How many more hits must Kentucky's health-care safety net take before officials in the Beshear administration push the reset button on privatized Medicaid?
The latest victims are public health departments and the thousands of Kentuckians who depend on them.
Kentucky Spirit, one of three for-profit companies hired to manage Medicaid, owes health departments $7.9 million for services rendered, but is refusing to pay.
In response, the Beshear administration reduced its March payment to Kentucky Spirit, a subsidiary of St. Louis-based Centene Corp., by the amount owed to 59 health departments.
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But instead of paying the health departments, the state issued two-party checks made out to each of them and Kentucky Spirit, and asked the Fortune 500 subsidiary to please endorse and deliver the checks to the Kentucky health departments.
As far as we know, the health departments still haven't seen their $7.9 million but at least it's sitting in the state's account, not Centene's.
It should be noted that the other two Medicaid contractors are paying health departments for school-based care and other services denied by Centene, which is suing to end its Kentucky contract July 1.
This dispute is typical of the mess privatized Medicaid has been since it was rushed on line in hopes of saving $375 million over three years.
Centene says it's losing money because Kentucky provided inaccurate data on which to base its bid. The state denies this but recently gave all three companies an unscheduled seven percent rate increase, which will cut into the savings privatization was supposed to produce.
Meanwhile, Kentucky hospitals, doctors, pharmacies and health departments are being forced into layoffs, unpaid furloughs and other cutbacks because of delayed or denied Medicaid payments.
The providers being hurt the most are those that serve the most low-income patients, which could trigger devastating effects in the many Kentucky places that already suffer from severe shortages of doctors and preventive care.
Centene's decision to keep the health departments' money has put them in a "severe financial crisis," Scott Lockard, president of the Kentucky Health Departments Association, told reporter Mary Meehan.
More than 500,000 poor, elderly and disabled Kentuckians have been moved into privatized Medicaid and that number could increase when the federal-state program is expanded next year to include more working people who can't afford insurance.
The federal government pays 70 percent of Medicaid costs and has committed to pay a larger share of the Medicaid expansion.
Unless the Beshear administration can quickly turn this around, the U.S. Centers for Medicare & Medicaid Services should step in.