Managed-care company tells Baptist Healthcare it wants new contract

bmusgrave@herald-leader.comvhoneycutt@herald-leader.comMay 8, 2012 

Central Baptist Hospital is one of five hospitals in Kentucky owned by Baptist Healthcare System, whose current contract with Coventry Cares expires Nov. 1.

CHARLES BERTRAM

FRANKFORT — One of the state's Medicaid managed-care companies has told Baptist Healthcare System that it wants to renegotiate its contract with the chain, which has hospitals in Lexington, Louisville, La Grange, Paducah and Corbin.

Coventry Cares notified Baptist Healthcare System on Friday that it wanted to renegotiate, said Ruth Ann Childers, a spokeswoman for Baptist. If an agreement cannot be reached by Nov. 1, when the current contract expires, Coventry has told the health care system that it would allow the contract to expire, Childers said.

"We are hopeful and optimistic and fully intend to work with Coventry in good faith on this issue," Childers said. "We don't want anybody who wants to come to the Baptist Healthcare System not to be able to do so if we can work it out at all."

Baptist Healthcare System — which owns five hospitals in Kentucky, including Central Baptist Hospital in Lexington and Baptist Hospital East in Louisville — is the latest hospital chain to receive notice from Coventry that it wanted to renegotiate or terminate its contract.

Coventry and Appalachian Regional Healthcare, which has eight hospitals in Eastern Kentucky, were able to come to an agreement last week to continue their relationship, but only until June 30. The move came after ARH sued Coventry in federal court.

Coventry originally had told ARH it would terminate its contract May 4.

Coventry also has notified King's Daughters Medical Center in Ashland that it will terminate its contract after May 26, according to a spokesman for King's Daughters Medical Center. King's Daughters Medical Center is still talking with Coventry to try to come to an agreement.

Matt Eyles, a spokesman for Coventry, said the company and Baptist have more than five months to come to an agreement.

"Our contract with Baptist does not expire until November 1, which is over five months away," Eyles said. "We are hopeful that we can find a solution that balances member access, affordability, and quality. Instead of waiting, we thought it would be better to inform Baptist about the reality of our situation to improve the chances of a timely solution.

"With several months' data and experience and, given recent risk adjustment developments, we are now looking across providers to create the most effective, highest performing network."

Coventry is one of three companies the state hired Nov. 1 to manage care in the federal-state health care program for the poor and disabled. The move was intended to save the state hundreds of millions of dollars over the next few years. But the transition has been rocky.

Under managed care, the state pays the companies a set fee per patient regardless of the amount of services the patient needs. Coventry has said that it has too many high-risk patients and that the state needs to adjust the risk model so Coventry can receive more money for sicker patients. Coventry also has said Kentucky Spirit, another managed-care company, was allowed to operate in Eastern Kentucky despite not having a contract with ARH hospitals, driving high-risk patients to Coventry. The state did its risk adjustment April 27. But Coventry, in court documents in the ARH federal court case, has said the rate adjustment is not enough.

Coventry — unlike Kentucky Spirit and Well Care, another managed-care company — opted not to charge patients a co-pay for pharmacy services. That business decision meant it got more people into the system who likely had more complicated health problems. House Speaker Greg Stumbo, a Democrat and former attorney general, has questioned whether Coventry's decision to not charge a co-pay could be considered Medicaid fraud.

Coventry has denied such allegations and says the state should have done the risk adjustment sooner, as its contract with the state says.

Coventry and ARH are continuing negotiations. More than 25,000 people are assigned to Coventry in the ARH service area. It's not clear how many Coventry patients use Baptist Healthcare System. But information provided by the Cabinet for Health and Family Services shows more than 22,000 Coventry patients in counties where Baptist has hospitals. Both ARH and Baptist Healthcare System own physician offices and other health care providers in addition to hospitals.

Valarie Honeycutt Spears (859) 231-3409. Twitter: @vhspearsBeth Musgrave: (502) 875-3793. Twitter: @BGPolitics. Blog: bluegrasspolitics.bloginky.com

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