Officials: Care disrupted Medicaid changes causing ‘nightmare’

Health officials who spoke said they have no such complaints about Passport Health Plan.

Deborah Yetter – Louisville Courier-Journal
FRANKFORT, KY.— Health care officials from throughout Kentucky described massive problems Wednesday with the state’s new Medicaid managed- care system — resulting in outcomes they say range from outrageous to absurd.

“This bureaucratic nightmare needs to change,” said Dr. Shawn Jones, a Paducah physician and president of the Kentucky Medical Association, speaking at a meeting of the Senate Health and Welfare Committee.

Jones was one of several officials who testified that it appears any cost savings from managed care will come at the expense of patients.

“It appears to me the only place the savings can come from is the delay and denying of care,” Jones said. “Patient care is being delayed and, in some cases, simply prevented.”

The problems date to Nov. 1 — the day the state hired three companies to handle most Medicaid services outside the Jefferson County region — and include chronically late payments, bungled claims processing and constant battles over new rules that require services once routinely covered by Medicaid to be “pre-authorized” to guarantee payment.

Patients spend hours in physicians’ waiting rooms — or get sent home and told to return after procedures are authorized, Jones said. Pharmacists spend hours on the telephone trying to get prescriptions authorized, said Robert McFalls, executive director of the Kentucky Pharmacists’ Association.

And in one recent case, a woman arrived in labor at the hospital, and the managed-care company insisted that her care be pre-authorized, said Joe Grossman, chief financial officer of Appalachian Regional HealthCare, which operates eight hospitals in Eastern Kentucky.

“Fourteen days later, mom and baby are home and we still have no pre-authorization,” Grossman said.

The managed-care plan, which covers about 560,000 Medicaid members outside the Jefferson County region, is the linchpin of Gov. Steve Beshear’s administration’s plan to achieve savings in the $6 billion-a-year federal-state health plan for the poor and disabled.

Several officials who spoke Wednesday said they believe the companies — CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky, all affiliated with out-of-state national chains — may be deliberately stalling payments.

“I feel like I’ve become a bank to these out-of-state insurance companies,” said Grossman, who added that his hospital chain is owed about $8 million. “I’ve lent them money.”

Nancy Galvani, with the Kentucky Hospital Association, said hospitals across the state are owed millions of dollars in unpaid claims since managed care took effect three months ago. Meanwhile, the managed- care companies are getting large payments up front to run Medicaid.

The companies have been paid about $135 million since Nov. 1, according to state Auditor Adam Edelen, who last week opened an inquiry into their claims payments in response to complaints to his office.

No one from the managed-care companies spoke Wednesday. Sen. Julie Denton, a Louisville Republican and committee chairwoman, said she has invited their representatives to speak at next week’s meeting.

The companies issued a statement after Wednesday’s meeting.

“If there are complaints about WellCare, we want to address them and work with our providers to make the program a success,” said WellCare spokeswoman Denise Malecki.

Coventry spokesman Matthew Eyles said the company is willing to address the issues. “With any major new program, some problems will arise that need to be fixed, and we are committed to doing just that and won’t rest until those problems are resolved,” he said.

And Kentucky Spirit spokesman John Lee said the company continues to work “directly with our providers on specific, case-by-case issues.”

Health officials who spoke said they have no such complaints about Passport Health Plan, a nonprofit Medicaid managed care entity that provides service to about 170,000 Medicaid patients in Jefferson and 15 surrounding counties.

Neville Wise, the state’s acting Medicaid commissioner, spoke briefly, saying state officials are continuing to work with the health care providers and the managed-care companies to try to iron out problems. Many are being addressed, he said — such as the requirement that childbirth be pre-authorized. That has been corrected, he said.

Denton told Wise to keep trying to solve problems. “How many more ludicrous scenarios can there be?” she asked.

Health care officials who testified said that, while some problems have been corrected, others continue.

Janice Richardson, chief executive for Rivendell Behavioral Health Services, a children’s psychiatric hospital in Bowling Green, said the managed- care companies’ rules are disrupting care and in the long run are costing more.

For example, the companies limit the stay of children — even in cases where Rivendell doctors believe they need more care. So the children get discharged, get worse outside the hospital and are readmitted, Richardson said.

Managed-care officials have argued with Rivendell about the severity of children’s diagnoses and in one case accused hospital officials of “monkeying around” with a child’s treatment to prolong it, she said. “We are seeing kids over and over and over.”

Further, Richardson said, children who may be severely emotionally disturbed and suicidal are not getting the care they need.

“Somebody’s going to get hurt, and its going to be bad when it happens,” she said.

Steve Shannon, who represents the state’s 14 community mental health centers, said in an effort to head off such problems the centers began meeting with the managed-care companies before the Nov. 1 start-up date and have continued regular meetings and conference calls.

Still, claims processing and late payments are causing major hardships for the nonprofit community mental health centers. And the managed-care companies insist on prior authorization for many services and medications — yet don’t respond within the two days required by the state contracts and regulations.

Some authorizations take days or weeks, he said. Though the companies are supposed to fax the authorizations, one was mailing them, Shannon said.

“They were folding it, putting it in an envelope, licking it and putting a stamp on it,” Shannon said. “There is this thing called the Internet.”

Shannon said that all three of the new managed- care companies have extensive experience in other states and he is surprised they didn’t get off to a smoother start in Kentucky.

“They should know how to do this,” he said.

Shannon was among witnesses who said he wonders whether the delays and denials of care are deliberate on the part of the companies to keep money they get from the state to manage Medicaid.

“Is it really that hard to approve services and pay claims?” he asked.