Kentucky is beginning a new era in its Medicaid program.
As Gov. Steve Beshear announced this month, Kentucky is expanding statewide what's called the managed-care delivery model, tapping private-sector expertise to increase efficiency, innovation and effectiveness.
While Kentucky's 815,000 Medicaid recipients will continue to receive the high-quality health care to which they are accustomed, the benefits of this new model for taxpayers and Medicaid recipients alike are tremendous:
■ New contracts recently signed with three new managed-care organizations will save taxpayers $1.3 billion over three years, including $375 million in the General Fund. A new annual contract with Passport, the state's only existing managed-care organization, will save an additional $37.6 million in taxpayer funds ($10.5 million in the General Fund) in the first year.
■ With the Medicaid budget rebalanced this fiscal year, the pressure to "fix" Medicaid by making additional cuts in unrelated services like education and public safety will be alleviated, now and in the future.
■ Nearly 550 new jobs will be created in Kentucky, as these companies hire new employees over the next several months to administer their contracts.
■ The delivery of health care services — and thus, the health of nearly one in five Kentuckians who access care through Medicaid — will be improved.
Three of the contracts are with organizations new to Kentucky. They are:
■ CoventryCares of Kentucky, a Medicaid product of Coventry Health and Life Insurance of Delaware, which provides services in eight states.
■ Kentucky Spirit Health Plan, a subsidiary of Centene Corp., which is based in Missouri and provides services in 12 states.
■ WellCare of Kentucky, part of WellCare Health Insurance of Illinois, which provides services in seven states.
Come Oct. 1, these organizations will begin coordinating physical, mental and dental care statewide for more than 560,000 Medicaid recipients across the state, except for the region now covered by Passport Health Plan.
With its new contract, Passport will continue to provide services to 170,000 Medicaid recipients in Jefferson County and 15 nearby counties. Its work over 13 years has proven the effectiveness of the managed-care model.
Taxpayers can rest assured that we will have strong oversight of the work of all these companies. In January, we created the Medicaid Managed Care Oversight Branch, which will monitor the new contracts. We have also built strong patient-protection provisions into the contracts.
Medicaid recipients should also know that we are working hand in hand with these organizations to ensure an orderly transition of care. We have established a managed-care integration team, and we are working with health care advocates around the state to make sure no one sees an interruption in health care services.
Some 46 percent of Medicaid caseloads in this country are under managed care, the goal of which is not just to lower overall costs, but also to improve health outcomes and promote wellness and healthier lifestyles.
The emphasis is on prevention as well as coordination of care, and it's especially effective for people suffering from disease and chronic health conditions.
Beshear began the mission of educating the public about the change with visits to West Kentucky earlier this month. Other recipients also will be hearing from us.
There will, of course, be bumps in the road as we implement this model, but we will act quickly to smooth those out. We see this as the beginning of a long process of change, a positive change that will improve lives.
We look forward to moving to this new model, and we think that Beshear's approach — to accompany strategic budget cuts with innovative new ways of delivering services — is the right approach at the right time.