ARH hospital chain seeks emergency injunction against Medicaid contractor

bestep@herald-leader.comvhoneycutt@herald-leader.comMay 1, 2012 

A hospital chain serving Eastern Kentucky is seeking an emergency order to avoid disruptions to patients and widespread layoffs it says will occur in the state's poorest region unless a judge intervenes.

Attorneys for Appalachian Regional Healthcare on Tuesday asked a federal judge to issue an injunction ordering Coventry Cares to let its members continue to receive services through the hospital chain.

Coventry Cares is one of three companies approved by the state to provide managed-care services to poor, disabled and elderly people throughout most of the state under Medicaid. Coventry said it would cancel its contract with ARH after Friday.

The termination, if it happens, would affect about 25,000 Medicaid recipients in the ARH service area.

ARH has eight hospitals and other programs such as clinics and home-health agencies in Eastern Kentucky.

The Coventry members would lose access to treatment or have to travel long distances to get to other facilities approved by Coventry. This would be difficult for many because they don't have money or reliable transportation, according to ARH and officials in the affected counties.

"We're talking about 25,000 or more people who are going to be scrambling around trying to find health care in places where they've never been, trying to buy gas that they can't afford," Rick King, chief legal officer for the hospital chain, said at a meeting in Harlan on Tuesday.

Concern has been rising among ARH patients as the deadline nears.

Bonnie Tackett, a Coventry member awaiting a liver transplant, said she was born at the ARH hospital at McDowell, in Floyd County, 53 years ago and has been treated at the hospital and clinic there since.

"To seek services elsewhere would present a great hardship because I have to pay someone to take me to my doctor appointments," Tackett said in the letter provided by ARH.

Tackett said she feared that switching to another insurance provider would delay her transplant.

"I honestly don't think I have that kind of time," she wrote.

Matthew Eyles, a spokesman for Coventry, said Tuesday that the company would keep paying for some services at ARH facilities beyond Friday. Those include services to women who are more than 12 weeks pregnant and have a relationship with an ARH obstetrician.

Coventry also will continue paying for ongoing courses of chemotherapy or radiation treatments for cancer patients, and for follow-up visits for people who have had surgery in the past 30 days, Eyles said.

That would leave thousands of people in Eastern Kentucky without paid access to ARH facilities, however.

The state's switch last year to a managed-care program for Medicaid was meant to save money, but the implementation has been rocky.

Health care providers have complained about long delays for payments from the managed-care companies and cumbersome pre-approval processes for treatments.

ARH sued Coventry and another provider, Kentucky Spirit, claiming the two owed more than $18 million for services ARH had provided to their Medicaid members.

Coventry has blamed the state for the need to pull out of the contract with ARH.

The state allowed another managed care provider not to include ARH in its network, which meant a lot of higher-risk, higher-cost patients ended up covered by Coventry, the company said.

The state failed to implement a method to assess risks that would adequately compensate managed-care providers who have more high-risk patients, Coventry said last month.

Jill Midkiff, spokeswoman for the Cabinet for Health and Family Services, said the state has put a risk-adjustment plan in place that Coventry and others agreed to when they bid to become providers.

The view at ARH — and in communities where it has facilities — is that Coventry is using the hospital chain as a pawn in its fight to squeeze more money out of the state.

"It's unfathomable that Coventry would play politics with people's lives to get what they want," Dan Mosley, past president of the Harlan County Chamber of Commerce, said at a meeting the chamber hosted Tuesday to raise awareness of the potential effect on communities if Coventry cancels its contract with ARH.

Many patients in ARH's service area are covered by Medicaid, and most belong to Coventry.

That means there would be 300 to 400 jobs cut — resulting in a combination of layoffs and reduced hours — from facilities if Coventry cancels its contract, said Hollie Harris, an ARH spokeswoman.

The job losses would hurt in a region that struggles economically and where coal mines are laying off workers.

"This is an issue that is going to have a devastating impact on southeastern Kentucky," said Dan Stone, CEO of the ARH hospital in Harlan.

State Sen. Brandon Smith, R- Hazard, said at the meeting he was "very scared" about the economic effect of Coventry's move, and he urged people to attend a rally in Frankfort at noon Monday on the Capitol steps to get the attention of Gov. Steve Beshear and other officials.

Smith asked local officials to spread the word to other county officials, schools and business organizations. There were plans under way by the end of the meeting to post information on the Harlan chamber's Facebook page.

Kerri Richardson, spokeswoman for Beshear, said he was aware of concerns of Coventry and ARH.

State officials said they are encouraging continued talks between Coventry and ARH.

Bill Estep: (606) 678-4655. Twitter: @billestep1. Valarie Honeycutt-Spears: (859) 231-3409. Twitter: @vhspears.This is an endnote here an dhdjbfv jhbdvf djfbvjd vhbdfjv jdbvf jdfjbvh jvfjkdbf

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