Saturday, November 5, 2016

State settles dispute with former Medicaid managed-care company, will get $7.5 million from former actuarial firm

The state and St. Louis-based Centene Corp. have settled their lawsuits and other disputes stemming from the 2013 departure of Centene's Kentucky Spirit Health Plan from the state Medicaid managed-care program.

Centene said in a press release, "Kentucky Spirit will receive an immaterial cash payment from the Commonwealth's actuarial firm and each party will dismiss all claims related to the litigation with prejudice," meaning that it cannot be refiled.

The amount of the payment was not disclosed. It will come from PriceWaterhouse Coopers, which was the state's Medicaid actuary until 2014. The state will get $7.5 million from the firm in return for dismissing its claims against it, said Doug Hogan, spokesman for the state Cabinet for Health and Family Services.

Last year, the cabinet "ruled that the insurer owed the commonwealth $40 million plus prejudgment interest," Erica Teichert reports for Modern Healthcare. Kentucky Spirit had made $110 million in claims against the state, Hogan wroite.

"So, the Commonwealth will get out of this litigation receiving $7.5 million and without making any payment to any party as a result of the settlement," he wrote. "This settlement will save the Commonwealth hundreds of thousands of dollars in attorney fees and expenses.  Based on the potential liability in this case and potential burden to taxpayers, and the significant litigation expenses associated with this case, this is an excellent outcome for the Commonwealth of Kentucky."

The Centene release added, "In addition, the parties agree that neither party acted in bad faith, that they took reasonable positions in light of the applicable contractual language and that the parties acted in good faith in attempting to address a difficult situation."

The release thanked Gov. Matt Bevin "for taking the initiative to resolve this longstanding issue."

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