FRANKFORT — Home health agency officials told the House Health and Welfare Committee on Thursday that Kentucky's new managed care system for Medicaid is three months behind in its payments to them.
Jeannie Lemaster, chief compliance officer of Nurses Registry and Home Health, based in Lexington, said the agency has outstanding claims of $300,000 to $400,000.
Kip Bowmar, executive director of the Kentucky Home Health Association, said only 8 percent of the claims from the approximately 150 home health agencies have been paid since the switch to managed care Nov. 1.
"If these problems don't get corrected, there is a likelihood that some agencies could go out of business," Bowmar said. "We are hopeful and optimistic that it will get better."
The home health agencies are the latest group of providers to complain about the state's switch to Medicaid managed care. The state moved more than 500,000 people from traditional Medicaid to managed care on Nov. 1.
Three new companies — Coventry Cares, Wellcare of Kentucky and Kentucky Spirit — have contracts to manage health care in the state-federal program for the poor, disabled and elderly. The move to managed care is expected to save the state millions of dollars during the next three years.
Provider groups are turning to the legislature with concerns about late payments, decreased payments and denials of claims.
Earlier this month, therapists who work with abused, neglected and at-risk children told a legislative panel that they might have to close their doors if they don't receive back payments soon from the managed care companies.
On Monday, the Program Review and Investigations Committee voted to pursue subpoenas against managed care companies if it did not get more answers concerning low reimbursement rates for pharmacies.
Independent pharmacists have said reimbursement rates are much lower than they were under traditional Medicaid, which means they are having to lay off employees. Others have said they might have to close long-time, family-run businesses because they can't pay their bills.
Lemaster told the House Health and Welfare Committee on Thursday that home health agencies are running into a host of roadblocks, denials of claims, long waits for approval of services and other billing problems. Lemaster said administrative costs have gone up because they have to pay staff overtime just to get paid.
Lemaster said the bulk of the problems have been with Coventry — which has denied 82 percent of their claims, she said. The remaining 18 percent are being held because the company has not loaded billing codes for supplies into its system, even though Coventry reportedly has had the codes since November.
Pat Hagan, who oversees pediatric services for Nurses Registry, said they had one long-time client who is severely autistic. Nurses Registry was providing in-home care to the patient while his single mother was at work. Coventry asked for medical documentation that the boy needed constant supervision before approving the claim, Hagan said. The boy cannot use the bathroom and cannot speak, she said.
"The mother switched him to another company, and he was approved immediately," Hagan said.
Lemaster said that because there are differences in the managed care companies and what is being approved for payment, there are inequities in the Medicaid system. Some people are receiving services and others aren't, which is not supposed to happen, she said.
Rep. Darryl Owens, D-Louisville, said that asking providers to absorb $300,000 in late payments created substantial cash-flow issues for small businesses.
"I think it's unconscion able that companies should be asked to carry $300,000 or $400,000," Owens said. "We're going to have companies that are going to go out of business."
Bowmar said that his organization was setting up more meetings between the managed care companies and home health care providers so these issues could be addressed.
Jill Midkiff, spokeswoman for the Cabinet for Health and Family Services, said the Department of Medicaid was trying to work with the managed care companies and providers, but some of the issues would take time to work out.
"Some of the issues relate to the initial start-up period for managed care and will be resolved as providers and the MCOs gain experience in working together," Midkiff said. "The primary focus of the Medicaid program staff is and continues to be the prompt resolution of any issues that arise as we ease the transition of providers to managed care."
Coventry did not provide an immediate comment on the concerns raised during Thursday's meeting.