Kentucky's Medicaid contractors say they're paying claims faster

bmusgrave@herald-leader.comFebruary 15, 2012 

FRANKFORT — Executives of three private companies that manage care for 560,000 Kentucky Medicaid recipients said Wednesday that they are paying health care providers more promptly and expect to have problems with pre-authorization for services worked out soon.

Doctors, pharmacists, hospitals, dentists, hospice care and other health care providers have complained repeatedly to legislators that Coventry Cares, WellCare of Kentucky and Kentucky Spirit have been months behind in payments and have a cumbersome and lengthy pre-approval process for medical procedures.

The state moved to managed care on Nov. 1 as a way to save hundreds of millions of dollars over the next several years.

Executives with the three companies told the Senate Health and Welfare Committee that they have expedited claims payments and have offered up-front payments to some providers who are experiencing cash-flow problems. Some smaller health care providers have warned that they might have to close because of repeated delays in payments.

Coventry has brought in additional staff from its other locations to speed up claims payments, said Kevin Conlin, executive vice president of Coventry. Seventy people worked this weekend to cut down on the backlog of claims payments, he said.

Coventry is on track to pay all problem-free claims by the end of this week, Conlin said. The company also is working diligently to cut down on the amount of time it takes to approve or deny a pre-authorization for treatment.

"We've literally doubled our staff," Conlin said of the number of doctors and nurses who can grant pre-approvals.

He and other executives said the delayed payments and pre-authorizations are not an effort to make additional money. The three companies are paid a set fee per patient regardless of what services that patient needs.

"Our business model is not to deliberately withhold payment," Conlin told the committee.

Mike Minor, state plan president for WellCare of Kentucky, said the companies have to pay interest on late payments to providers. It is not good business practice to delay those payments, Minor said.

Minor and other executives said one of the biggest problems with the switch to managed care has been with third-party billing companies that have had problems submitting claims to the three companies. Complicating matters further, Medicaid changed some of its forms on Jan. 1, which means some third-party billing companies did not have the correct billing codes or information in their computer systems.

Some health care providers have called the managed care companies to say that they have more than 60 outstanding claims, only to find out that the provider's third-party billing service had submitted half of the claims. Ironing out those problems has taken time, Minor said.

"It's not the provider's fault and it's not our fault," Minor said of some of the billing problems. "They do take investigative work to sort out, and sometimes it's on a case-by-case basis."

Marty White, vice president of external affairs of Kentucky Spirit, said the organization is working case by case basis to resolve some of the billing problems that have delayed payments to providers.

"We are paying claims," White said. "Our members are receiving services."

Overall, White said, managed care has helped Medicaid patients. For example, his company found a Medicaid patient who was taking 28 medicines, eight of which were not to be taken at the same time as one or more of the other medicines.

Yet, problems persist, said Kip Bowmar, executive director of the Kentucky Home Health Association.

A survey of home health care providers showed that only about 5 percent of total claims had been paid by the managed care companies at the end of January, Bowmar said.

Some agencies have said they are due more than $1 million from the managed care companies.

"It is causing dramatic cash-flow issues," Bowmar said.

He said the agencies were told by the Department of Medicaid and the three managed care companies to continue serving Medicaid patients during the transition to managed care.

"It is now time for the good faith to operate in both directions," Bowmar said.

Sen. Tom Buford, R-Nicholasville, asked the companies to rectify the problems quickly. Health care providers are angry and turning to legislators for answers. And there is nothing that legislators can do, Buford said.

"All I am saying is, please get this done," Buford said. "'When they haven't been paid for a month, they show up at our house."

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