on," said Kelly Gunning, operations director for NAMI Lexington, an advocacy group for people with mental illness.

Last week, Gunning heard from a woman whose mother has deteriorated after being forced to change anti-psychotic medication because her managed care organization won't pay for her previous medicine.

"They changed it, and she became very ill rather quickly," Gunning said in an interview earlier this week. "The new anti-psychotic that was approved by the MCO did not work for her."

Richardson said many in the mental health community think that if something is not done soon, "somebody is going to get hurt."

Nancy Galvani, senior vice president of the Kentucky Hospital Association, said some hospitals are waiting for millions of dollars in claims to be paid. Dr. Shawn Jones, president of the Kentucky Medical Association, said managed care companies are not following Medicaid regulations or state statutes that say pre-authorization for certain procedures must be granted within two days.

Providers also told the committee that managed care companies are asking for reams of information before approving a procedure or treatment. Jones said commercial insurance companies do not ask for that much detail for pre-approval.

"This is overkill," Jones said.

Steve Shannon, director of the Kentucky Association of Regional Mental Health Mental Retardation programs, said he hoped that the problems would be ironed out soon and that the managed care companies weren't trying to delay payments to make money.

"This is a really great strategy not to spend dollars," Shannon said of delayed payments. "I've been assured that is not the case."

Neville Wise, acting commissioner for Medicaid, told the committee that some problems stem from the fact that pre-approval is new in the Medicaid system. The managed care companies are no longer requiring pre-approval for births and Caesarean sections, Wise said.

He said state officials are working with managed care companies on other issues mentioned Wednesday. Wise said he would return next week to discuss some of those issues when the companies testify.

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