FRANKFORT, KY. — A new study funded by the Foundation for a Healthy Kentucky says the state’s Medicaid managed-care program has led to gaps in health care services and appears to lack case management efforts needed to improve care.
Gov. Steve Beshear implemented the managed-care system in November 2011 with the goal of saving millions of dollars and improving health care for roughly 560,000 low-income and disabled beneficiaries outside the Jefferson County region.
The study — presented to the joint Health and Welfare Committee on Friday — evaluated the first eight months of the program, raising questions over the adequacy of provider networks, new administrative requirements and quality care for patients.
Among the key findings, the study reported that:
• Advocates are concerned about gaps in behavioral health care while providers said patients have experienced breaks in medication for chronic conditions.
• Provider networks continue to fluctuate, and case studies indicate that many providers do not contract with all the managed-care companies in the program.
• Providers and advocates said they have not seen “substantial evidence” of new case management programs.
• Auto-assignment of beneficiaries into health plans caused patients to switch plans at a high rate during the start-up phase.
• Managed-care companies are dissatisfied with capitation rates and question the ability to provide quality services at those rates.
• Health care providers report problems working with the managed-care companies, including delays in prior authorizations for services, claim denials and difficulties getting information and understanding company coding systems.
Friday’s study represents the initial findings of a three-year evaluation that the foundation is funding to review implementation of managed-care in Kentucky. But advocates, health-care providers and lawmakers have been decrying most of the issues for months.
Senate Health and Welfare Chairwoman Julie Denton, R-Louisville, said the report didn’t shed much light on the issues but helped reiterate some important points.
“I was right over a year ago when I said this is going to be a disaster,” she said.
Sen. David Givens, R-Greensburg, called the report a “little soft” in its discussion of the issues, but said the Beshear administration should weigh those concerns when considering the benefits and costs of expanding Medicaid.
The state originally contracted with three managed-care companies — CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky — under a three-year deal to administer the $6 billion federal and state program.
The Jefferson County region, which comprises around 170,000 patients, was managed under an exclusive contract with Passport Health Plan for the past 15 years. But the federal government required Kentucky to establish more competition in the region this year.
In response, the state has contracted with four companies — Passport, Wellcare, Coventry Cares and Humana — to serve the region, and Passport has since filed a protest against the state’s bidding process.
Denton, in a charged criticism of the health cabinet Friday, said the move will drive up operation costs and bring problems from across the state into the Jefferson County region.
Cabinet Deputy Secretary Eric Friedlander countered that many states have faced the same issues “but that is no reason not to move forward and try to make the system better, which is what we will try to do and have been trying to do.”