Federal judge hears arguments in Medicaid dispute; no ruling issued

  • Last Updated: June 13, 2012 – 12:26 pm

LEXINGTON, Ky. — A federal judge has heard arguments in a dispute over Medicaid services.

The Lexington Herald-Leader and The Courier-Journal report that lawyers for Appalachian Regional Healthcare and managed-care company Coventry Cares were in court Tuesday arguing over whether Coventry could serve the needs of 25,000 eastern Kentucky Medicaid patients without using ARH facilities. The regional heathcare system has eight hospitals and other health clinics throughout the region.

Coventry has said it intends to sever its contract with ARH, but agreed to negotiate until June 30 after the healthcare system filed suit in federal court. The negotiations have been unsuccessful, so now the sides are arguing over whether residents in eastern Kentucky have access to healthcare without ARH facilities.

Coventry argued that it can meet Medicaid guidelines of maintaining hospital services within a one-hour drive of rural residents.

“We established that the network was adequate under the reasonable standards accepted in the industry,” Stephen Amato, an attorney for Coventry, said after the hearing. “By no means should anyone conclude that Coventry is not committed to giving the members … full access to health care. We’ll do that no matter what the judge decides about this issue about adequacy.”

ARH argued that 10 areas don’t have enough providers outside its network to meet the guidelines, and that thousands of people will face a longer commute.

“That’s a hole in the region that’s as big as the hole that sank the Titanic,” Price said. “You ought to let passengers off before the boat sinks.”

He asked that Coventry patients be allowed to sign up with Wellpoint, another managed care provider with which ARH has a contract.

After hearing five hours of testimony, the judge asked both sides to submit additional briefs by Thursday. He did not indicate when he would rule on the matter.

The state Cabinet for Health and Family Services hired Coventry and three other companies on Nov. 1 to manage Medicaid in Kentucky.

Christina Heavrin, an attorney for the Cabinet for Health and Family Services, said Tuesday that Coventry had an adequate network of providers without ARH facilities.


ARH Seeks Action Against Coventry Cares

LEXINGTON, KY. — Appalachian Regional Healthcare argued for a federal injunction against Medicaid contractor Coventry Cares on Tuesday as negotiations for a new agreement between the two have stalled.

The existing contract between ARH and Coventry, one of Kentucky’s three new Medicaid managed-care organizations, is set to expire on June 30, and weeks of negotiations have proven fruitless.

ARH is asking the U.S. District Court to allow thousands of patients in southeastern Kentucky to switch Medicaid contractors en mass or provide an open enrollment period for patients to change companies one at a time.

“We are just trying to make sure we can continue to provide services to Medicaid beneficiaries in that region as we have for 50 years,” said ARH attorney Steve Price.

Eastern District Judge J. Owen Forrester heard five hours of testimony Tuesday.

Witnesses for ARH testified that Coventry will no longer provide an adequate network of hospitals and doctors if a contract is not renewed with ARH, which operates eight hospitals and additional clinics in the area.

But Coventry and the state Cabinet for Health and Family Services dispute those claims and called witnesses to defend Coventry’s network of health care providers.

“Coventry remains committed to doing what is right by its members,” said Stephen Amato, an attorney for the firm. “Coventry is going to keep a strong, robust set of providers in that region, with or without ARH.”

Much of Tuesday’s hearing focused on the distance that Medicaid patients will have to drive if Coventry stops paying for services at ARH facilities.

The state requires that Medicaid networks maintain hospital services within a one-hour drive for patients in rural areas.

ARH witnesses argued that Coventry used faulty measurements to gauge drive time and thousands across the region will face a longer commute, particularly for obstetrician care. Price said 10 areas will not have a sufficient number of providers.

“That’s a hole in the region that’s as big as the hole that sank the Titanic,” Price said. “You ought to let passengers off before the boat sinks.”

But attorneys and witnesses for Coventry countered that ARH is undercounting hospitals in the network. According to testimony, 550 providers operate at 600 locations in the region, and Coventry says it will still pay for patient care at ARH at a lower, out-of-network rate.

Forrester asked the attorneys to submit additional briefs by Thursday, but did not indicate when he might make a decision.