Danville newspaper examines problems hospitals and doctors have with state's managed-care Medicaid program

All the talk about "Obamacare" may have obscured Kentucky's biggest health-care story, Kendra Peek of The Advocate-Messenger in Danville suggests, in a look at Kentucky's troublesome shift to managed-care Medicaid. "It's the biggest story in the state that's not being told," said Vicki Darnell, president and CEO of Ephraim McDowell Regional Medical Center in Danville, told Peek. Her story is an example of how a smaller newspaper can show the impact of a statwwide policy. (A-M photo)

On Nov. 1, 2011, Medicaid in Kentucky switched to a managed care program, which essentially means management of Medicaid was outsourced to private insurance companies Peek reports. There are three managed care organizations (MCOs) statewide: Coventry Cares of Kentucky, Kentucky Spirit and WellCare of Kentucky.

The time for payments to doctors and hospitals has doubled since MCOs were implemented, McDowell Chief Financial Officer Bill Snapp told Peek. Before, they were getting paid for Medicaid patients' care within 17 to 20 days. Immediately after the switch, he said, it took as long as 70 days. Some private physicians have been forced to make hard financial decisions because of delays, and because MCOs reimburse doctors at "significantly lower rates than private insurers," Peek reports. Some hospitals, physicians and health departments have had to lay off employees, and some doctors are refusing to see Medicaid patients because they can't afford to.

In some cases, patients have had to find doctors or hospitals where the MCO they selected would be accepted, Peek reports. Hospitals cannot legally deny treatment to anyone based on insurance, but having to find hospitals or physicians that accept particular MCOs can become expensive out-of-pocket for patients. Some primary physicians may not be allowed to work at certain facilities, requiring their patients to be shifted to another doctor.

MCOs have been in the news for these issues. Coventry Cares canceled contracts with Appalachian Regional Healthcare, a network of hospitals in Eastern Kentucky, in a move that drew significant backlash. Kentucky Spirit has announced it would end its managed-care contract in July, saying it has concerns about the sustainability of the plan. (Read more)