Managed care mangled too long; heed audit suggestions

The startup of statewide Medicaid managed care was bound to be bumpy.

We've been willing to cut the managed care contractors and the Beshear administration some slack, in hopes that once the bumps are smoothed out, the outcome will be both healthier Kentuckians and a slowdown in costs.

As the transition enters its fifth month, patience wears thin. It's harder to excuse delays in payments to hospitals, physicians and pharmacies on which poor, elderly and disabled people depend.

After all, these are established, multi-state companies that promised they could do the job. Kentucky hospitals and doctors shouldn't have to borrow money because they are awaiting payments for services rendered. But that's what has happened.

"I feel like I've become a bank to these out-of-state insurance companies," Joe Grossman, Appalachian Regional Health Care's chief financial officer, told a legislative committee last month. "I've lent them money." At the time, his hospital chain was owed $8 million.

The managed care companies — CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky — have been paid $708 million while paying out just $420 million to health care providers, as of Feb. 15.

That's according to state Auditor Adam Edelen, who has recommended 10 immediate fixes, based on a preliminary analysis of information from the managed care companies.

The recommendations, some of which are technical, are aimed at speeding up billing, payments and pre-authorizations.

At that committee meeting last month, lawmakers heard about a woman who arrived in labor at an ARH hospital, delivered a baby, went home and, 14 days later, the hospital was still awaiting pre-authorization to care for her.

One managed care practice should be halted as soon as possible, even if it means returning some patients to a fee-for-service plan run by the state: Patients who have found, through trial and error, medications that control their mental illnesses should not be required to switch to a different medication on a company's approved list.

Any cost savings will likely be canceled out by increased hospitalizations. And it's barbaric to make patients and their families suffer when experience and medical professionals have identified the drugs they need.

The managed care companies say they are ironing out the problems and have already speeded up payments.

That's good news. But with billions of public dollars going to care for the one in five Kentuckians who rely on Medicaid, it makes sense that Edelen is creating a unit in the auditor's office to help keep the program accountable.