Kentucky Spirit denies breaching Medicaid contract with state

bmusgrave@herald-leader.comJuly 8, 2013 

FRANKFORT — Officials with Kentucky Spirit said Monday that the Medicaid managed care company did not breach its contract with the state when it stopped offering services to more than 124,000 clients during the weekend.

"Kentucky Spirit does not believe it has breached its contract with the commonwealth and believe our position will be upheld in the pending litigation," said Deanna Lane, a vice president of Centene, Kentucky Spirit's parent company. "We have taken every step possible to make this a smooth and orderly transition, including giving the state over eight months notice."

Cabinet for Health and Family Services officials said Kentucky Spirit — one of three managed care providers hired by the state in November 2011 to control costs in the federal-state health care program — ceased to provide services to its clients at 12:01 a.m. Saturday. After the company failed to provide ser vices, the state moved Kentucky Spirit's clients to Coventry and WellCare, the two other managed care providers.

Kentucky Spirit and the Cabinet for Health and Family Services have been at odds since Kentucky Spirit announced in October that it planned to terminate its contract July 5, a year early. In May, a Franklin Circuit Court judge ruled that if Kentucky Spirit left the state early, it would be in breach of contract and could owe the state millions of dollars.

Kentucky Spirit has appealed that decision, which is pending.

The cabinet asked the state Court of Appeals to make Kentucky Spirit continue operating until Aug. 31 so the transition for Medicaid patients would go more smoothly. The Court of Appeals denied that request, saying the state had had ample time to prepare for the transition.

In a news release, Centene officials said Monday that the company would continue to have about 100 employees in Kentucky to help patients and health care providers with the transition.

Moving more than 124,000 patients to Coventry and WellCare will cost taxpayers additional money, but it's not known how much.

Kentucky Spirit patients have been assigned to Coventry or WellCare but will have 90 days to switch providers if they choose, cabinet officials said Monday. Until that 90-day period is up, it's impossible to know how much money the change will cost the state.

"The cabinet will be working with its attorneys to determine what will be included in the actual damages the commonwealth will seek from Kentucky Spirit," said Jill Midkiff, a spokeswoman for the cabinet.

Beth Musgrave: (502) 875-3793. Twitter: @BGPolitics. Blog: Bluegrasspolitics.bloginky.com.

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