Negotiations between managed care company Coventry Cares and Appalachian Regional Healthcare resumed late Thursday after grinding to a halt earlier in the day.
Coventry filed a motion in U.S. District Court in Lexington that said when its contract with ARH expires June 30, Coventry would pay ARH for treatments as a "non-contracted provider" and that coverage to its 25,000 Medicaid patient members in Eastern Kentucky would not be interrupted.
However, Steve Price, an attorney for ARH, said the motion means ARH would be paid far less than it is now.
"It's not acceptable by any means. It's giving Coventry everything they want," said Price.
Coventry is one of four companies hired by the state Cabinet for Health and Family Services to manage Medicaid in Kentucky since Nov. 1.
After Coventry said it would sever its contract with ARH, ARH sued. Earlier this month, Coventry agreed to continue its contract until June 30 while renegotiating for long-term coverage.
Stephen Amato, Coventry's attorney, said its latest effort was made for the benefit of its members.
"Coventry remains committed to the best interest of its members in hopes that its willingness to preserve its members' access to ARH takes its members out of the middle of the contract dispute," he said.
Earlier Thursday, contract negotiations had broken down, and both sides told U.S. Senior Judge Karl S. Forester that Coventry Cares was not going to pay for Medicaid patients to receive most services at ARH after June 30.
Price, the attorney representing ARH, said in an interview before Coventry filed its motion that the two sides could not come to an agreement because Coventry was asking ARH for a cut in Medicaid reimbursements that ARH found unacceptable.
Medicaid's rates pay 75 percent of the cost of treating patients on an in-patient basis, Price said. Coventry has asked for a further reduction, he said.
"The ultimate issue is whether patients in that region are going to have access to care or not. ARH needs to be paid if they are going to treat these patients," said Price.
ARH is asking for all of Coventry members to be transferred to WellCare, the only other managed care company with which ARH has a contract.
After Coventry filed the motion Thursday, Forester postponed a hearing he had scheduled for Friday. That hearing was to be about whether Coventry may offer its members in Eastern Kentucky an adequate network to meet medical needs without ARH, which operates eight hospitals and other health clinics in the region.
In court Thursday, Price told Forester that Coventry does not have an adequate network without ARH and that Coventry members would have to travel more than an hour to find health care providers in the Coventry network. Many patients have said they cannot do that. Price pointed out that Coventry has given notice to King's Daughters Medical Center in Ashland and the Baptist Healthcare System, which includes a Corbin hospital and Central Baptist in Lexington, that it intends to terminate their contracts this year if they aren't willing to renegotiate.
Before filing the motion that would continue patients' coverage at ARH, Amato, Coventry's attorney, said Coventry has an adequate network to meet its members' medical needs without ARH. Also, Amato said Coventry's contract renegotiations were ongoing with the other hospitals.
Christina Heavrin, an attorney for the Cabinet for Health and Family Services, said Coventry and another managed care company, Kentucky Spirit, meet minimum requirements for an adequate network in Eastern Kentucky even if that network does not include ARH.
Forester asked whether cabinet officials could handle the transfer of Medicaid patients now in Coventry's network who want to go to WellCare, and Heavrin assured him the cabinet could. Acting Medicaid Commissioner Neville Wise said Thursday in an interview that WellCare could accommodate the additional members.
Cabinet officials said Coventry members will be able to call a toll-free number in the Department for Medicaid Services to switch to another managed care organization.
Aside from the ARH situation, Keith Bridges, a spokesman for the Danville-based Ephraim McDowell Health system, confirmed Thursday that Coventry gave notice earlier in May that it wanted to renegotiate its contract with Ephraim McDowell.
"We are just beginning discussions," Bridges said.
Ephraim McDowell Health has facilities in six counties, including hospitals in Danville and Stanford, Bridges said. A third of its Medicaid patients are Coventry members, Bridges said, but he did not have specific numbers.
Bridges said he did not know whether Ephraim McDowell officials had been given a date by which Coventry would terminate the contract if negotiations were unsuccessful.
Valarie Honeycutt Spears: (859) 231-3409. Twitter: @vhspears.