Kentucky Agency Asks Judge to Drop Contempt Order over Medicaid Lawsuit

Kentucky Agency Asks Judge to Drop Contempt Order over Medicaid Lawsuit


The Kentucky Cabinet for Health and Family Services has apologized to a federal judge and is asking him to drop a contempt order against the agency. U.S. Senior Judge Karl Forester held the agency in contempt last month after ruling that the cabinet did not comply with his order to process thousands of requests from Appalachian Regional Healthcare patients who wanted to switch Medicaid managed-care companies.

The issue stems from a lawsuit ARH filed against Coventry Cares, a Medicaid managed-care company that has decided to cut ties with the ARH system.

The Lexington Herald-Leader reports an attorney for the state agency filed a motion on Friday that said the judge’s order wasn’t clear and specific and the cabinet’s failure to abide by it was “inadvertent.”

Kentucky and Indiana Medicaid Expansion Impactful (Re-post)

With no health insurance and a family  income of about $15,000 a year, William Helton of Shively often delays going to the  doctor because of the expense.But he and roughly 16 million other low-income Americans — including more than 600,000 Kentuckians and Hoosiers — may soon get coverage through Medicaid if governors choose to expand the program in 2014 under the federal health reform law.That’s a big “if.”The Supreme Court’s June 28 decision to uphold the Affordable Care Act forbade the federal government from withholding current Medicaid funds from states that refuse to expand the state and federal health insurance program for the poor and disabled.Neither Kentucky Gov. Steve Beshear, a Democrat, nor Indiana Gov. Mitch Daniels, a Republican, have said whether they plan to expand Medicaid — meaning very different health-care landscapes could emerge in the next few years.

The debate comes down to coverage vs. cost.

Proponents of expansion say it would cover millions of vulnerable Americans, saving money in the long run by avoiding more expensive emergency room care and heading off long-term health problems.

According to a report by the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute, more than 620,000 Kentuckians and Hoosiers would be newly enrolled in Medicaid in 2019 under the expansion, including more than 460,000 who were previously uninsured.

“It’s pretty obvious this is going to result in significant savings across the system. People getting uncompensated care will have their health care paid for,” said U.S. Rep. John Yarmuth, D-Ky. 3rd District. “Then there’s the moral side of this. We have an opportunity to prevent a lot of sickness, suffering and needless deaths.”

Yarmuth and others also point to an unintended consequence of the court decision — that some of the poorest people wouldn’t be eligible to shop for insurance in new marketplaces called exchanges, meaning they would remain uninsured if their states don’t expand Medicaid.But opponents say states can’t afford to expand Medicaid, especially since they must also juggle other financial responsibilities such as education funding. Although the federal government will pay for all of the Medicaid expansion costs at first, that would decline to 90 percent by 2020.Daniels, who is stepping down as Indiana’s governor to lead Purdue University, said expanding Medicaid would add about half amillion Hoosiers to Medicaid — at a cost of about $2 billion between 2012 and 2020. Last week, he asked for input from gubernatorial candidates, saying “the costs and consequences of our decision … willbe borne by the next administration.”Kentucky’s Beshear said he’s still evaluating the potential cost to the state.U.S. Sen. Mitch McConnell, R-Ky. and Senate minority leader, said repealing the entire health-care law will be “the Senate’s first item on the agenda.”

“In the meantime, given Kentucky’s struggles to finance its current Medicaid program and the uncertainty of futurefederal funding, I hope Kentucky’s lawmakers would not expose the commonwealth’s taxpayers to more open-ended expenses they cannot afford,” he said in a statement. “Additionally, a dramatic expansion of Medicaid enrollment would obviously exacerbate the already serious access-to-care problems we face in Kentucky.”

More than 50 of Kentucky’s 120 counties — and almost 100 pockets within counties — are deemed by the federal government to be short on health professionals.

Who gets covered
The stakes are high for people such as Helton, who in better times worked construction but lately does day jobs for a friend’s moving company.A married father of five grown children, he has mild high blood pressure, takes medication for anxiety, and recently was hospitalized for unexplained vomiting. He pays about $15 a visit to get care at the Family Health Centers-Portland clinic — but sometimes finds even that small fee a burden.With Medicaid, “I probably wouldn’t hesitate to go to the doctor anymore. There’s a lot of times I have aches and pains and don’t go,” said Helton, 53.When people forgo care, health experts say, small health problems can become big, costly ones.Expanding Medicaid “is going to help,” Helton said. “People might start taking better care of themselves.” Currently, qualifying for Medicaid varies by state.

In Kentucky, for example, working parents are eligible if their earnings equal 62
percent or less of the federal poverty level — no more than about $9,000 for a family
of two. Childless adults younger than 65 who aren’t disabled are ineligible in most

According to the Kaiser Family Foundation, about 885,000 Kentuckians and 1.15 million Hoosiers are enrolled in Medicaid.

Under the expansion, Medicaid would effectively cover people who earn up to 138 percent of the federal poverty level — currently $15,415 for one person and $31,809 for a family of four.

The Congressional Budget Office has estimated that Medicaid would have 16 million new enrollees under health reform, many of them childless adults. Health-care experts also say people who are currently eligible may choose to sign up after renewed attention to the Medicaid program.States that now have high percentages of uninsured people and more limited Medicaid coverage will see a greater impact from reform, said Robin Rudowitz, associate director for the Kaiser commission.The Kaiser report says Kentucky would see a 57 percent reduction in the number of uninsured, low-income adults under a Medicaid expansion, the largest drop in the nation. Indiana would see a 44 percent reduction.According to the U.S. Census Bureau, 15.5 percent of Kentuckians, or 663,000 residents, lacked health insurance from 2008 to 2010; and 12.8 percent of Hoosiers, or 813,000 people, were uninsured during that period.

Officials in the Kentucky Cabinet for Health and Family Services would not discuss the issues they are weighing as they work with Beshear on the question of expanding Medicaid.

“We are in contact with the appropriate federal agencies, and we are awaiting guidance on how the opinion on the ACA affects Medicaid expansion choices for states,” Beshear said in a statement. “We’re going to take enough time to answer all our questions before we make a determination on expanding the program in Kentucky.”

Yarmuth urged Beshear to expand Medicaid, saying he expects Kentucky will eventually make “the right choice.”

Yarmuth said failing to expand Medicaid would mean turning down $12 billion from the federal government over the first five years. Kentucky’s added cost during 2014-2019 would be $515 million, the Kaiser study said.

Over that same period, the study said, the federal government would spend $9 billion in Indiana; the state, $478 million.

Rudowitz pointed to a July study in the New England Journal of Medicine that compared three states that expanded Medicaid eligibility for adults — New York, Maine and Arizona — with neighboring states that did not.

Researchers found that expanding Medicaid reduced the adult death rate by 6.1 percent in those states, compared with neighboring states.Bill Wagner, executive director of Family Health Centers, which has seven sites in Louisville and serves about 43,000 patients annually, said his clinics would most likely see an influx of people if Medicaid expands. The health law has also provided grants to help his organization expand and serve more people.“We hope (Beshear) makes the right decision. It’s really important for our patients,” he said. “I don’t see how he cannot opt in.”
‘How do you pay for it?’
But the law’s opponents say they see a big reason to opt out.Tom Underwood, state director for the Kentucky chapter of the National Federation of Independent Businesses,
echoed many others. “Our major concern is cost,” he said. “How’s it going to be paid for year after year? We’re all for health care, but how do you pay for it?”Underwood said he’s concerned that Medicaid costs might eventually require new or higher taxes, and he worries how that might affect small businesses.Noting that states are struggling now to meet their obligations, he said: “If they don’t have any money now, how are they going to have money for this?”A July report from the Congressional Budget Office said the high federal share of expansion costs is an incentive to expand the program, but a “significant disincentive … is that states would ultimately have to bear some costs for an expansion …during a period when their budgets are already under pressure, in part from the rising costs of the existing Medicaid program.”

In 2010, the federal share of Medicaid payments in Kentucky was nearly 80 percent; in Indiana, it was 76 percent.

Experts say federal-state breakdowns for current Medicaid recipients would remain the same under health reform. But all of the money, state or federal, comes from taxpayers.

The congressional budget office and the staff of the Joint Committee on Taxation estimate that the insurance coverage provisions of the health-care law, including the Medicaid expansion, will have a net cost of $1.168 trillion from 2012 through 2022.

That’s a reduction from the $1.252 trillion projected before the Supreme Court decision, which authors say is more the result of spending reductions from lower Medicaid enrollment than offsetting cost increases from greater participation in insurance exchanges.

Rudowitz said if states don’t expand Medicaid, some areas would still see changes.

For example, she said a Medicaid program that provides financial assistance to hospitals serving a large number of low-income patients, called the Disproportionate-Share Hospital program, or DSH, is scheduled to reduce payments
under health reform in the anticipation that more Americans gain coverage.

Regardless of whether the state expands Medicaid, facilities such as University Hospital in Louisville would still see those payments drop.

Also, uninsured people earning 138 percent of the federal poverty level or less, who currently aren’t eligible for Medicaid, are likely to remain uninsured if a state doesn’t expand Medicaid.

That’s because they also aren’t eligible to get insurance through exchanges, since the health law’s authors assumed they’d be covered through expanded Medicaid. Yarmuth said Congress “is going to have to address this.”

Wagner agreed, saying: “It makes no sense for the poorest of the poor not to benefit in any way from the law.”


By the numbers

250,704 — Estimated number of previously uninsured Kentuckians newly enrolled in Medicaid, as of 2019, if the state expands Medicaid
215,803 — Estimated number of previously uninsured Hoosiers newly enrolled in Medicaid, as of 2019, if the state expands Medicaid
57.1 percent — Percentage reduction in uninsured adults in Kentucky with incomes less than 133 percent of the federal poverty level, if the state expands Medicaid
44.2 percent — Percentage reduction in uninsured adults in Indiana with incomes less than 133 percent of the federal poverty level, if the state expands Medicaid
$2 billion — Estimated cost, between 2012 and 2020, of a Medicaid expansion in Indiana
$1.168 trillion — Estimated net cost of the insurance provisions of the health reform law over the 2012-2022 period

Sources: The Kaiser Commission on Medicaid and the Uninsured; Urban Institute; Congressional Budget Office; Joint Committee on Taxation; Indiana Gov. Mitch Daniels’ office; Milliman

Medicaid Providers May Face the Music Over Unpaid Taxes

A new government study shows health-care providers collected billions in Medicaid payments while failing to pay federal taxes, underscoring the need for reform.
Kathleen Hoffelder
CFO Magazine
Medical suppliers, home-care providers, and hospitals that are delinquent on their taxes could face changes in Medicaid reimbursement, thanks to a U.S. government study that showed widespread tax evasion by health-care providers in three states.

A U.S. Government Accountability Office (GAO) report to Congress last month revealed that 7,000 Medicaid providers in Florida, New York, and Texas which received more than $6 billion in reimbursements under the American Recovery and Reinvestment Act, failed to pay almost $800 million on their federal taxes from before 2009. (The Act, which was created in 2009 to promote business growth, gave states almost $90 billion in federal funds for Medicaid.)

To crack down on delinquent Medicaid providers, the GAO recommended that the IRS explore new ways to collect unpaid taxes from them. In particular, the report discussed using a series of tax levies on, or seizures of, health-care providers’ Medicaid payments. That would mark a dramatic change from the current way of collecting unpaid taxes, a change that would require an act of Congress. The IRS maintains that since Medicaid reimbursements do not, as of now, qualify as federal payments, it could not impose a levy on them.

Still, the current way of collecting unpaid taxes from Medicaid providers needs to be changed, says Richard Hillman, managing director of the Forensics Audits and Investigative Service at the GAO and author of the report. His study, which took an additional in-depth look at 40 Medicaid business and individual providers, wasn’t representative of the whole population, he says, but “it was a pretty significant result.”

The GAO estimates that as much as $330 million could have been collected from Medicaid providers in the three states if the IRS had a more stringent collection policy in place.

The IRS, for its part, agreed with the GAO findings that alternative collection measures need to be taken and plans to discuss the topic with the Treasury’s Office of Tax Policy. It cautioned, however, that any potential legislation related to the collection of outstanding tax debts from Medicaid providers could impact the basic structure of the Medicaid program. Medicaid is funded by the federal government but payments fall under state jurisdiction due to they way they are disbursed. 

Operationally it would be very simple to make the changes necessary and have better collection policy, according to Jeff Leston, CEO of Castlestone Advisors, a health care anti-fraud technology solutions provider that works with the federal Medicaid and Medicare offices. But “the IRS has many restrictions on what [it] can do with [its] data [on Medicaid providers],” Leston says.

Any change related to tax collection from Medicaid providers would have to go through Congress. Senators Max Baucus (D-Mont.), Tom Coburn (R-Okla.), Carl Levin (D-Mich.) Charles Grassley (R-Iowa) and Orrin Hatch (R-Utah) requested the GAO report but they admit they have more work to do. In a statement following the release of the report, Sen. Coburn said the “GAO’s findings raise serious questions about steps that need to be taken to improve the integrity of the Medicaid program.”

A review of Medicaid providers in other states could add fuel to the fire. The GAO noted in its study that “given that we found over $6 billion of payments made to tax-delinquent Medicaid providers in just three states, a more rigorous review of the potential costs and financial benefits of implementing enhanced continuous and other levies of Medicaid payments is warranted.”

Further study could begin with California. The GAO had to exclude the state from its report because California did not comply with requests for Medicaid payment data over eight months. “There was a material difference between the actual detailed data we got and the information they had reported publicly,” says the GAO’s Hillman.

Regardless of which states may come under the microscope next, the GAO doesn’t plan on sitting on the sidelines. “We are very interested in ensuring our recommendations are effectively implemented. We will be following up on a periodic basis with the IRS on the status of  their efforts,” says Hillman.

ACA Will Raise Pizza Prices

Papa John’s CEO: Affordable Care Act will raise pizza prices 11 cents

Posted: Aug 08, 2012 11:04 AM EDT Updated: Aug 08, 2012 12:47 PM EDT

by Mike Durkin – email

Papa John’s near West End, Richmond, Va. (taberandrew / Flickr)

MINNEAPOLIS (KMSP) -Papa John’s founder and CEO John Schnatter says President Obama’s Affordable Care Act will increase his company’s costs, forcing him to increase the prices of his pizzas.

“Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis,” Schnatter told shareholders on a conference call last week. “If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders best interests.”

Schnatter is a Mitt Romney supporter and outspoken critic of President Obama. In April, he hosted a high-priced, private fundraiser for Romney at his home in Anchorage, Kentucky.

That fundraiser led to Obama supporters calling for a Papa John’s boycott on Facebook and Twitter.

Calls for boycotts were rekindled this week after Schnatter’s comments on the Affordable Care Act and Papa John’s pizza prices. It turns out a lot of Twitter users are more than happy to pay an extra 11 cents per pizza if it means health care for employees.

Feds Sidestep Stubborn GOP Govs to Build Health Insurance Exchanges

By The Associated Press

Posted 9:34AM 08/07/12


WASHINGTON — Don’t look now: The feds may be outmaneuvering GOP governors who’ve balked at carrying out a key part of President Barack Obama’s health care overhaul law.

Opponents of the law say they won’t set up new private health insurance markets called exchanges. But increasingly it’s looking like Washington will just do it for them.

That means federal officials could be calling the shots on some insurance issues that states traditionally manage, from handling consumer complaints to regulating plans that will serve many citizens.

Unless Mitt Romney wins in November, that could turn into a political debacle for those dug in to fight what they denounce as “Obamacare.”

“You’re kind of rolling the dice if you think [Obama’s health care law] will go away,” said Kansas Insurance Commissioner Sandy Praeger, a Republican. If Romney either doesn’t win or does, but can’t make good on his vow to repeal the overhaul, “you are just giving up a lot of authority.”

The law envisioned that states would run the new markets, or exchanges, with federal control as a fallback only. But that fallback now looks as if it will become the standard option in about half the states — at least initially.

It would happen through something called the federal exchange, humming along largely under wraps on a tight development schedule overseen by the Health and Human Services Department in Washington.

Exchanges are online markets in which individual consumers and small businesses will shop for health insurance among competing private plans. The Supreme Court’s health care decision left both state exchanges and the federal option in place.

The exchanges are supposed to demystify the process of buying health insurance, allowing consumers to make apples-to-apples comparisons. Consumers will also be able to find out whether they’re eligible for new federal subsidies to help pay premiums, or whether they qualify for expanded Medicaid.

It’s all supposed to work in real time, or close to it, like online travel services. Open enrollment would start a little over a year from now, on Oct. 1, 2013, with coverage kicking in the following Jan. 1.

Eventually more than 25 million people are expected to get coverage through exchanges, including many who were previously uninsured. As exchanges attract more customers, competition among insurance plans could help keep costs in check.

But only 14 states and Washington, D.C., have adopted plans for their own exchanges: California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Nevada, New York, Oregon, Rhode Island, Utah, Vermont, Washington and West Virginia. Some could still backtrack.

Kentucky and Minnesota are pushing forward with their own exchanges, and others may be able to partner with the federal government. States face a Jan. 1, 2013, deadline for Washington to sign off on their plans.

Meanwhile, development of the federal exchange is advancing.

HHS contractors are working feverishly to design and test computer systems that would make the federal exchange come alive. It’s a top priority for the Obama administration, which is guarding the details closely. Estimated price tag: at least $860 million.

The government is “on track in moving aggressively to set up this market structure,” Mike Hash, the HHS official overseeing the effort, told industry representatives, state officials and public policy experts at a recent Bipartisan Policy Center conference. “We’re on track … to go live in the fall of 2013.”

“I think the pressure is on them to deliver, and I fully expect they will,” said Jon Kingsdale, who was the founding director of the nation’s first health insurance exchange, created under then-Gov. Romney’s health care overhaul in Massachusetts.

Now a consultant to states, Kingsdale says he expects the federal exchange to look very much like the one already operating in his home state.

There will be a website, and you’ll be able to put in your ZIP code and get a list of available health plans. There will be a section where you can find out whether you qualify for subsidies, or whether you might need to look at Medicaid. There will be cost calculators to allow you to compare different levels of coverage: platinum, gold, silver and bronze. There will be tools that allow you to see whether your doctor or hospital is with a particular plan.

In an interview, HHS official Hash said the government is undaunted by the prospect of running exchanges in half the states or more.

“What we are talking about building here is a system that is really using 21st century technology, and it’s not dependent like in the past on bricks and mortar or how many (federal employees) you have,” said Hash. “Information technology produces the opportunity for efficiency. It’s much more easily scalable if you need to do it for a larger number of individuals.”

Paper applications also will be accepted. And Hash expects people will have plenty of help to navigate the system, from volunteers to insurers advertising to reach new customers.