Coventry, ARH negotiations over Medicaid appear at an impasse

vhoneycutt@herald-leader.comMay 30, 2012 

Negotiations between Medicaid managed-care company Coventry and Appalachian Regional Healthcare appear at an impasse as the two sides head to U.S. District Court on Thursday.

Coventry is one of four companies hired by the state Cabinet for Health and Family Services to manage Medi caid in Kentucky.

After Coventry said it would sever its contract with ARH, which operates eight hospitals and other health clinics in Eastern Kentucky, ARH filed a lawsuit. Earlier this month, Coventry agreed to continue its existing contract until June 30 while it negotiated with ARH for long-term coverage.

On Wednesday, ARH filed a document in U.S. District Court in Lexington saying "further negotiations between Coventry and ARH appear futile."

"Coventry just keeps insisting that ARH take a large cut in its Medicaid reimbursements," Steve Price, an attorney representing ARH, said in an interview Wednesday.

On Friday, Coventry filed a document saying "it appears unlikely that these differences can be bridged."

Late Wednesday, Stephen Amato, an attorney representing Coventry, said "Coventry remains willing and able to enter into a fair and reasonable agreement with ARH in hopes that ARH will reconsider its position."

U.S. Senior Judge Karl S. Forester has signed an order outlining the issues that would be discussed Thursday.

The court wants to know what arrangements the cabinet has made to ensure that the 25,000 Medicaid patients served by ARH and covered by Coventry would be covered by other managed-care organizations and "that the patients will not suffer any interruption in coverage."

Coventry has agreed to continue to cover some pregnancies, cancer treatments and surgeries provided at ARH until patients get other coverage or choose other health care providers within the Coventry network.

Recently filed court documents include a draft of a letter Coventry plans to send to its members notifying them that the contract with ARH will be terminated June 30.

Cabinet spokeswoman Jill Midkiff said the cabinet has measures in place to make sure there will be no interruption in coverage.

"The cabinet will assure the judge that, in the event that a notice is received from Coventry that ARH will not be in their network as of July 1, members will be able to call the Department for Medicaid Services to switch to another" managed care organization, said Midkiff.

She said the cabinet was disappointed that ARH had not reached rate agreements with Coventry and Kentucky Spirit, another managed-care company.

"We have known all along that the goal of managed care is savings, as well as improved health outcomes to help Medicaid members lead healthier lives," she said.

Valarie Honeycutt Spears: (859) 231-3409. Twitter: @vhspears.

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