NY Times article – Insurers and image


June 21, 2012

Insurers Seek to Soften Their Image, No Matter How Court Rules on Health Act


As the country waits to see how the Supreme Court will rule on the Affordable Care Act, health insurance companies are taking matters into their own hands.

Over the past year, many of the largest insurance companies in the country, including Aetna, Cigna and Humana, have introduced elaborate marketing campaigns to reposition themselves as consumer-friendly health care companies, not just insurance providers. The insurers have been preparing for the possibility that the court may uphold the most controversial provision in the legislation — the individual mandate that would require people to buy health insurance or face a fine.

While a majority of Americans would still be left to choose among the options their employers offer, a favorable ruling would expand the market for the insurance companies, allowing them to sell directly to millions of uninsured Americans.

Insurers say that even if the mandate is struck down, they will press forward with their strategy because future success will depend on engaging directly with the consumer. “I expect to see a fair amount of competition for the public’s attention,” said Michael B. McCallister, chairman and chief executive of Humana. “The individual relationship is going to be ever more important.”

The new efforts include themed messages like a “Go You” campaign by Cigna, as well as loyalty and rewards programs that take a page directly from the marketing playbook of traditional retailers.

The campaigns represent a departure for insurers, who had previously directed their marketing to wholesale business accounts, not individual consumers. The shift in strategy may become necessary no matter what happens with the health care act, but it is fraught with challenges for an industry that is better known for causing consumer headaches than for curing them.

“They are among the most disliked industries in the United States,” said Regina E. Herzlinger, a professor of business administration at the Harvard Business School and the author of the book “Who Killed Health Care? America’s $2 Trillion Medical Problem and the Consumer-Driven Cure.” “The nature of the business is that they really are not that eager to O.K. every expense,” Ms. Herzlinger said.

Indeed, insurance companies expressed concern about certain provisions in the Affordable Care Act when it was being debated in 2009, and lobbied to shape some of the rules. If the law is upheld by the Supreme Court, it could force insurance companies to extend coverage to tens of millions of uninsured Americans, regardless of pre-existing medical conditions.

In the meantime, insurance companies have been spending more on their marketing and advertising efforts. According to Kantar Media, a research unit of WPP, spending on medical and dental insurance advertising increased to $789.3 million in 2011 from $667.7 million dollars in 2010.

Mr. McAllister described Humana’s new approach as “bright, honest, aware and bold.” One television ad the company released in 2011 showed a family reunion at a summer home, complete with giggling children, cooing grandparents, bonfires and swimming at the lake.

In January, Aetna announced it, too, was refreshing its brand to continue “its evolution from an insurance carrier to a health solutions company,” the company said in a statement. “More and more, the end consumer is who we need to focus on,” said Belinda Lang, the head of brand and consumer marketing at Aetna.

Along with new advertising campaigns, several insurers are introducing new digital products, including some that seem to borrow equally from shopping comparison sites, airline loyalty programs and Groupon.

For example, Humana has created a program that rewards members for healthy behavior like losing weight or quitting smoking, awarding points that can be redeemed for things like hotel reservations, electronics and clothing.

One of the biggest insurers in the country, the Blue Cross and Blue Shield Association, recently updated its daily deals Web site, which offers members discounts on things like eye surgery and gym memberships. Aetna introduced a digital tool that allows consumers to compare out-of-pocket expenses. “Ah, the potential of putting people first,” says the narrator of its ad.

Putting people first is not a phrase many consumers associate with insurers, which instead tend to conjure up memories of endless bureaucracy, skyrocketing premiums and declined coverage. The advertising campaigns are an attempt by health insurance companies to humanize themselves and “to make the patient believe that the health insurance company really cares about them and to reassure the customer that they get what they pay for,” said Nora J. Rifon, a professor in the department of advertising, public relations and retailing at Michigan State University.

Fred Karutz, the general manager of health plan solutions at Silverlink Communications, a health care technology company, said that if the health care overhaul was left intact by the court, as many as 120 million Americans could be in the market for health insurance by the end of the decade.

“Insurance is a large-numbers business,” Mr. Karutz said. “The marketing push is for nonbuyers, the people who are ambivalent.” By nabbing new customers, sick, old, young and healthy, the companies can create “a balanced risk pool” he added.

EmblemHealth’s advertising campaign focuses on telling stories of its employees and sending its members a message that insurance can be personal. Some of the ads are large billboards placed at major intersections and landmarks in New York City, like Madison Square Garden. One ad, which quotes from Sonia, an Emblem employee, reads, “ You really develop a connection with someone when you can look in their eyes and help.”

With its “Go You” campaign, Cigna addresses consumers directly for the first time. “It is a shift, it’s an important shift,” said Maggie FitzPatrick, the chief communications officer at Cigna. The campaign includes bold colored ads with more personal messages like: “Why would you want to be like someone else? Its exhausting just trying to be yourself.”

Dr. Elliott S. Fisher, the director of the Center for Population Health at the Dartmouth Institute for Health Policy and Clinical Practice, said the campaigns were necessary regardless of the outcome of the Supreme Court case.

“Their future is going to depend on their ability to demonstrate value to patients and to employers,” Dr. Fisher said of insurance companies. “No one any longer questions the fact that health care is unaffordable and that the current way we are doing business isn’t working.”

Despite all of their efforts, Mr. Karutz of Silverlink said, the companies still have a long way to go since many of them are new to the retail environment. “As people become consumers, they seek out value,” he said. “In the group space, health plans could never hear the consumer scream, but in the retail space everybody can hear the consumer scream.”

“They need it,” said John Kamp, the executive director of the Coalition for Healthcare Communication, a policy and marketing group. “They know they are on the wrong side of the public attitude.”

Kentucky Seeking Private Medicaid Operators for Louisville Region


The process of opening the Louisville area to Medicaid competition is underway.

Passport Health Plan has run Medicaid in the area for 15 years, but the state has been ordered by the federal government to allow at least one more private operator to do business in the region.

Passport officials say they will bid for the contract and requests were sent to other potential bidders this week.

“I believe proposals are due back to us sometime before the end of July and we will be negotiating those contracts to go live January,” says Cabinet for Health and Family Services Secretary Audrey Haynes.

Medicaid patients in the area will not have the first choice of who administers Medicaid for them. Rather, Haynes says patients will be assigned to a private operator then given the option to change.

Three private operators run Medicaid in the rest of the state. So far, only one—United Healthcare—has shown an intent to bid on the Louisville area contract.

When asked if they would bid on the Louisville contract, several other private operators declined to comment.


Federal judge grants injunction in Appalachian Medicaid case

Medicaid contractor must keep paying

Written by
Mike Wynn
The Courier-Journal

LEXINGTON, KY. — A federal judge granted an injunction Wednesday that requires Medicaid contractor Coventry Cares to continue paying for services at Appalachian Regional Healthcare until patients in Eastern Kentucky have a chance to switch Medicaid companies.

Coventry Cares, one of three new managed-care organizations in the state’s Medicaid program, was planning to terminate its contract June 30 with ARH, a nonprofit chain of eight hospitals and other clinics in the region.

But in a 23-page opinion, U.S. Senior Judge Karl S. Forester wrote that ARH has “shown sufficient public interest and irreparable harm” if Coventry is allowed to end payments before the new open enrollment period for Medicaid takes effect Nov. 1.

The move allows thousands of ARH patients to transfer to WellCare of Kentucky, another managed-care organization that contracts with the hospital chain.

Forester noted that Medicaid comprises about 24 percent of ARH’s business and concluded that court intervention was necessary to prevent patients from being “thrown under the bus.”

“The health and well-being of thousands of these patients hang in the balance, and many have already suffered hardships, stress and confusion as a result of Coventry’s sudden notice of termination,” the judge wrote.

Coventry covers 64,000 members in the region, and after it issued a notice in April to terminate the contract, the two sides negotiated for weeks without success.

Coventry and the state Cabinet for Health and Family Services have argued that Coventry’s network of health-care providers would remain adequate and still meet driving distance standards for patients if the contract was allowed to expire.

But Forester disagreed, writing that “driving times calculated by Coventry’s methodology … were grossly incorrect and entitled to no weight.”

The judge also ordered Coventry to provide a list of Medicaid patients so ARH could notify them of the upcoming open-enrollment period this fall.

“The important thing is people will be given a chance to have their choice of providers,” said ARH attorney Steve Price.

Coventry CEO defends move

Michael Murphy, CEO of Coventry Cares of Kentucky, appeared before the state’s joint Committee on Health and Welfare on Wednesday to field questions over coverage issues, but said he had not had a chance to read the court opinion.

Still, Murphy defended recent decisions to terminate contracts with ARH and others, arguing that Coventry had suffered a $50 million loss in the state during the first quarter.

He said the loss was due to bad data provided by the state and the health cabinet’s failure to fairly pay Coventry for covering a riskier and more costly pool of patients compared to other Medicaid contractors.

“We’d like the state to fix the funding disparities — it is obvious that the program is underfunded,” he said. “Utilization is so much different than what it was anticipated to be.”

But several lawmakers used the hearing to criticize Coventry, which has generated several points of concern as a managed-care organization over payments and contracts.

“I really don’t care what Coventry has to say,” said state Rep. John Will Stacy, D-West Liberty. “I think anything they say is a load of crap.”


Judge orders Coventry Cares to continue contract with Appalachian Regional Healthcare

By Valarie Honeycutt Spears and Beth Musgrave — vhoneycutt@herald-leader.combmusgrave@herald-leader.com

A federal judge ruled Wednesday that Coventry Cares must continue its contract with Appalachian Regional Healthcare through Nov. 1 to meet the medical needs of 25,000 Eastern Kentucky Medicaid patients.

ARH operates eight hospitals and other health clinics in the region. Coventry is one of three companies the state hired Nov. 1 to manage care for the 560,000 Kentuckians enrolled in the federal-state health care program for the poor and disabled.

Michael Murphy, president and CEO of Coventry Cares of Kentucky, told state lawmakers Wednesday that the company has lost $50 million in the first quarter of 2012 in Kentucky. He said the company is trying to mitigate those losses by renegotiating contracts with health care providers.

When Coventry said May 4 that it would sever its contract with ARH, the hospital chain filed a lawsuit in U.S. District Court in Lexington asking for a preliminary injunction to prevent the termination.

Coventry agreed to continue its contract until June 30 while negotiating with ARH, but negotiations stalled.

In his order, U.S. Senior Judge Karl Forester wrote that temporary injunctive relief “is essential” to prevent Medicaid recipients in the region from being “thrown under the bus.”

“The health and well-being of thousands of these patients hang in the balance, and many have already suffered hardships, stress and confusion as a result of Coventry’s sudden notice of termination of its contract with ARH,” Forester wrote. “ARH serves a high-risk population in an economically depressed area. If faced with a lengthy and costly trip to visit their primary care physician, many patients will simply forego preventive care, leading to worse health problems, higher risk, and more expensive treatment in the future.”

Forester’s ruling said Coventry may terminate its contract with ARH after Nov. 1, but he ordered Coventry to provide ARH a list of its members who have used ARH during the past five years so ARH may contact those patients.

Medicaid recipients who want to change from Coventry as their managed care organization “in order to retain ARH as their provider will be allowed time and information to make a more informed choice and will avoid harm from extensive travel and/or lack of care,” Forester wrote.

At this point, ARH has a contract with only one other managed care organization, Wellcare.

“The people who won were the people of Eastern Kentucky who stood to be harmed by Coventry’s actions in this matter,” said Rick King, vice president of legal affairs for ARH. “They are going to be able to continue getting their health care where they have always gotten it. We are extremely pleased with that result.”

Cabinet for Health and Family Services spokeswoman Jill Midkiff said the cabinet was reviewing the ruling and did not have a comment.

ARH officials have said contract negotiations stalled because Coventry was asking for a cut in Medicaid reimbursements that ARH found unacceptable. Medicaid’s rates pay 75 percent of the cost of treating patients on an in-patient basis, and Coventry had asked for a further reduction.

“That really would have harmed us greatly,” said King.

Murphy said Wednesday afternoon that he had not seen Forester’s ruling and could not comment on it.

In talking to lawmakers, Murphy blamed the majority of Coventry’s losses on faulty data the state provided to Coventry before the company bid on the Kentucky contract. The data show much lower utilization rates for patients than what Coventry is seeing. All three companies have seen much higher utilization rates than what the state numbers showed, he said.

Coventry is trying to renegotiate contracts with at least 10 hospitals in Kentucky, including the ARH group.

Coventry decided not to charge Medicaid patients a co-pay. That meant Coventry received a disproportionate share of sickly patients. The cabinet adjusted payments to the companies in April, but Murphy said that adjustment did not go far enough to cover Coventry’s costlier patients.

The state will open enrollment to patients in the three managed care companies in August, which means patients may choose to move to a different managed care provider. At that time, Coventry probably will charge a co-pay, Murphy said.

Coventry’s original complaint was with the state, ARH’s King said.

The company thought the state was not paying enough for the acutely ill patients who were transferring to Coventry so they could continue using ARH, King said.

“I really feel like the state has kind of gotten off a little easy here, because in the first place, had they been able to make the proper risk adjustment that Coventry asked for, I don’t think we’d be in court today,” King said.

In Frankfort, Cabinet for Health and Family Services Secretary Audrey Haynes told legislators that although the transition to managed care has been rocky, the state has seen savings. The first six months of managed care have generated savings of $190 million, about $50 million of which is Kentucky General Fund dollars. The federal government picks up most of the tab for the program.

Haynes said Coventry ended up with a larger share of high-use patients in some of the poorest areas of Kentucky because it made a business mistake in not charging co-pays.

Murphy said after Wednesday’s meeting with lawmakers that he would like to see the cabinet adjust payments to the managed care companies to reflect the higher rates of use by Medicaid patients. But Haynes told legislators that the state does not want to reopen or renegotiate the managed care contracts. Those contracts are for three years, she said. The switch to managed care was projected to save the state $375 million during that time, and Haynes said she thought the state was on track to reach that level of savings.

Read more here: http://www.kentucky.com/2012/06/20/2232019/judge-orders-coventry-cares-to.html#storylink=cpy

Analysis: Insureres discuss possible SCOTUS outcomes

AHIP: Private Insurance Exchanges Will Prevail Regardless of SCOTUS Ruling

Margaret Dick Tocknell, for HealthLeaders Media , June 21, 2012

Private health insurance exchanges will thrive no matter what action the Supreme Court takes on the matter of the Patient Protection and Affordable Care Act,. That’s the collective opinion three panelists offered during a Wednesday session at the annual conference for America’s Health Insurance Plans in Salt Lake City.

The future doesn’t look quite as rosy for government-run exchanges, which could lose their funding mechanisms if the Supreme Court’s decision results in significant changes to the Obama administration’s healthcare reform law.

Private exchanges are commercial health insurance marketplaces typically run by insurers and employee benefit consulting firms. While government-run exchangess are very prescribed, private exchanges have more freedom to define the benefits and services they offer.

The panel looked at three potential Supreme Court outcomes and offered scenarios depicting how private exchanges would likely be affected:

Scenario #1: The ACA is struck down
“Private exchanges will have a future with or without national healthcare reform,” says John Rich, CEO of NPH Health, which operates a private exchange with 150,000 lives in Massachusetts, New Hampshire, and Rhode Island. NFP Health was in business before national healthcare reform was enacted.

Rich explained that there’s a strong push in the health insurance market to provide self service tools that enable consumers to access and manage their healthcare benefit functions and purchases. He says private exchanges are freer to meet those needs than government-based health insurance exchanges.

He noted that wellness programs are being weaved into private HIE and offer individuals and small groups access to a service they normally wouldn’t receive. Also the private exchange platform can provide data about providers and hospital networks. Educational programs that are normally the purview of large companies with human resource departments can be scaled for small companies and individuals on a private exchange platform.

Chris Condeluci, an attorney with law firm Venable, with experience on Capitol Hill, notes that private HIE like NFP Health, existed before the healthcare law, so “obviously there’s a market for them.” He says private exchanges will survive even if the ACA is struck down because the exchange mechanism itself has bipartisan support in Congress. Condeluci served as tax counsel for the Senate Finance Committee when the healthcare reform law was being crafted.

If the law is overturned, he says policymakers who like the exchange concept will encourage its private market development over the more regulated model now in place.

Scenario #2: Individual mandate is struck down but the ACA stands
This is a worrisome option for insurers. Rich predicts that if the individual mandate were to disappear and guaranteed issue were to remain, then “health insurance prices will sky rocket.”

If both the mandate and guaranteed issue disappear, he expects that consumers will need more help in making their healthcare purchases. He sees private exchanges as filling that gap. Consumers, he says, would be open to different shopping experiences and insurance carriers will be in a position to be more creative in their product offerings such as bundling and offering discounts to keep consumers engaged in the HIE over the long term.

Condeluci notes that one of the goals of healthcare reform is to make the individual market more functional. If the mandate is struck but guaranteed issue and community ratings remain, he contends that private HIEs could become something of a “safe harbor” for consumers and small groups to navigate the market, especially if the exchanges include education tools and decision support systems.

Condeluci doesn’t expect the group market to be affected if the individual mandate is struck down. If prices increase, then private exchanges could be “an appealing option” for employers who want to move from a “one-size-fits-all insurance benefit model” to a defined-contribution model, which allows employers to simply subsidize coverage. The exchanges would take on everything else associated with the coverage.

Scenario #3: The ACA is upheld
This scenario would be the green light for private exchanges to accelerate development, says Sanjay Singh, CEO of hCentive, a healthcare technology provider. “I see hundreds of these exchanges developing. The floodgates will open.”

When he was with the Senate Finance Committee, Condeluci says he worked with Sen. Grassley (R-Iowa) and Sen. Baucus (D-MT) to develop a model for the exchanges. “We wanted to model the exchanges after private exchanges with private market solutions as opposed to what became part of the law.”

If the Affordable Care Act is upheld, he says there may be some concern that the private exchanges will compete with public ones. Condeluci says it’s more likely that states will view the private exchanges as an additional distribution channel and develop partnerships with the private exchanges. “They can tap into those exchanges in order to get more people covered by health insurance.”

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media. She can be reached at mtocknell@healthleadersmedia.com.
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Judge: State did nothing when Coventry cut out Appalachian Regional Healthcare, leaving thousands of Kentucky’s poorest high and dry

By Terry Boyd | Published: June 20, 2012

Think the Beshear Administration’s Medicaid managed care meltdown is going to go away?

Think again.

Appalachian Regional Healthcare just hit at least a triple in the doubleheader it’s playing against the state and against the Medicaid managed care providers Kentucky signed on last November.

In a highly entertaining injunction, Federal Judge Karl S. Forester ruled that one of those MCOs, Bethesda, Md.-based Coventry Healthcare, has to resume living up to its contract with Appalachian Regional Health system through November 1.

But here’s why this is news: Forester found in his injunction that Coventry sought to essentially dump its coverage of thousands of expensive Medicaid patients by cutting ties to ARH, the largest hospital network in the extremely poor sections of Eastern Kentucky.

Worse than that, Forester’s 24-page ruling makes clear the state Cabinet for Health and Family Services officials allowed Coventry to cut its network of care providers – in violation of its contractual requirements with Kentucky – to the point many of Kentucky’s poorest, most isolated people were without any reasonable access to a physician.

Last March, Coventry notified ARH it was terminating its Medicaid contract effective May 4. Coventry added that any new contract would be at lower reimbursement rates.

In turn Lexington-based ARH, which operates eight hospitals and a number of smaller clinics in Eastern Kentucky, sued Coventry in federal court. ARH also sued the State of Kentucky and another Medicaid managed care company, St. Louis-based Centene Corp., in state court.

Here’s the conclusion from today’s federal court ruling: The court granted ARH’s injunction, stopping Coventry from cancelling the contract, instructing the insurer to pay up through August 1.

But the ruling is more important than just a legal judgement on the relationship between the non-profit hospital system and the for-profit MCO.

Forester succinctly sums up what happened after Kentucky privatized Medicaid coverage: Insurers used low-ball bidding to try to attract as many Medicaid members as they could, then preceded to identify and dump those patients they identified as high-risk and high-cost. And the insurers did it without any pushback at all from state officials.

Here are some bullet points from the ruling:

• “The Court summarized this outcome as Coventry profiting or making money from its members who are using little services, but for which Coventry receives the same monthly payment from the Cabinet. The MCO receiving the high-risk patients will be paying more for services and losing money as a result.”

• Coventry offered to transfer to one of two MCO competitors – Tampa, Fla.-based WellCare Health Plans – a group of 7,500 members who were using ARH so those Medicaid recipients could continue to use ARH as an in-network facility. “ARH objected to the offer to transfer 7,500 patients, because that would have the effect of Coventry getting rid of the sickest patients and keeping those for whom little or no services are likely to be provided. Such a process is referred to as ‘adverse selection.’ ”

• Without ARH, a total of 12 contiguous Eastern Kentucky counties in lack a hospital in Coventry’s network having obstetric services.

• “Coventry has only two Outreach Coordinators for its 64,000 members in Region 8 to explain benefits, conduct clinics and health fairs, and try to manage care through preventive education. One of these two Outreach Coordinators also has responsibility for Region 7. Another has responsibility for the entire state of Virginia and Knoxville, Tennessee. The only analysis that the Cabinet has done of the adequacy of Coventry’s network without the eight ARH hospitals was to determine whether Coventry’s members are within a 45-mile radius.”

• Coventry tried to use outdated travel software to show its Medicaid members were within range of care givers when they weren’t. And there is considerable entertaining verbiage from Forester about how straight and fast a crow can fly in the mountains of Eastern Kentucky. “This 45 mile ‘as the crow flies’ standard is not found anywhere in the Cabinet’s regulations or in the Cabinet’s contract with Coventry.”

• The impact on ARH was profound, Forester finds, with the system losing patients it will likely never get back, as well as skilled employees. “Beginning with the week of May 7, 2012, ARH anticipated beginning staffing cuts of approximately 300 to 400 full-time equivalent positions. These former employees will take with them many years of experience and skill, and the probable result is reduced services. It is clear that ARH is likely to suffer irreparable harm absent an injunction. ARH could not be made whole after it has suffered the permanent loss of a substantial number of employees, physicians, patients, and services.

Since Kentucky switched hurriedly to managed care from fees for services, hospitals and other providers have claimed since last November that the for-profit insurers were not paying, paying slowly and denying patients legitimate treatments and medications. (Medicaid care is funded 80 percent by the federal government, 20 percent by states.)
The back story on Medicaid changes in Kentucky: In April, 2011, state officials asked health insurers to submit managed-care proposals for the $6 billion worth of care 800,000 poor and elderly Kentuckians receive annually under the federal/state Medicaid program. At the time, Gov. Steve Beshear touted the switch to managed care from fee-for-services as saving the state $375 million over the life of the initial three-year contracts. Insiders said officials in other states such as Georgia took as long as 18 months to make the change while Kentucky tried to do it in less than six months.

Kentucky advertises for Medicaid insurance proposals in Passport area

Kentucky advertises for Medicaid insurance proposals in Passport area

4:03 PM, Jun 20, 2012   |  
Tom Loftus
The Courier-Journal
FRANKFORT, KY. — Kentucky began the process this week of contracting with multiple companies to provide Medicaid services in the region that for the past 15 years has been served exclusively by Passport Health Plan.

On Tuesday the state began advertising for proposals from insurance companies to provide “managed care” services for Medicaid in Jefferson and 15 surrounding counties.

Bidders have until July 24 to respond.

Jill Midkiff, spokeswoman for the Kentucky Cabinet for Health and Family Services, said the state intends to select at least two companies that will begin providing Medicaid services in the region beginning Jan. 1.

Last year federal officials decided Medicaid beneficiaries in the region must be given a choice of managed care organizations. They did not extend beyond this year a waiver that has allowed Passport to be the exclusive Medicaid provider in the region.

That action came amid Kentucky’s decision last year to contract with three companies that now compete to manage health care for Medicaid recipients in Kentucky’s other 104 counties.

Mark Carter, chief executive of Passport, said it will bid to continue serving the region.

“With the track record we have, we think we’ll be able to make a very competitive proposal,” Carter said.

Because the transition to managed care in the rest of the state has been marked with complaints by providers and patients alike, some are concerned about what the pending change will mean for the 171,000 Medicaid beneficiaries in the region.

“We don’t feel that having multiple managed care contracts really supports the efforts of quality improvement and member satisfaction over time,” said Jodi Mitchell, of Kentucky Voices for Health, a health-care advocacy coalition.

Mitchell said that the federal government’s requirement of choice of managed care organizations may result in less choice of providers for Medicaid beneficiaries.

Currently a Medicaid beneficiary in the region can go to any provider because all work with Passport. “I’m not so sure that will be the same situation when you bring these for-profit companies in,” Mitchell said.

Passport was sharply criticized in late 2010 in a report by then-Auditor Crit Luallen that revealed wasteful spending and improper transfers of profits to the provider groups represented on its board. Passport responded by instituting reforms, restructuring its board and replacing all of its executives with a new team headed by Carter.

Reporter Tom Loftus can be reached at (502) 875-5136.

Greg Fischer – City funding and University Hospital

The Sunday editorial about University Hospital and Metro government’s commitment to pay health care expenses for the poor and uninsured omits a significant fact.

The city is not cutting its annual contribution to the Quality Care and Charity Trust, the fund established more than 30 years ago to help pay for indigent care at University Hospital. For the past five years, the city has contributed $7 million toward that fund annually, and the budget I proposed for the new fiscal year starting July 1 keeps that funding at the exact same level.

My administration thought it important to keep the funding consistent for another year while University Hospital charts a course for the future. There are many important questions that need to be answered as the city further evaluates the future funding of QCCT. Those questions include:

• How will the university respond to concerns raised by the state auditor, who discovered inadequate oversight of the trust?

• How will health care reform — and the pending decision from the U.S. Supreme Court — affect University Hospital?

• Will the hospital find another merger partner? What role will that play in indigent care in our city?

• How will the state’s decision regarding the status of Passport Health Plan, the Medicaid provider for Jefferson County, impact indigent care services?

• Does the flow of funds from the city to the QCCT through University Hospital and then to the medical school impact indigent care?

• Why is Louisville the only city government in the state that pays into an indigent care trust fund?

Ensuring that the poor continue to receive quality health care is important for our city and it remains a priority of my administration, demonstrated by the $7 million commitment in the city budget, which Metro Council will vote on Thursday.

Metro government spends a total of $17 million in local dollars (excluding federal money and grants) each year on paying for health care for the poor, from QCCT to services at the Family Health Center and the Department of Public Health and Wellness, among others. In addition, the city spends another $8 million in other forms of indigent care beyond the health care system — for a total of $25 million, which translates to 6 percent of our general fund providing a safety net for our most vulnerable citizens.

Despite these tough economic times when city budgets are stretched thin — and despite the outstanding questions regarding the most effective way to manage and provide indigent care — city government is committed to the poor and uninsured in this community by maintaining its same financial commitment of the past five years.

However, with limited city dollars we will continue to annually evaluate all city services and programs. QCCT will remain a viable part of such examination and discussion.


Louisville 40202

Improving care for dual eligibles could lower rehospitalizations, study finds

McKnight’s Long Term care

June 18, 2012


 More focused treatment of common illnesses among dually eligible Medicare and Medicaid beneficiaries could cut costs and lower hospital readmissions, researchers found.

In analyzing data from 958,837 hospitalizations of residents of Medicare and Medicaid-covered nursing facilities and Medicaid home- and community-based services waiver programs in 2005, investigators found that 39% of admissions might have been avoided with more effective care.

Conditions including pneumonia, congestive heart failure, urinary tract infection, dehydration and chronic obstructive pulmonary disease or asthma were to blame for three-quarters of these admissions, researchers noted.

Interventions that improve long-term care settings and expand home and community-based service programs, “will require additional investments by state Medicaid programs to yield savings or Medicare policies that provide an incentive to reduce hospitalizations,” Edith Walsh, Ph.D., lead author of the study, said.

The study was published in the May issue of the Journal of the American Geriatrics Society.

Medicaid Regulations No Match for Rural Roads


The dispute between an Eastern Kentucky hospital chain and private Medicaid operators has lawyers arguing distance versus drive time. Under state regulations, a private Medicaid operator cannot sign up a patient unless it has a doctor or hospital within 60 miles of that patient’s home. But that distance is measured as the crow flies and the state doesn’t take into account narrow and winding Appalachian roads. For many patients, it may be faster to visit a doctor that’s 70 miles away than it is to visit one that’s 50 miles away.That’s prompted the Appalachian Regional Healthcare hospital chain to argue against the 60-mile rule.

ARH says it has hospitals that are easier to get to for Eastern Kentucky patients, therefore no private operator could have a proper healthcare network without a contract with ARH. The state and private operators disagree.

“I think they do realize there is an issue there it’s just a question of how’s that’s been interpreted,” says Anne Hadreas with the Kentucky Equal Justice Center.

State regulations also say providers within a one-hour drive are in a patient’s network, but Hardreas says that isn’t often enforced.

“It definitely puts more of a burden on the consumer and we’re talking about Medicaid patients here who are by definition are low income and it means that they will have to travel farther to get the same amount of care,” she says.