Politics & Government

State asks court to make Kentucky Spirit stay through Aug. 31

FRANKFORT — State officials have asked the Kentucky Court of Appeals to order a managed-care company with more than 124,000 Medicaid patients to continue operating in Kentucky until at least August 31.

The Kentucky Court of Appeals will likely decide early next week whether Kentucky Spirit must remain in Kentucky past July 5, the day the company says it will terminate its contract with Kentucky.

Kentucky Spirit is one of three managed care companies the state hired in November 2011 to manage health care for the poor and elderly. The company told the state last year that it would pull out of Kentucky a year before its contract was to expire in July 2014, citing a larger-than-expected loss of money.

Franklin Circuit Court Judge Thomas Wingate ruled in May that Kentucky Spirit could not leave a year early without breaching its contract with the state. Under the ruling, the state would be entitled to damages, probably worth millions of dollars, if Kentucky Spirit terminates its contract early.

Kentucky Spirit appealed Wingate's ruling to the Court of Appeals and continues to assert that it will leave the state on July 5.

The Cabinet for Health and Family Services filed a motion this week asking the courts to force Kentucky Spirit to stay in Kentucky until Aug. 31. The cabinet argued that moving more than 124,000 patients to other Medicaid managed care companies will create a disruption in services and chaos for doctors, hospitals and other Medicaid providers.

The other two managed care companies — Coventry and WellCare — would need additional time to take on Kentucky Spirit's clients.

Kentucky Spirit, however, argues in court documents that Wingate asked the cabinet multiple times to work out a transition plan with the company, which the cabinet has refused to do.

"It is unfortunate that the Commonwealth has not abided by Judge Wingate's February 2013 order to engage in transition planning with Kentucky Spirit, unnecessarily threatening the continuation of care for its Medicaid population," said Jean Rush, CEO for Kentucky Spirit.

The cabinet argues that Kentucky Spirit waited until June 18 to tell the cabinet it still planned to leave on July 5, despite Wingate's May ruling.

"If Kentucky Spirit had made its true intentions clear at the outset, the commonwealth would have been afforded a meaningful opportunity to begin transition planning," cabinet attorneys said in court documents.

Health and Family Services Secretary Audrey Tayse Haynes said letters will be sent to Kentucky Spirit's 124,000 members and to health care providers to explain what may happen on July 5, depending on what the Court of Appeals and possibly the Kentucky Supreme Court decide. The letters should arrive on Monday.

If the court rules against the cabinet and allows Kentucky Spirit to leave the state on July 5, Medicaid patients will still be able to access their current primary care physician, Haynes said.