Consumer Advocates Worry New Medicaid Operators in Louisville Region Will Cause Problems

By Kenny Colston, WFPL

The Louisville Medicaid region will now be home to four different managed care operators. State officials announced the change today.

Joining Passport Health Plan is Humana, CoventryCares and WellCare.

WellCare and Coventry already have statewide contracts for Medicaid and Passport has operated in Louisville for years.

Passport officials say they will still try to continue maintain their high level of care, despite no longer holding an exclusive contract for the region. 

But the new dynamic has consumer advocates like Kentucky Voices for Health’s Jodi Mitchell saying patients are likely to see their quality of care decline.

“That’s really where it comes down to not consumer choice, but who the provider contracts with, because we have seen across the state where there are hospitals who chose to not do business with some of the managed care companies,” she says.

She points to Coventry as one example. The company has broken contracts with many hospitals statewide. And that could affect its provider contracts in Louisville as well.

The new organizations will officially start insuring Medicaid patients on Jan. 1


Humana, Passport Join Two Others as New Louisville Medicaid Operators

By Kenny Colston, WFPL

After decades of having one company oversee Medicaid, the Louisville area will now have four private Medicaid providers.

The Louisville area was the first part of the state to have Medicaid privatized, and Passport Health Plan has administered the program ever since.

But the rest of the state has since been privatized, and multiple operators compete for patients across the commonwealth.

The Cabinet for Health and Family Services announced today that Passport will now have competition from CoventryCares, WellCare and Humana.

Medicaid patients will be automatically assigned by the Cabinet to their new insurance provider, with letters informing people of their provider being sent out by November 1st.

The new MCOs will start managing on January 1st.




Editorial | State must avoid Medicaid chaos

By Courier Journal, Published: 12:17 AM, Oct 9, 2012

You could argue, “If it ain’t broke, don’t fix it.”

But “If it ain’t broke, don’t break it” seems more to the point in the Louisville region where Passport Health Plan suddenly is facing competition from three, for-profit companies when it comes to serving about 175,000 Medicaid beneficiaries in Jefferson and 15 surrounding counties.

The state’s hasty launch of managed care statewide last year outside the Passport region clearly was disastrous and chaotic — reports of delays and denial of care still ripple through the system.

Nonetheless, the Cabinet for Health and Family Services has introduced competition in the Louisville area to Passport by announcing it has signed contracts with three companies that will vie with Passport for business.

Passport, a non-profit consortium of doctors, hospitals, pharmacies, dentists and other health care providers, has operated for 15 years as an efficient managed-care service, establishing a solid track record providing high-quality care at low costs. Some unfortunate excesses by previous executives, mostly in travel and entertainment costs, have been corrected and should not detract from its record as a health care agency.

Cabinet Secretary Audrey Tayse Haynes said the change is to satisfy the federal government, which provides about 70 percent of Kentucky’s Medicaid money and wants more competition and choice.

It is essential that Secretary Haynes’ cabinet give its full attention to this transition to ensure people served through Passport do not encounter the disruption that roiled the rest of the state last November. That’s when Kentucky rushed into managed care contracts with three outside companies for some 500,000 Medicaid beneficiaries statewide, prompting an outcry over repeated claims of delays and denials of care.

Payments to health care providers screeched to a halt — forcing some small offices to borrow money just to meet payroll. And providers including doctors, dentists and pharmacists barraged lawmakers with individual stories of patients refused urgently needed procedures and medications.

One crucial area to be affected in the Passport region is mental health services, which currently are provided to Medicaid patients through community mental health centers based in Louisville and Elizabethtown.

Seven Counties Services serves Jefferson and six surrounding counties and Communicare, based in Elizabethtown, serves additional patients in the Passport region. They now are being forced into the same managed-care model that applies to the rest of the state’s mental health agencies.

Mental health advocates from around Kentucky were particularly outraged by last year’s changes they said caused major disruptions for people with mental illness, who depend on medications and regular care to remain stable.

Seven Counties President Tony Zipple said he’s concerned about the potential impact on that agency’s about 30,000 patients, most of whom rely on Medicaid for care. He hopes the state has learned from last year’s rocky transition, noting that there are “some real risks and challenges” for patients with mental illness.

Other advocates have responded with alarm to changes in the Passport region, including Kentucky Youth Advocates which noted the “mass confusion” of last year’s changes and disruption of health care for kids.

Jodi Mitchell, executive director of Kentucky Voices for Health, said the changes in the Passport region threaten “disruption for a lot of members who have been served many years by Passport.”

The cabinet needs to provide close oversight and swift action to ensure the smoothest transition possible. And Passport members need to remember since this is all about choice, they may choose to stay with Passport.

One crucial area to be affected in the Passport region is mental health services, which currently are provided to Medicaid patients through community mental health centers based in Louisville and Elizabethtown.

Seven Counties Services serves Jefferson and six surrounding counties and Communicare, based in Elizabethtown, serves additional patients in the Passport region. They now are being forced into the same managed-care model that applies to the rest of the state’s mental health agencies.

Mental health advocates from around Kentucky were particularly outraged by last year’s changes they said caused major disruptions for people with mental illness, who depend on medications and regular care to remain stable.

Seven Counties President Tony Zipple said he’s concerned about the potential impact on that agency’s about 30,000 patients, most of whom rely on Medicaid for care. He hopes the state has learned from last year’s rocky transition, noting that there are “some real risks and challenges” for patients with mental illness.

Other advocates have responded with alarm to changes in the Passport region, including Kentucky Youth Advocates which noted the “mass confusion” of last year’s changes and disruption of health care for kids.

Jodi Mitchell, executive director of Kentucky Voices for Health, said the changes in the Passport region threaten “disruption for a lot of members who have been served many years by Passport.”

The cabinet needs to provide close oversight and swift action to ensure the smoothest transition possible. And Passport members need to remember since this is all about choice, they may choose to stay with Passport.



Passport Medicaid region to be split among 4 companies

US says Jefferson County region must offer Medicaid patients choices

By Courier Journal, Tom Loftus, Published: 2:58 AM, Oct 5, 2012  

FRANKFORT, KY. — Beginning Jan. 1, four companies will start managing the health care of roughly 175,000 Medicaid patients in the Jefferson County region — a major change that some say raises concerns about disrupting care.

For the past 15 years, the nonprofit Passport Health Plan has served all Medicaid recipients in the 16-county region.

But on Thursday, the state Cabinet for Health and Family Services said it had signed 18-month contracts with Passport and three other companies — Humana, Wellcare of Kentucky and Coventry Cares — to manage Medicaid recipients’ care starting next year.

Other details of the contracts, including payment provisions, were not released.

Cabinet Secretary Audrey Tayse Haynes said the federal government told Kentucky it could no longer operate with a single managed-care company in the Jefferson County region and must give patients a choice among several providers.

In addition to Jefferson, the region’s other counties are Breckinridge, Bullitt, Carroll, Grayson, Hardin, Henry, LaRue, Marion, Meade, Nelson, Oldham, Shelby, Spencer, Trimble and Washington.

“Passport has been a good partner,” Haynes said. “… But the federal government now requires that individuals have a choice of providers.”

Passport, an organization of major health care providers in the region, was disappointed in the cabinet’s action, and its chief executive, Mark Carter, released a statement expressing concern that the continuity of patient care could be interrupted.

“We will be working with providers and community advocates to minimize disruption in the care of our members,” he said.

Passport had hoped that, if the state went with multiple companies, it initially would assign all recipients to it and then give them an option of moving to another company. Instead, the cabinet initially will assign recipients to one of the four companies.

The cabinet said the state will use “a high-tech matching system” that assigns a person based on “available provider networks and any special health care needs.”

Medicaid recipients will be notified which company they have been assigned to by early November, the cabinet said. They will then have 30 days to change if they wish.

Carter acknowledged that, because Passport’s current business will be shared with three other companies, cutbacks and layoffs are possible.

But he said Passport will begin an advertising campaign soon that will ask recipients to stay with the company. “And if we retain a significant percentage of the population, it may not be necessary to have layoffs.”

A federal decision

Medicaid is the federal- and state-funded health insurance program for the poor and disabled. The federal government pays about three-fourths of the cost, while the state pays the rest.

Passport is the product of an attempt during the early 1990s to save money in Medicaid through managed care. But attempts to form similar organizations in other parts of the state failed.

Last year, under great pressure to curb soaring Medicaid costs, the Beshear administration expanded managed care statewide. Direct management of the program by the state Department of Medicaid Services was handed over to three managed-care companies in Kentucky’s remaining 104 counties.

The transition to managed care in the rest of the state has been bumpy — primarily because of disputes between managed care companies and hospitals within their network of providers.

One dispute raises questions about the network of hospitals and providers that one of the new managed care companies in the Jefferson County region — Coventry Cares — may be able to assemble.

Coventry is already serving the other 104 counties, and KentuckyOne Health said in August that it would terminate its contracts with Coventry.

KentuckyOne Health is the company that resulted from the merger of Jewish Hospital & St. Mary’s HealthCare with St. Joseph Health System early this year.

KentuckyOne said it terminated its contracts with Coventry because Coventry first terminated “without cause” the contracts it had with Our Lady of Peace, a psychiatric hospital that’s part of KentuckyOne, and Taylor Regional Hospital in Campbellsville, which KentuckyOne manages.

Barbara Makovic, spokeswoman for KentuckyOne, said Thursday there’s been no change in the status of KentuckyOne’s decision to terminate its contracts with Coventry. She said she did not immediately know whether KentuckyOne would be part of Coventry’s network of providers in the Jefferson County region.

Coventry released a statement saying it is talking with Kentucky One “and we would be pleased to have them in our network if we can reach an agreement on a new contract.”

Disruption concerns

Passport Board Chairman Bill Wagner, who is executive director of Family Health Centers in Louisville, said he is concerned that “the chaos that has engulfed the rest of the state over the past year” will come to the Jefferson region.

“Confusion over plan enrollment, increased denials, payment delays and new layers of bureaucracy will definitely have an effect on access to patient care,” Wagner said.

Various health care advocates also expressed concerns about the move to multiple managed care companies.

“The transition is likely to cause disruption for a lot of members who have been served for many years by Passport,” said Jodi Mitchell, executive director of Kentucky Voices for health. “Problems have been documented elsewhere in the state about timely payment of claims to providers, pre-authorization of services causing hurdles to treatment, adequate provider networks and drug treatments might change depending on what plan you’re on.”

Andrea Bennett, deputy director of Kentucky Youth Advocates, said the past year’s experience with managed care out in the state has produced “story after story of parents having difficulty navigating the system. We’ve heard providers threaten to give up on Medicaid altogether because they are frightened and still not receiving proper payment.”

Bennett said that, when the state went to managed care last fall, “sometimes siblings were assigned to separate plans and parents didn’t understand how to switch their child to another plan.”

She strongly encouraged the cabinet to clearly communicate the options to Medicaid recipients in the Jefferson region “in a format that is easy for them to understand.”


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


by chelsea on September 17, 2012 in News You Can Use

Darrell Griffith and Passport Health Plan to Offer the Healthy Hoops Kentucky Tip-Off for Children with Asthma

Basketball legend Darrell Griffith will join Passport Health Plan and other local sponsors to offer a free asthma awareness event for children ages 7 to 13 called theHealthy Hoops Kentucky Tip-Off. The Healthy Hoops Kentucky Tip-Off will be held on Saturday, September 22, 2012 from 10:30 a.m. to 4:30 p.m. at Moore Traditional High School in Louisville, KY. All asthmatic children ages 7 to 13 are welcome to attend free of charge and can register by visiting or by calling 1-800-578-0603, press 0, then press 8429. Children do not have to be Passport Health Plan members to participate.

Under the guidance of Griffith and other celebrity basketball coaches and medical experts, children and their families participate in a full day of health awareness, basketball drills, entertainment, asthma screenings and skills workshops. The program teaches the children and their families how to lead healthy, activelives. Participants receive a comprehensive clinical screening to evaluate their asthma and receive a free consultation with an asthma health professional. Each family leaves the screening with an asthma action plan and tools to keep asthma under control. Over the past three years, members who have attended the Tip-Off event have personally experienced fewer emergency roomvisits and hospital admissions, as well as having improved medication compliance.

In Jefferson County there are approximately 18,000 children with asthma, a disease that if left unmanaged can impact a child’s ability to go to school, participate in sports, and just have fun. By attending the event, children and their families will learn how to use medications appropriately, how to monitor exercise and recreation, and how to keep asthma under control. They will also receive nutrition counseling. “We hope to serve about 200 children on this special day. Asthma has a very real financial and emotional impact on families and we’re encouraging families to use the day to learn, have fun, and meet some of their favorite basketball celebrities.” said Stephen Houghland, MD, Chief Medical Officer for Passport Health Plan.

Healthy Hoops Kentucky is sponsored by Passport Health Plan, The Kroger Co., the University of Louisville, Astra Zeneca, KentuckyOne Health, The AmeriHealthMercy Family of Companies, Mainline Broadcasting and other local organizations. It is coordinated by a coalition of community leaders who represent the following organizations: Passport Health Plan, University of Louisville, University of Louisville Athletic Department, Metro Louisville Department of Public Health and Wellness, Kosair Children’s Hospital, Jefferson County Public Schools, Astra Zeneca, University of Louisville School of Public Health and Information Sciences, Metro Louisville Government, The Kroger Co., and the Commonwealth of Kentucky.

One week left for managed-care firms to bid on area served only by Passport

Premium content from Business First by David A. Mann, Reporter

Managed-care companies have until next week to submit proposals to become one of the state’s new Medicaid contractors.

Currently, Passport Health Plan is the lone administrator of Medicaid services in a 16-county area that includes Jefferson County.

The state is looking to change that by the end of the year in favor of a system that would offer multiple managed-care organizations for Medicaid users.

On June 19, Kentucky’s Cabinet for Health and Family Services posted a request for proposals from companies interested in providing the serv­ices. The deadline to submit proposals is July 27.

Jill Midkiff, executive director of communications for the cabinet, would not disclose how many companies have submitted proposals, saying it would hinder the competitive procurement process.

Asked how many companies the state planned to hire, Midkiff said it would be more than one.

Passport contract began in 1997

The cabinet’s Department for Medicaid Serv­ices has contracted with Passport since 1997. The company provides Medicaid-covered serv­ices to about 180,000 eligible members.

Earlier this year, the U.S. Centers for Medicaid and Medicare Services advised the cabinet that it would not renew a waiver that allows Passport to be the single managed-care provider in the region.

That means the state will have to have more than one-managed care organization, beginning in 2013.

An attempt to reach CMS officials for comment on this story was unsuccessful.

As of November 2011, Medicaid recipients in Kentucky’s remaining 104 counties already have a choice of three managed care organizations — CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky.

Passport’s Carter optimistic

Passport CEO Mark Carter said his company plans to bid on the contract.

Medicaid managed care is Passport’s only line of work. If the company wins one of the contracts, Carter said, it’s not clear what the impact of having at least one competitor would have on the company’s revenue.

Carter said the state hasn’t told his company how it will divide members between the winning bidders.

But, he said, current members have a high degree of satisfaction with Passport.

“We think we’re well-positioned and in good shape,” Carter said.


University Health Care Inc., which does business as Passport Health Plan, has managed Medicaid services in a 16-county region of Kentucky, including Jefferson County, since 1997.
Passport came under fire after a 2010 audit revealed a lack of internal controls and trans­par­ency, governance problems, excessive spending and conflicts of interest by former officials.
Since then, the company has undergone leadership changes, including the appointment of CEO Mark Carter. An audit earlier this year showed improvement from 2010.
Like any other company, Passport can compete for one of the managed-care contracts that are up for grabs in the 16-county region this year.

Republican Leader Calls On Beshear to Opt Out of Medicaid Expansion


The highest-ranking Republican in the Kentucky state House is calling on Governor Steve Beshear to reject an expansion of Medicaid set forth in the Affordable Care Act.

The Supreme Court ruling on the healthcare law allows states to opt out of the expansion of the program. House Minority Floor Leader Jeff Hoover wants Beshear to follow other states that have opted out.

Hoover says expanding the program in Kentucky would put an even bigger burden on the state budget, even with managed care operators running the system.

“But if Kentucky does not opt out of this Medicaid expansion, we will see further reductions in our funding levels for educations and other things or we will have to face a significant tax increase, which obviously no one wants,” he says.

Beshear has said he is reviewing the court’s ruling before deciding whether to expand Medicaid.

The governor also says he is readying an executive order to set up state-run health insurance exchanges, another part of the law.

Currently, Medicaid is one of the largest drains on the state budget, even with a private management system in place.

And Hoover says those who would qualify for the expanded Medicaid program have other avenues for health care.

“There’s still a safety net in place for those who truly need it. But we just believe that now we should opt out of bringing on new people into the Medicaid system in Kentucky,” he says.

Court holds that states have choice whether to join medicaid expansion

The Court’s decision on the constitutionality of the Medicaid expansion is divided and complicated.  The bottom line is that: (1) Congress acted constitutionally in offering states funds to expand coverage to millions of new individuals; (2) So states can agree to expand coverage in exchange for those new funds; (3) If the state accepts the expansion funds, it must obey by the new rules and expand coverage; (4) but a state can refuse to participate in the expansion without losing all of its Medicaid funds; instead the state will have the option of continue the its current, unexpanded plan as is.

The votes for this outcome are divided among several opinions.  Three Justices – the Chief, Justice Kagan, and Justice Breyer – took the position that depriving a state of all of its Medicaid funding for refusing to agree to the new expansion would exceed Congress’s power under the Spending Clause.  Although Congress may attach conditions to federal funds, they concluded, it may not coerce states into accepting those conditions.  And in this case, taking away all the states’ funds for the entirety of its Medicaid program just because it disagreed with a piece of the program would be coercive.  But the remedy for that constitutional violation is not to declare the expansion unconstitutional – such that even states that want to participate would not have the option.  Instead, the plurality held that the provision of the statute that authorized the Government to cut off all funds for non-compliance with the expansion was unconstitutional.  The result is that states can choose to participate in the expansion, must comply with the conditions attached to the new expansion funds if they take that new money, but states can also choose to continue to participate only in the unexpanded version of the program if they want.

Justices Ginsburg and Sotomayor would have held the entire expansion program constitutional, even the provision threatening to cut off all funding unless states agreed to the expansion.  Their votes created a majority for the proposition that the overall expansion was constitutional, and that states could choose to participate in the expansion and would have to comply with the expansion conditions if they did.

But there was still no majority about what to do about the states that do not want to participate in the expansion – the Chief Justice’s 3-Justice plurality voted to strike down the provision allowing the Government to withhold all funds from states that reject the expansion; Justices Ginsburg and Sotomayor voted to uphold it.

The deadlock was broken by the dissenters.  Justice Scalia – writing on behalf of himself, and Justices Kennedy, Thomas, and Alito – agreed with the Chief’s plurality that the threat to withhold all funds was unconstitutionally coercive.  But they would have held that the consequence is that the entire expansion program should be stricken.  The result would have been that even states that wanted to participate in the program could not.  The plurality’s approach of simply striking down the provision that allowed withholding all funds if the state refused the expansion was, in the dissenters’ view, tantamount to rewriting the statute.

At this point, that meant that there were 2 votes to uphold the expansion in its entirety, 4 votes to strike the entire expansion down, and 3 votes to strike down only the provision withholding all funds for non-compliance with the expansion mandate.  So where does that leave things?

Fortunately (for the sake of clarity at least), Justices Ginsburg and Sotomayor resolved the ambiguity by voting with the plurality on the remedy question.  That is, these Justices voted that if the statute was unconstitutionally coercive, then the remedy would be only to strike down the all-or-nothing sanction.

The consequence was a bottom line of 7 Justices – the Chief, Breyer, Kagan and the four dissenters – finding the expansion unconstitutional.  But a different majority – the Chief, Ginsburg, Breyer, Sotomayor and Kagan – held that the remedy for the violation was to strike down only the provision allowing the federal government to withhold all Medicaid funds unless a state agrees to the expansion.

Letter – Bring other medical, dental plans up to Passport’s level

I am the managing doctor for Kentuckiana Oral and Maxillofacial Surgery, a five-physician practice based in Jefferson and Bullitt Counties. I read with great interest the editorial about Passport that appeared in the June 5 edition of The Courier-Journal.

Our practice has been in network with Kentucky Medicaid since July 1, 2004, when we first opened our doors. Due to our specialty, we perform both medical and dental procedures, so we file to both medical and dental plans. Because we are located in Region 3, we fall under the Passport umbrella. Passport is the Kentucky HMO plan that covers 16 counties. But because we are referred patients from all over Kentucky, we see patients who are covered by the new Medicaid plans as well, so we also contracted with each new medical plan and each new dental plan. That puts us in a fairly unique position to have first-hand knowledge of how each plan works.

Passport puts the patients first. There’s no doubt in my mind about that. Their requirements for a patient’s care are well-outlined. They make it very clear to the medical and dental providers just what they will and won’t cover. Passport has streamlined the authorization process for large procedures, and they have eliminated authorization requirements for procedures that are performed on a daily basis or emergent in nature. Passport lets us spend our time doing what we do best — performing necessary medical and dental services. The medical staff and the business staff in our offices don’t waste time arguing with Passport trying to get permission to do necessary work or trying to get paid for the work that has already been done.

This cannot be said for the new plans. We have trouble getting even the most routine procedures authorized. Needed treatment is often denied or delayed. And I’m not talking about a delay of a few days — or a delay of a few weeks; I’m talking about a delay of a few months or more. And once the work is performed, the doctors cannot be sure if/when/how they’ll be paid.

Surely this is not what our governor and Medicaid commissioner had in mind when they contracted with these new plans. And, as medical and dental providers are opting out of working with these new plans, the number of our patients who are covered by these new plans is increasing. It is no longer unusual to have a patient drive from Pikeville or Bowling Green because they can no longer find an oral surgeon near their home.

So I have a few questions for those in Frankfort who are making these decisions:

• Why would you allow the new plans into Region 3 when you’ve seen the chaos they have created elsewhere in the state?

• Don’t you think it’s time to review the manner in which the new plans are paid? It is my understanding that they receive a certain amount of money at the beginning of each month. After they pay out a certain amount, the rest is theirs to keep. So when these new plans deny and delay care, they make more money. That has to be a conflict of interest. Perhaps we need more non-profit organizations like Passport handling these claims for service.

• Aren’t there companies in Kentucky who could handle the Medicaid claims? Wouldn’t it make sense to keep taxpayer money in Kentucky? Wouldn’t it make sense to work with companies that are based right here so oversight is easier?

My partners and I want to continue providing care to the Medicaid population, but if Gov. Steve Beshear and Acting Commissioner Wise choose to “open the floodgates” in Region 3, we may not be able to do so.

Let’s see if our government officials can’t figure out a way to bring the other 104 counties in Kentucky up to the same level of medical and dental care that the 16 Passport counties currently experience.


Kentuckiana Oral and Maxillofacial Surgery

Louisville 40202

The Medicaid managed care revolution – discredited in other states – promises to cause more chaos in Kentucky

By TERRY BOYD | Published: JUNE 5, 2012

 Kentucky is moving as quickly as possible in the opposite direction of the successful, progressive states.

At the time Beshear Administration officials are trying to figure out how to expandMedicaid managed care madness into Jefferson County and the surrounding 14 counties – currently are under Passport Health Plan – Connecticut (the No.1 state by per capita income not counting Washington D.C.) is getting rid of managed care organizations.

During the past decade, many states stopped trying to manage their own Medicaid fee-for-service plans, handing over manged care contracts to private insurers. The theory was, the private sector knows how to cut costs while upping care. Magic.

Not in Kentucky.

Last year, Kentucky officials dealt out about $700 million in Medicaid managed care contracts to three publicly traded insurers: Centene Corp. of St. Louis, Tampa, Fla. based WellCare Health Plan and Coventry Health, based in Bethesda, Md. Since then, there’s been hell to pay, with law suits, denied care, insurer-vs-provider showdowns and more law suits.

We rarely if ever agree with the Courier-Journal editorial board about anything. But we agree with the take of this editorial from yesterday:

 … it appears that Passport — which by all accounts provides very good care to more than 170,000 low-income and disabled people — come Jan. 1, 2013, will be forced to compete with private, for-profit Medicaid companies such as those operating elsewhere in Kentucky.

 State and federal officials say this is about competition and choice.

We say the Passport region needs to be afraid. Very afraid.

Three private, for-profit companies won state contracts last November as a Medicaid cost-savings initiative by the administration of Gov. Steve Beshear. Not only was the start-up a disaster of bureaucratic confusion and delay, horror stories continue to pour forth on a daily basis of battles people face to get basic health care they took for granted under Medicaid services previously run by the state.

Essentially, Passport will have to compete on a low-price bid basis with the aforementioned companies, as well as against huge potential competitors such as Louisville-based Humana and United HealthCare, based in Minneapolis.

This is a plan so flawed that at the exactly same time Kentucky was implementing its transition to Medicaid managed care last year,  Connecticut, “insurance capital of the world,” was dropping private MCOs.

Kentucky officials say that there are just initial growing pains.

But in in this December article by USA Today reporter Phil Galewitz is something closer to the truth:

State officials say the companies, including Hartford-based Aetna, did not fulfill their promise of lower costs and better care. ”Connecticut has a 15-year history with managed-care organizations, and there has been a diminishing confidence in the value of what they are providing,” says Mark Schaefer, the state’s Medicaid director.

Connecticut officials went back to square one, canceling $800 million in contracts while retaining the non-profit fee-for-services provider, according to media reports.

The funny thing is, this whole Kentucky switch has been incredibly painful for the insurers, who you would think would be making out like bandits.

An insider sent us analysts’ reports from Citi Personal Wealth Management, which contains a lot of read-it-and-weep for Coventry investors:

Managed Care Weekend Update: Week Ending June 2, 2012

Highlights — The focus this week is on first quarter Medicaid results in Kentucky, and not surprisingly, things weren’t good. We estimate the four plans in the market lost a combined $130 million in the first quarter, with Coventry bearing the brunt of the hit, absorbing an estimated $70 million loss.

Worst case scenario for state officials: Coventry flees Kentucky with its tail between its legs, leaving officials at Kentucky’s Cabinet for Health and  Family Services wondering what hit them.

Worst case scenario for Medicaid members in Jefferson County: Passport gets pushed out, with the chaos out in the state interrupting dependable patient services and provider reimbursement here.

Most likely scenario in Kentucky, as usual: No one wins!