Lawmakers join Ky's largest addiction treatment provider to oppose Medicaid payment cuts; centers trying to negotiate cuts

By Deborah Yetter and Tom Loftus
Kentucky Lantern

The state’s largest provider of drug and alcohol treatment is warning that looming cuts in Medicaid reimbursement to some providers could damage efforts to curb addiction that has engulfed Kentucky — just as the state is showing improvements.

Matt Brown

“Kentucky has made significant strides in access to treatment,” Matt Brown, chief administrative officer for Addiction Recovery Care, or ARC, told a legislative committee Tuesday. “With these cuts, it could completely set back addiction treatment in our state 20 years.”

A handful of companies that provide substance use disorder treatment, including ARC, have been notified they face cuts of 15% to 20% from some private insurers that handle most Medicaid claims, Brown told the committee.

Brown noted that overdose deaths in Kentucky have declined for the past two years after years of rising. Kentucky also has the most treatment beds per resident, most of them through ARC, he said.

The state’s latest annual overdose report, released in June, shows a decrease in deaths to 1,984 from 2,200 the year before, a decline of 9.8%.

Brown was joined by Deron Bibb, chief financial officer for Stepworks, a recovery program based in Elizabethtown, and ARC executive John Wilson, also executive director of the Kentucky Association of Independent Recovery Organizations, speaking to the interim joint Health Services Committee about the cuts.

“This will likely result in higher overdose rates, higher recidivism, more crime and incarceration,” Bibb said. “We need to understand the full scope and impact of these cuts.”

The cuts have been announced by three of the six managed care organizations, or MCOs, private insurance companies that handle claims for most of the state’s $16 billion-a-year Medicaid program, Brown said.

Under their contracts with the state, the MCOs generally have authority to set rates they pay providers. The state pays MCOs a fixed amount per member to cover Medicaid costs.

One company also has begun notifying patients it will no longer cover addiction services at ARC effective Sept. 30, Brown said.

He did not identify the MCOs that have announced cuts and declined to do so after the hearing, saying ARC and other companies are still attempting to negotiate with them.

The Kentucky Association of Health Plans, which represents the MCOs, said in a statement released Thursday by spokesman Tyler Glick, that its members “are proud to work collaboratively with quality, trustworthy providers of behavioral health and substance use disorder treatment” and access to those services is “top of mind” to ensure those in need receive care.

“Health plans strive for the best networks possible and are encouraged by the state to prioritize plan member outcomes and value-based care,” it said.

Sen. Stephen Meredith, R-Leitchfield and co-chairman of the health committee, said Tuesday the lawmakers likely would seek more testimony on the subject, including from the MCOs.

“I know there’s two sides to every story,” he said.

Wellcare, with 420,000 members, is the largest of the six MCOs followed by Passport by Molina, Aetna, Anthem, Humana and United HealthCare. Together they oversee payment of Medicaid claims for about 1.4 million Kentuckians.

Wilson said the recovery organization he represents wants to make sure lawmakers are aware of the situation and already has asked them to voice concerns.

“There’s going to be real world consequences and I think it’s important to let legislators know what’s taking place,” he said.

Some defenders benefitted from owner’s largesse

Several lawmakers have signed letters urging that the MCOs suspend any cuts to substance use treatment until the General Assembly can further review the matter. They include some in key leadership positions and some who have benefited from campaign donations from ARC founder and owner Tim Robinson and his employees.

ARC, a for-profit company based in Louisa, has emerged as the state’s largest and fastest growing provider of addiction services, financed largely by Medicaid, the government health plan with the majority of funds from the federal government. Growth took off after 2014 when substance use treatment was included in the Medicaid expansion authorized by the Affordable Care Act.

The Lantern reported the company took in about $130 million last year in Medicaid funds and was by far the largest recipient of the about $1.2 billion the state spent on substance use treatment.

The company and Robinson also have become among Kentucky’s major political donors with more than $500,000 in contributions over the last decade — with funds divided among Republican causes and those of Gov. Andy Beshear, a Democrat, the Lantern reported earlier this month, citing campaign finance and other public records.

Sen. Phillip Wheeler, R-Pikeville, who has received $19,900 in contributions from Robinson, his wife Lelia and ARC employees since 2016, on July 9 sent a letter to Kentucky Medicaid Commissioner Lisa Lee urging the cuts for addiction services be suspended “until the legislature fully understands the reasons behind them.”

“Kentucky has made great progress in tackling the addiction crisis that has touched so many of our constituents, neighbors, colleagues, friends and family members,” Wheeler said.

Cutting reimbursement now “could negatively affect some of our most vulnerable citizens and prevent us from seeing these positive trends continue,” his letter said.

A similar letter addressed to “to whom it may concern” was signed by Rep. Patrick Flannery, R-Olive Hill, who has received about $17,000 in campaign contributions from Robinson and ARC employees.

Another letter was signed jointly by Senate President Robert Stivers, R-Manchester, House Speaker David Osborne, R- Prospect, Rep. Kimberly Moser, R-Taylor Mill and Meredith. Moser and Meredith are co-chairs of the joint Health Services Committee which heard from ARC and other treatment officials Tuesday.

Republican supermajorities control the Kentucky House and Senate.

Robinson has given $10,000 to the Kentucky House Republican Caucus, and $15,000 to the Kentucky Senate Republican Caucus in the last four years.

Robinson also has given other contributions to campaigns of Republican state legislators in the past decade including $4,100 to Moser and $2,000 to Osborne.

From 2021 through 2023, ARC companies and employees gave about $252,000 to a political committee supporting Beshear, whom Robinson, a Republican, has said he admires and would like to see run for president.

Bibb, Stepworks’ chief financial officer, gave $500 to Flannery in December 2023 and $2,500 to the Kentucky House Republican Caucus in October 2022, according to Kentucky Registry of Election Finance records.

Not asking for more money, just no cuts, says company official

Brown said that one concern of the MCOs is the cost of treatment, in particular long-term treatment for addiction.

ARC understands concerns about costs, but experience shows people with addiction benefit the most from long-term services, Brown told the committee.

“It is not just about surviving from their addiction but thriving in their communities,” he said. “Long-term treatment is vital.”

Without quality treatment, costs to the state will rise elsewhere, Bibb said.

“These costs will not go away,” Bibb said. “They simply will shift back to the emergency room, the judicial system, foster care, homelessness.”

ARC is willing to work with the MCOs and the state to ensure it is using money efficiently and effectively, Brown said after the hearing.

“Everybody’s got to be good stewards,” he said. “We’re committed to helping provide a solution.”

Brown and Wilson said representatives of treatment providers plan to meet with MCOs and state officials in coming weeks to try to resolve their differences.

“We’re not asking for more money,” Brown said. “We’re asking for no cuts.”

Wheeler, in an interview, said he appreciates the support of Robinson, a longtime friend since college together at the University of Kentucky, but that’s not why he sent the letter.

Rather he’s concerned about the impact of cuts of up to 20% on ARC’s services, which he said have helped many people in the region including a brother who benefited from its treatment program.

Also, he said, ARC is a major employer in the area where jobs have been scarce and also trains its clients for jobs.

Independent pharmacists start ads asking Congress for relief from pharmacy benefit managers, ask Supreme Court to hear a case

Photo by Getty Images via The Commonwealth Fund

Kentucky Health News

Independent community pharmacists have begun an advertising campaign to get Congress to rein in pharmacy benefit managers, the middlemen between drug and health-insurance companies. They are also challenging a court ruling that could negate the PBM reforms made by Kentucky and other states.

The ad campaign was launched Thursday, June 13, by the National Community Pharmacists Association. Its CEO, B. Douglas Hoey, said "Eighty percent of all prescriptions in the U.S. are controlled by just three pharmacy benefit managers, and they are all owned by or affiliated with the largest insurance companies in the country. These are Fortune 15 corporations that behave like monopolies, and they are hurting patients with higher prescription costs and killing off small businesses at the average rate of one every day. There is broad bipartisan support in Congress for reform, and we are determined to get it passed before the end of the year."

On Friday, June 14, NCPA joined other pharmacy groups in asking the U.S. Supreme Court to reverse a recent decision from the Tenth Circuit Court of Appeals against a 2019 Oklahoma law than bans PBMs from requiring patients to pick up their prescriptions from PBM-affiliated pharmacies. The groups say the ruling "imperils laws enacted in almost every other state following the 2020 Supreme Court ruling" that approved state regulation of PBMs, reports Gabrielle Wanneh of Inside Health Policy.

In 2023, the Kentucky General Assembly passed Senate Bill 188, aimed at keeping the state's independent pharmacies from closing. It sets dispensing fees, bans PBMs from forcing patients to get their drugs through mail order, and keeps them from steering patients to pharmacies that they own. The PBMs argued that the law will cause insurance premiums to increase and its mandates in the bill won't allow businesses to gain from savings that PBMs offer.

Independent pharmacies say they are losing money because of low fees paid by PBMs. The bill sets a minimum dispensing fee of $10.64 per prescription for the state's independent pharmacies until a study of dispensing costs is completed by the state Department of Insurance. This "gap-fill payment floor" will not be available to chain pharmacies. The results of the study will eventually dictate what the dispensing fee should be going forward. The study is to be repeated every two years, with fee adjustments made accordingly.

The law, sponsored by Sen. Max Wise, R-Campbellsville, also prohibits a PBM from reimbursing a pharmacy that it owns at a higher rate than a community pharmacy, or from keeping a community pharmacy from filling a 90-day prescription for a maintenance drug. And a PBM will not be able to penalize a community pharmacy from sharing information with a patient on the cheapest option to pay for their medications.

Medicaid change that saved money being used for expanded benefits has also been a lifeline for many independent pharmacies

Joel Thornbury gets a flu shot at his Pikeville pharmacy.

By Deborah Yetter
Kentucky Lantern

Pharmacist Joel Thornbury said his role is far more than filling prescriptions at the Nova Pharmacy he owns in Pikeville; he’s a readily accessible source of health services and advice in his community.

“When you call me, you get me,” said Thornbury, a third-generation pharmacist for more than 30 years. “I see you on the street. I’m not some big corporation.”

And Thornbury said his job has become far more manageable, following the state’s decision in 2020 to eliminate multiple corporate middlemen that previously managed the state’s Medicaid prescription drug business and took a cut of the proceeds.

“It’s phenomenal,” Thornbury said of the state’s decision to cut out the brokers known as pharmacy benefit managers. PBMs are private entities that work as subcontractors to health plans and decide how much to pay pharmacies and which drugs to cover.

“You just make my life easier and cut down on the number of people I have to talk within the insurance industry,” Thornbury said.

What’s more, it’s saving the state money — a lot of money — by putting Medicaid prescription management under single vendor, Medicaid officials recently told a state legislative committee. And that has enabled expansion of Medicaid benefits, though that has been in a political wrangle.

Savings since the change took effect in 2021 amount to about $283 million through 2022, $56.6 million of that in state money, officials told the committee. The rest is savings to the federal government, which pays most of the costs of the federal-state health plan that covers one in three Kentuckians.

Medicaid, with annual expenditures of about $15 billion, is Kentucky’s largest health plan and a major source of income for health providers including hospitals, doctors and pharmacies. It spends about $1.2 billion a year on prescription drugs.

The elimination of outside PBMs brought dire warnings of soaring costs from companies that previously managed Medicaid’s prescription drug business and claimed to keep down expenses. But a state analysis found the opposite, state Medicaid officials Veronica Judy-Cecil and Steve Bechtel told the legislative Health Services Committee on Sept. 27.

The state has plowed some of its savings back into this year’s expansion of Medicaid dental, vision and hearing benefits for adults, Cecil said. Advocates have said the expanded benefits, especially in dental care, are sorely needed in a state that ranks 49th in oral health.

But the expansion has been controversial with Republicans who control the legislature and say Gov. Andy Beshear, a Democrat, exceeded his authority by enacting them.

Max Wise (Photo by Ryan C. Hermens, Lexington Herald-Leader)

However, legislators recently passed up a chance to start repealing the expansion, and they are delighted with the savings that resulted from they legislation they enacted to abolish their role.

“Today’s a great day for the Commonwealth of Kentucky,” said Sen. Max Wise, R-Campbellsville, during the legislative committee meeting. Wise sponsored Senate Bill 50, the 2020 law that ended Medicaid work for the six PBMs.

“SB 50 truly saved jobs,” Wise said. “It kept a lot of pharmacies open.”

Committee co-chair Sen. Steve Meredith, R-Leitchfield, who has been highly critical of the PBMs’ role in Medicaid, recalled warnings from national insurance companies that previously held the contracts, including Caremark, an affiliate of the CVS drugstore giant. Many PBMs are affiliated with pharmacy chains.

Caremark, after the bill won final passage in 2020, issued a statement warning eliminating PBMs would cost Kentucky millions of dollars in increased prescription drug expenses.

“It’s going to cost our Medicaid program more?” Meredith said, recalling the warning. “Obviously, that’s not the case.”

Benjamin Mudd, executive director of the Kentucky Pharmacists Association, said the changes have been enormously popular with the state’s pharmacists.

“I think it’s been a phenomenal experience for everyone involved except maybe the PBMs,” Mudd said. “I would say Senate Bill 50 has undoubtedly kept some pharmacies from closing in our state.”

‘Squeeze and buy’

Independent community pharmacists became increasingly critical of PBMs in the years since 2011 when the state switched most of its Medicaid business to outside managed-care organizations, or MCOs — mostly subsidiaries of private insurance companies — to handle Medicaid claims.

In turn, the MCOs hired PBMs as subcontractors to manage pharmacy benefits.

That led to vocal complaints from pharmacists that aggressive cost-cutting by PBMs were threatening their business. Meanwhile, PBMs charged higher rates to state Medicaid programs and kept the difference as profit, a practice known as “spread pricing,” critics told Kentucky lawmakers.

Another problem: Because Kentucky currently contracts with six MCOs, pharmacists had to deal with six separate PBMs for reimbursement and six lists of drugs they would cover.

Thornbury's pharmacy in Pikeville (Photos provided)

That added to frustration, extra work and costs, said pharmacists including Pikeville’s Thornbury, who said the extra layers of seeking approval and payment for drugs was maddening.

“It’s a gigantic shell game,” he said.

Pharmacies foundering financially were often met with offers from pharmacy chains to buy their business. It especially hurt small, community pharmacies, the owners said.

“I just call it ‘squeeze and buy,’” Rosemary Smith, an independent pharmacist from Eastern Kentucky told legislators in 2018. “They are trying to put us out of business.”

About 500 of Kentucky’s 1,300-plus drugstores are independently owned.

Meanwhile, lawmakers found it deeply frustrating that state Medicaid officials had virtually no control over the PBMs because they reported to the MCOs that hired them rather than the state.

Complaints, mostly from their hometown pharmacists, resonated with lawmakers even as PBMs were facing scrutiny and new restrictions in other state Medicaid programs including West Virginia and Ohio.

After several years of investigations and review, the General Assembly enacted Wise’s SB 50, which eliminated the role of PBMs as subcontractors in the state Medicaid program.

Instead, it directed the state to hire a single PBM to report to the state Medicaid program, giving it more control over reimbursement to pharmacists and ability to more quickly work out any problems, questions or delays.

“It’s much easier for us to work through a single entity,” Thornbury said. “I call one location. If I have a problem, I call one person.”

The change also created one list of approved drugs, meaning pharmacists now can determine immediately which drugs are approved for all Medicaid members. And it eliminated the “spread pricing” critics said enriched PBMs at pharmacists’ expense.

‘Smooth transition’

Judy-Cecil, the Medicaid deputy commissioner, said Kentucky launched its new system in July 2021 and hired MedImpact, an independent PBM not affiliated with any pharmacy chain, to do the work.

Benjamin Mudd

“I believe it was a very smooth transition,” she said. The Medicaid department expects to release a report soon with more details on the impact of the changes and savings.

Another benefit to pharmacists: SB 50 set a base reimbursement model in which pharmacists get a $10.64 dispensing fee plus the costs of the medication.

Previously, pharmacists had no such guarantee and could end up barely breaking even or losing money on prescriptions they dispensed, Mudd said.

“Stores that were facing closure or were right on the fence. . . that little bump may have helped them stay open,” Mudd said.

That doesn’t mean the outlook is rosy for pharmacists, Mudd and others said.

They are still facing cost pressures from commercial insurance and Medicare. And a handful have closed or sold their businesses, Mudd said.

But changes of the last two years offered a much-needed lifeline, he said.

“Without a doubt, a much larger number of pharmacies would have closed if it weren’t for Senate Bill 50,” he said.

Meanwhile, lawmakers say they will continue to examine the role of PBMs in other health coverage, including the state employee health plan.

And Meredith, a former hospital CEO who has long complained the state’s six MCOs are too many — adding to complication, cost and confusion — threw out this idea:

“If we went from six PBMs to one and we save money, do you think there’s any potential to save money if we have fewer MCOs?” he asked. “Just a rhetorical question.”

WellCare of Kentucky, a manager of Medicaid, honors nine Kentucky health heroes with Community Health Champion awards

Front row, from left: Matt and Jennifer Westwood, Chelsea Ryann’s Festival of Hope; Christy Hinton, River Valley Behavioral Health; Faith Fountain, Ramey-Estep/Re-group; Sonja Grey, Exploited Children’s Help Organization; Stacy Kuhn, Farmstead, Inc. Back row, from left: Katina Hayden (overall winner), Catholic Charities of Owensboro; Dustin Bowman, Frankfort Police Department; Tiffany Riley, Kentucky Care; Corey Ewing, WellCare plan president; Dr. Key Douthitt, Breathitt County Long-Term Recovery.

Kentucky Health News

WellCare of Kentucky, one of the companies that manages Medicaid coverage for the state, honored nine people as "community health champions" for their efforts to improve the physical and mental well-being of Kentuckians.

 

Gov. Andy Beshear spoke at the Wednesday event, recognizing the health-care professionals who work to improve the quality of life in Kentucky’s communities through service, volunteerism and advocacy.

"All of this year’s nominees are integral partners in supporting the well-being of Kentuckians, and I am proud to be a part of this ceremony honoring their efforts," said Beshear. "Thank you to WellCare of Kentucky for continuing to recognize those who go above and beyond in helping their neighbors."

The statewide award was presented to Katina Hayden, director of case management of Catholic Charities of Owensboro.

Hayden's nomination by her peers said she played a crucial role in managing recovery efforts from the tornados that ripped across Western Kentucky in July, and helped the most marginalized Kentuckians recover from the natural disaster, a nws relese said. Hayden provided assistance to more than 4,000 survivors through her tireless work, helping to provide hope to 14 counties.

“Katina represents exactly the type of service, commitment, and passion that we want to support in Kentucky,” WellCare Plan President Corey Ewing said. “We know that people like her help make Kentucky communities healthier.”

The 2023 Regional Community Health Champions, by Medicaid region, are: 

Region 1: Tiffany Riley, Kentucky Care community health worker, for her "remarkable" impact on the lives of homeless individuals with physical and mental health problems. She was also recognized for her work as a lead facilitator at Western Kentucky Situation Table, connecting people at risk with essential resources. "Thanks to her valiant efforts, countless individuals who often slip through the cracks have been provided medical, dental, vision, and behavioral health services," says the release.

Region 2: Christy Hinton, River Valley Behavioral Health 988 mental-health first responder, for putting in up to 70 hours a week, and her volunteering for New Beginnings and her local church. "But her commitment does not stop there. Hinton goes above and beyond for everyone she meets, always having a smile on her face," says the release. 

Region 3: Sonja Grey, Exploited Children’s Help Organization, for her dedication to preventing and reducing child abuse through education, advocacy and support services in Louisville. It also says she actively partners with non-profit organizations, schools, and youth-serving organizations while serving in multiple leadership roles, with more than 15 years of experience in leading nonprofit organizations and for-profit businesses "Grey is extensively involved in the community, serving on multiple task forces and advisory councils for organizations like Kosair for Kids-FaceIt Movement campaign and Jefferson County Public Schools," says the release.

Region 4: Stacy Kuhn, Farmstead Inc., for her work as a volunteer providing pro bono equine-assisted psychotherapy to veterans. "Kuhn, a trauma survivor, holds multiple licenses in counseling. Her unique qualifications and personal journey make her the perfect advocate for our veterans," says the release.

Region 5: Dustin Bowman, Frankfort Police Department, for his work in addressing substance abuse treatment and prevention, and understanding that arresting people is not a long-term solution. "Bowman is involved in school activities, substance abuse prevention initiatives, and organizations addressing homelessness and affordable housing. Chief Bowman has secured grants for collaborative efforts between law enforcement and service organizations," says the release.

Region 6: Matt and Jennifer Westwood, Chelsea Ryan Festival of Hope, for their efforts to spread awareness about mental health, having "turned their pain into purpose," the release says. "After their daughter's tragic suicide, they dedicated themselves to helping the students at Lloyd Memorial High School. Through their fall festival, Chelsea Ryann Festival of Hope, they not only raised funds but also spread awareness about mental health. It is a joyful event where the community comes together, and mental health resources are readily available. Every year, they raise an average of $10,000, which helps the counselors bring in outside help for students in need." 

Region 7: Faith Fountain, Ramey-Estep/Re-group, for her work to better people's lives. She joined the organization as a youth support specialist in 2012 and has worked with more than 200 young people. "Faith is a passionate advocate for diversity and inclusion within the community. She serves on several community action boards, working to ensure equitable representation and opportunities for all. Faith initiated programs such as free ordainment ceremonies, fostering inclusivity and supporting individuals from various backgrounds," says the release.

Region 8: Dr. Key Douthitt, Breathitt County Long-Term Recovery Team, for his work as the medical director of the North Fork Valley Community Health Center, where he played a pivotal role in in helping rural communities during the flood of 2022. According to the release, "He organized door-to-door medical teams to hit the hardest affected areas across Breathitt, Knott, Perry and Letcher counties. He coordinated 13 teams and administered over 2,500 tetanus vaccines. Dr. Douthitt also established a hotline for flood-related medical needs. Furthermore, he also helped replace lost medications for those in shelters at Wolfe and Perry counties."

Get prepared now for Medicaid renewals, Kentucky

By Kennan Wethington
President, Anthem Blue Cross and Blue Shield in Kentucky

When Covid-19 hit three years ago, the federal government responded with a series of actions made possible by declaring a public health emergency. One of these actions was to freeze a process called Medicaid renewal, allowing Medicaid members to remain in their plans regardless of status or eligibility changes. That will all change in the coming weeks.

Screenshot of Anthem video explaining the renewal process

260,000 Kentuckians Could Lose Coverage: Recent federal legislation ended continuous enrollment in Medicaid, allowing renewals to begin on April 1. As a result, the extended health coverage for some on Medicaid will end, with disenrollments expected as soon as June 1. Here in the commonwealth, up to 260,000 people and as many as 18 million across the country could be affected.

The good news for those losing Medicaid coverage is that new subsidies may make Marketplace health plans more affordable than ever. In addition, many helpful resources are available to guide people to the coverage and support they need. With Medicaid renewal resuming, now is the time to begin preparing.

Start planning now: Here’s a checklist for all Medicaid beneficiaries to get ready for Medicaid renewal:

1) Make sure Kentucky’s Department for Medicaid Services has your current contact information by visiting kynect.ky.gov or call kynect at 855-4KYNECT (855-459-6328).

2) Watch closely for letters and information from Kentucky Medicaid and respond to them quickly.

3) Visit the Kentucky Health Benefit Exchange for help understanding Medicaid eligibility changes: khbe.ky.gov/Enrollment/Pages/PHEUnwinding.aspx 

4) Even if you still qualify for coverage, you may receive renewal instructions from Kentucky Medicaid. Make sure to follow instructions carefully.

5) If you don’t qualify, start making plans now to find affordable health plans through your employer or the Marketplace. Don’t let your coverage lapse.

A change of employment will be a common reason many Kentuckians will no longer qualify for Medicaid plans. The next step for people in this situation is to talk to their employer to determine if they are eligible for employer-sponsored health benefits. If employer-based health plans are not an option, an Affordable Care Act health plan through the Kentucky Health Benefit Exchange is likely the best choice for health coverage.

There are options if you lose Medicaid: If you no longer qualify for Medicaid coverage and employer-sponsored plans are not an option, understanding health coverage choices available through the Health Insurance Marketplace and how to enroll can take some time to sort out. That’s where we come in – those of us in the community dedicated to connecting people to quality, affordable health care. Two helpful sources are:

• The Kentucky Health Benefit Exchange, at khbe.ky.gov, is full of information, resources, agents, and health coverage guides called kynectors who can answer questions and help you understand your coverage options.
• HealthCare.gov is another warehouse of information, quick start guides as well as connections to healthcare navigators and brokers in each community.

All these information tools, agencies, and surprisingly affordable health plan options work together, making sure no one falls through the gaps.

Health care can still be affordable and equitable: The Affordable Care Act led to the creation of health plans that go beyond basic coverage, yet remain affordable even for those who don’t qualify for Medicaid and lack access to employer-sponsored coverage. Marketplace plans cover essential health benefits, including emergency services, prescription drugs and pediatric services, and they offer no cost preventive care. This means consumers pay nothing for important services such as regular wellness visits, immunizations and screenings. These services are key to avoiding and managing serious health conditions.

Marketplace plans are often more affordable than ever because federal subsidies have been expanded through 2025 to help keep costs down for consumers. Most people covered by these plans receive a federal subsidy, and in fact, some families that qualify for subsidies will pay nothing for coverage. If you did not previously qualify for subsidies, you may now be eligible.

Let’s stick together, Kentucky: More than ever, the last three years taught us that health is a group effort, and that equitable, affordable access to healthcare is vital to our physical, mental, and financial well-being. We learned that our health is interconnected not just to each other as Kentuckians, but also to our commonwealth’s entire economy. We’re at a pivotal moment, let’s not lose the momentum we’ve gained. If you’re impacted by Medicaid renewals, please start preparing now to keep you and your family protected with health coverage that works for you.

Robert Slaton dies at 81; was a catalyst for many health projects, including Passport Health Plan and Kentucky Health News

Robert Slaton, Ed.D.

Robert Slaton, a health-care consultant and former Kentucky public-health commissioner who was a catalyst for various health-improvement projects in the state, including Passport Health Plan and Kentucky Health News, died Dec. 27 after suffering a stroke a few days earlier. He was 81 and lived in Louisville.

Slaton, who had master's degrees in education and social work and a doctorate in education administration, was state health commissioner in 1978-79, then ran the Public Service Institute at Kentucky State University and was external-affairs administrator for Trover Clinic, now Baptist Health Deaconness Madisonville, his hometown, from 1983 to 1989. While at the University of Louisville, he was Gov. Brereton Jones' special assistant for health-care reform, executive director of the university's primary-care center, executive director of the Medical School Practice Association and executive vice president of University Health Care, retiring in 2007. As primary-care director, Slaton was part of a small group that planned, developed, and implemented Passport Health Plan, which started in 1997 and became a national model for managed care of Medicaid patients.

As a member of the national advisory board of the Institute for Rural Journalism and Community Issues at the University of Kentucky, he was the catalyst for funding of the institute's Kentucky Health News by the Foundation for a Healthy Kentucky. Sitting with Institute Director Al Cross and then-Foundation President Susan Zepeda at a Kentucky Chamber of Commerce luncheon in 2010, he said, "Al, you ought to ask Susan for some money." When Zepeda asked what the money would be for, Cross (who had no idea the proposition was coming) replied that the goal would be improving health coverage in Kentucky news media. The foundation continues to fund Kentucky Health News.

Slaton later chaired the advisory board, helping the Institiute develop a strategic plan. He was a member of the foundation's Community Advisory Council and chair of the chamber's Health Care Policy Council. In 2018, he won the Russell E. Teague Award from the Kentucky Public Health Association for his achievements and contributions to public health.

"Throughout his career in both public service and as a health-care consultant, he provided a politically savvy perspective and an astute management style that enabled institutions and organizations to make significant headway in policy change to improve the health of Kentuckians," his obituary says. "Robert always believed that health care was a right, not a commodity, and he worked very hard in a variety of settings to help move it in that direction."

As health commissioner, "He demonstrated an understanding of social and structural determinants of health that was ahead of its time," the obituary says. "Robert was a consensus builder and a natural organizer who was described as generous and down-to-earth. His talents included problem solving, strategic planning, and organizing a group of people to get a project done. He was proud that over his career he had helped young staff members develop beyond what they thought they could do. He could often see what needed to be done before most people, and he could handle personalities and egos to bring about change in organizations. Robert focused much of his career on building linkages and coalitions between different groups. This was eased by his genuine rapport with people. Robert’s strategic planning skills, insightful opinions, and wise counsel were valued by many leaders in the business, nonprofit, and political world."

He was co-author of two books about management, From Green Persimmons to Cranky Parrots, and Caught in the Middle Management. At the time of his death, he was working on a book about his mother’s life, based on the diaries she kept for decades. As he moved into assisted living, Robert was already making plans for his next book, stories of his colorful adventures as a parole officer in Western Kentucky in the 1960s. He was a delegate to the 1992 Democratic convention.

Slaton is survived by five adult children, Andrea, Lyle, Tom, Danny (Elizabeth), and Mike (Jake), and three grandchildren: Thia, Henry, and Lila. He is also survived by his companion, Mary B. Bradley, and her two children, whom he very much thought of as his own: Lizi Hagan and Clay McClure.

A memorial service will be held at 10 a.m. ET Saturday, Dec. 31 at Pearson’s, 149 Breckenridge Lane, Louisville. Visitation will be held from 4 to 7 p.m. ET Dec. 30 at Pearson’s. In lieu of flowers, donations may be made to Down Syndrome of Louisville, the Foundation for a Healthy Kentucky, or the Institute for Rural Journalism and Community Issues.

State Court of Appeals nixes Anthem's battle to keep Medicaid managed-care contract; 177,000 could need a new health insurer

https://www.courier-journal.com/story/news/local/2022/09/15/kentucky-medicaid-contracts-upheld-by-court-anthem-is-out-as-mco/69494863007/

Health-insurance companies' group makes 27 grants of up to $25,000 each to improve vaccination rates in Kentucky

The Clinton County News got a grant for four-color
ads spotlighting offices with 100% vaccination.

The Kentucky Association of Health Plans, which represents companies offering health insurance in Kentucky, has awarded 27 grants aimed at increasing acceptance of vaccines, especially those for Covid-19.

The grants of up to $25,000 will help various organizations "pursue efforts toward improving vaccination rates through outreach, communication, education, training, transportation, and/or support," KAHP said in a news release.

“For many months now, we have been partnering with various groups across the commonwealth and have had a lot of success in our vaccination efforts,” KAHP Executive Director Tom Stephens said. “We applied some of what we learned in that programming to launch a broader grant initiative that we think is quite impactful because we are really leveraging local organizations who know their communities best. It’s great to see so many different populations served. We certainly aren’t letting up because vaccines are the best defense against hospitalization and death.”

The Institute for Rural Journalism and Community Issues at the University of Kentucky, which publishes Kentucky Health News, obtained a $25,000 grant for the Kentucky Press Association to subsidize publication of special vaccination sections in newspapers that will be delivered to every household in some low-vaccination counties.

The Clinton County News received a grant that Editor-Publisher Alan Gibson said will be used for four-color advertising to recognize local employers that have 100 percent vaccination rates, modeled after the "house ad" that he ran about his own business.

Other grants have gone to the Lawrence County Health Department, the Lewis County Health Department, the Louisville Jefferson County Metro Government Department of Public Health and Wellness, Jefferson County Public Schools, St. Joseph Children's Home, Boulware Mission, Americana Community Center, Family Scholar House, Lexington Community Radio, Presbyterian Child Welfare Agency, Owensboro Health Twin Lakes Medical Center, Owensboro Health Muhlenberg Community Hospital, the Hopkinsville-Christian County NAACP, Appalachian Early Childhood Network, Mark 12 Ministries, the Kentucky Pharmacists Association, the Kentucky YMCA Youth Association, Maysville Community and Technical College, the Casey County Public Library, the University of Louisville, Presentation Academy, The People's Clinic, Operation Warm and the KCEOC Community Action Partnership, which serves 16 counties in Eastern and Central Kentucky.

"Some organizations like the Newcomer Academy at Jefferson County Public Schools have already initiated programming, conducting vaccine outreach and a clinic for English as a Second Language families," the release says.

"In September, KAHP completed a Disney trip sweepstakes for 20 grand prize winners who received their shots during the month of September. In August, in partnership with Volunteers of America Mid-states, KAHP launched 'Take 1 for the Team,' a hyper-local, targeted vaccine outreach and incentive campaign in Clay County, which combines heavy digital advertising featuring local influencers like pastors, coaches, doctors, and others, as well as offers for free food, free drawings for cash prizes, a free professional wrestling match, and a competition between local schools for $6,000 in sports equipment.

"The program has steadily raised vaccination rates, and building on this success, the two organizations launched a parallel effort in the West End of Louisville called 'Healthy West Lou.' KAHP provided an unlimited ride wristband and $20 gift card to all individuals who received the vaccine at the Kentucky State Fair.

"In June, KAHP visited Mercer, Montgomery, Estill, Nicholas, and Rockcastle counties for a 'Hottest Concerts' ticket giveaway at county health departments. KAHP visited the Lee, Owsley, Breathitt, Magoffin, and Leslie County health departments and gave away $100 Visa gift cards to those who received the shot. KAHP also held a “Shots Across the Bluegrass” live broadcast and pop-up vaccination clinic tour with Kentucky Sports Radio, with stops in Barren, Green, McCracken, Clay, and Laurel counties. . . . 

"Kentucky’s Medicaid managed-care organizations and commercial insurers are reaching their members through digital and radio ads, robust cash incentives, transportation coordination, pop-up clinics, clinics staffed by bilingual personnel, homebound vaccination visits, text and email campaigns, yard signs, billboards, outbound calls to members prioritized by risk tier, personalized assistance from advocates with sign-ups and digital site navigation, direct mail, and follow-up on second dose appointments based on claims data."

Insurance companies managing Medicaid start a sweepstakes for beneficiaries to win Disney World vacations for getting vaccinated

Washington Post chart, adapted by Ky. Health News, shows the latest available vaccination data.

Kentucky's health insurers have started a sweepstakes in which Medicaid beneficiaries can win vacation packages for getting vaccinated for Covid-19.

The Kentucky Association of Health Plans sweepstakes is open to enrolled Medicaid members 21 and older who receive their first dose of vaccine between Sept. 6 and Sept. 30 -- and enter by visiting visit KAHP.org.

Twenty winners will each receive a vacation package for four including airfare, a three-night hotel stay, and three-day park passes to "the most magical place ever in Orlando," a KAHP news release said. KAHP spokesman Tyler Glick said the vacation packages are for Disney World.

"In addition to the KAHP sweepstakes, Medicaid members may also be eligible to receive an incentive offered by their health plan," the release said.

Medicaid managed-care plans have offered cash incentives for vaccination for months, with little effect. In late July, only about 27 percent of Kentucky Medicaid members had received at least one dose of vaccine, compared to 51 percent of the total population. About a third of Kentuckians are on Medicaid.

The insurers have been promoting vaccination among the total population in various ways for months, and have recently targeted their efforts. Last month in Clay County, home of state Senate President Robert Stivers, they and Volunteers of America started “Take 1 for the Team,” an outreach and incentive campaign using digital advertising with local influencers such as pastors, coaches and doctors, plus offers for free food, drawings for cash prizes, and a competition between local schools for $6,000 in sports equipment.

“We’ve had several months of very successful promotions,” KAHP Executive Director Tom Stephens said in the release. “Just being around the state at our events, I can say that it is heartening to meet so many people who decide to receive the vaccine after they hear about our various incentive programs or were touched by our outreach efforts.”

The commercial insurers and Medicaid managed-care organizations who comprise KAHP are also reaching members through their own advertising, incentives, transportation coordination, pop-up clinics (some with bilingual personnel), homebound vaccination visits, text and email campaigns, yard signs, billboards, direct mail, telephone calls, personalized assistance and follow-up on second dose-appointments based on claims data, the release said.

Vaccination rate of Kentucky Medicaid members is about half the overall rate; even $100 incentives seem to have little effect

One of the biggest obstacles to protecting Kentucky from the coronavirus is Kentuckians on Medicaid, who make up about a third of the state's population.

"Of the 1.6 million people in Kentucky covered by the government health plan, only 27% of those eligible have received at least one dose of the vaccine, compared to about 51% of Kentuckians overall," based on state data, reports Deborah Yetter of the Louisville Courier Journal.

"That means more than 870,000 adults and children 12 or older covered by Medicaid remain unvaccinated," Yetter reports, using figures from the state Cabinet for Health and Family Services. "The current COVID-19 vaccines are not approved for children under 12. A little more than 320,000 Medicaid enrollees have received the vaccine, according to the cabinet."

Most Medicaid members' care is overseen by insurance-company subsidiaries known as managed-care organizations, or MCOs. The other 141,500, including nursing-home residents and people with certain disabilities in special programs, have a 55% vaccination rate. Nursing homes had top priority for vaccination.

Eric Friedlander, secretary of the state Cabinet for Health
and Family Services, and Gov. Andy Beshear (file photo)

Low vaccination rates among Medicaid enrollees pose obstacles in many states, but Cabinet Secretary Eric Friedlander has warned the MCOs that "I expect them to do better," he told Yetter. "The MCOs, in the most important public-health crisis of our time, are underperforming."

The six MCOs "say they are trying through outreach, incentives and other efforts to increase vaccinations," Yetter reports. "They say they are calling, texting and mailing information to try to reach members and offering incentives, including gift cards."

Joseph Goode, a spokesman for for CVS Health, told Yetter that its Aetna subsidiary was the first MCO in Kentucky to offer $100 gift cards for getting vaccinated, but only 22% of members 12 or older have received at least one dose of a vaccine.

Anthem is also offering a $100 incentive, and has a vaccination rate of about 25%, it told Yetter. Louisville-based Humana, has a 28% rate, she reports, and "The other companies, Wellcare, United Healthcare and Passport by Molina report similar efforts and said they are continuing to try push vaccination numbers higher." 

But "where skepticism remains high about the vaccine and misinformation abounds," people on the front lines of health care said the MCOs' impact will be limited. Yetter reports. She quotes Dr. John Jones, who treats Eastern Kentucky Medicaid patients, some of whom continue to refuse a coronavirus vaccine: "I don't know how much sway some insurance company's going to have over the phone. It usually takes someone you know to persuade you."

Also, in the counties of Perry, Leslie and Knott, where Jones works, "There's just a distrust of outsiders in general," he told Yetter.

"That distrust isn't limited to rural Kentucky, said E. Ann Hagan-Grigsby, CEO of Park DuValle Community Health Center, which is based in west Louisville and sees a large share of Medicaid patients," Yetter reports, quoting her: "We've hit a wall. The people who really wanted the vaccine have found where to get it and are getting it. The others who have not gotten it need some convincing."

"Friedlander said the state hired the MCOs to oversee health care and improve outcomes for Medicaid enrollees and he expects better results when it comes to the Covid-19 vaccine," Yetter reports.

"The MCOs ought to be really pushing hard to get these folks," Ben Chandler, president of the Foundation for a Healthy Kentucky, told Yetter. "You'd think it would be in their interest to get everybody vaccinated."

The chair of the legislature's Medicaid oversight committee told Yetter he was disappointed by the low vaccination rate of Medicaid enrollees. "I thought they would have been reasonably close to the state's average," said Sen. Steve Meredith, a Republican from Leitchfield.

Jones told Yetter that vaccine demand at his clinic had dwindled in recent weeks, "with unvaccinated patients expressing doubts or worries about the vaccine," she reports. "Often, they report anecdotal information shared by others or seen on social media, such as one patient who cited a case of a healthy young adult dying after being vaccinated, a report Jones said he could not verify."

"Some of it's directly linked to social media," Jones said. "The stories, there's no way to confirm them." He told Yetter that he has persuaded some patients to get vaccinated, but "Sometimes, they refuse to talk about it."

For second time, judge throws out Medicaid contracts that govern care for 1 in 3 Kentuckians, faulting state bidding process

For the second time, a Frankfort judge has thrown out the state's $8 billion in Medicaid managed-care contracts, saying many irregularities in the second round of bidding "cast a cloud over the process's legitimacy."

The administration of Gov. Andy Beshear had no indicated whether it will appeal Circuit Judge Phillip Shepherd's ruling or re-bid the contracts, for companies that manage the health care of the one-third of Kentuckians. Shepherd left the six contracts in effect so Medicaid coverage would not be disrupted.

"Shepherd cited errors by the state in the latest round in scoring the bids, its refusal to consider all aspects of bids, and a potential conflict of interest at one of the successful companies as reasons for ordering a new round of bids," reports Deborah Yetter of the Courier Journal. He also noted that state officials wouldn't let companies make oral presentations, as allowed by law, and told state employees who scored the bids to "dispose of their notes."

The judge said the selection process met the primary standard for invalidation, "arbitrary and capricious," noting that state law "provides that public procurements must be conducted in a manner that increases public confidence in procurement procedures, that insures fair and equitable treatment of bidders, and that maintains quality and integrity in the procurement process."

The process has been the most complex and contentious ever. Soon after taking office, Beshear threw out contracts awarded by predecessor Matt Bevin, "but another bid evaluation under his administration resulted in a virtually identical outcome of awards to the same five companies," Yetter notes.

The same companies won in both rounds of bidding: Aetna Better Health of Kentucky, Humana Health Plan, Wellcare Health Insurance of Kentucky, insurance giant United Healthcare and Molina Health Care of Long Beach, Calif.

United and Molina displaced two previous contract holders, Anthem and Passport Health Plan of Louisville. "Passport initially protested the loss of the contract along with Anthem but later announced plans to sell its assets to Molina and continue business under its name," Yetter notes. "One dispute in the current litigation was whether Molina could keep Passport's customers." Shepherd said it could.

Anthem, which Shepherd added to the contractors as a result of the latest lawsuit, argued that Molina should be disqualified because it hired a health-policy expert who had worked for Beshear's transition team. Shepherd said Emily Parento had violated the executive-branch ethics code by taking the job, but "the violations were not sufficient to disqualify Molina," Yetter reports.

Judge tells state to keep Anthem in Medicaid managed care, cites role of former Beshear aide working for another successful bidder

A Frankfort judge ordered the state Friday to keep Anthem Inc. as one of its managers of Medicaid, an $8 billion program that pays for health care for one of every three Kentuckians.

Franklin Circuit Judge Phillip Shepherd's order "comes just days before the state is set to begin enrolling people in Medicaid health plans for 2021 on Nov. 2, and as the state is facing record enrollment of 1.6 million Kentuckians in Medicaid, largely because of the covid-19 pandemic," notes Deborah Yetter of the Courier Journal.

Judge Phillip Shepherd

Shepherd ruled in a lawsuit Anthem filed in May after it lost out in bidding for new contracts. He said the huge insurer had raised "a substantial question" about the contract-award process and demonstrated "a substantial likelihood" that it would win the case.

Anthem alleged, among other things, that one of the new contractors, California-based Molina Health, had hired a former employee of Gov. Andy Beshear who was privy to key documents that other bidders couldn’t see. Shepherd said the role of Emily Parento "creates the appearance that Molina had the inside track on the bidding process."

"He also cited multiple irregularities of the scoring and evaluations process the state used to select the five companies that initially won the contract," Yetter reports. "Shepherd found the process to be 'arbitrary' and poorly documented."

Passport Health Plan, the main Medicaid manager for the Louisville region, also lost out in the bidding but sold its assets to Molina, which is using the Passport name and says it plans to complete a new headquarters in western Louisville, a major boost in jobs for a poor and Democratic-voting area.

Emily Parento

Parento, who was health-policy director for the governor’s father, then-Gov. Steve Beshear, signed a non-disclosure agreement to see “non-public files” about the bidding as part of the transition team at the start of Andy Beshear's administration. She “had unfettered access to inside information” about other bidders “as well as the evaluators’ notes regarding the strengths and weaknesses of each of those bids,” Anthem said in its suit.

Molina "denied there was any conflict with Parento working for it as a consultant," Yetter reports, and said "she did not get access to any confidential information that would have helped it win a contract."

The Finance and Administration Cabinet said Molina swore that Parento did not have access to confidential information about the proposals and didn't "divulge any confidential information she obtained prior to working as a consultant to the company," Yetter writes. "But Shepherd found otherwise and devoted a considerable portion of his order to examining Parento's role in the case."

Shepherd "said that under state ethics guidelines, she should have been barred for at least a year from working for any company involved in the Medicaid contracts after leaving the Beshear transition team," Yetter writes. The judge said that created at least "the appearance of impropriety."

Anthem also objected to Molina making confidential required information about lawsuits in which it had been involved and any official sanctions levied against it. It says in a footnote, “It appears that the decision to waive scoring of this item occurred at the final stages of the process and apparently after the individual evaluators had completed their preliminary scoresheets.”

The scores were close. WellCare got 1,662; Aetna 1,653, Humana 1,605, United HealthCare 1,520, Molina 1,507, Anthem 1,491 and Passport, 1,409, according to the bid protest.

Shepherd had already ordered the state to delay sending notices to Medicaid beneficiaries asking them to choose a managed-care provider until he could decide on Anthem's request for an injunction or a temporary restraining order.

His latest order says, "Public interest supports allowing Anthem to participate in this contract, bringing more competition and a wider variety of choices to Medicaid recipients," his order said. "Most significantly, Medicaid recipients currently enrolled in Anthem will not be required to change providers and disrupt their medical care."

Passport Health Plan, which lost its Medicaid contract in recent bidding, is selling key assets to one of the winners, Molina Health

By Lisa Gillespie

Kentucky Health News

Molina Health, in line to be one of Kentucky’s newest Medicaid managers, will be the successor to Kentucky’s oldest one, Passport Health Plan. Louisville-based Passport recently lost out on bidding to stay in the state’s Medicaid business, but its name, brand and networks of doctors won’t disappear after all.

Last year Passport lost out in Medicaid contract bidding under then-Gov. Matt Bevin, and again this year under Gov. Andy Beshear. It has a protest pending, but its announcement Friday indicates that its appeal is moot. Passport’s main business is in Medicaid, so without a state contract, it would have been in dire straits.

Molina is buying “certain assets” of Passport for $20 million, including its name and brand, operations and agreements from health providers to accept Passport payments, the companies said in press releases.

"We firmly believe that this agreement provides the best path forward for Passport members, providers, employees and our community," Passport CEO Scott Bowers said. “The trusted Passport name and brand will live on and, more importantly, this agreement provides continuity of care and coverage for our members during these challenging times for our community.”

Passport has 320,000 clients. It is partly owned by health-care consulting firm Evolent Health, which bought a major stake in January 2020 for $70 million. The purchase is subject to regulatory approval and was expected to close by the end of 2020.

The University of Louisville, which once owned 70 percent of Passport, had 19 percent after the sale to Evolent. Other local owners include University of Louisville Physicians, the Jewish Heritage Fund for Excellence and Norton Healthcare. They are also being bought out, U of L spokesman John Karman said. It’s not clear whether Molina is buying these players out of ownership, since the releases said Molina was buying assets and did not say it was buying the company.

Molina, based in Long Beach, Calif., mainly runs state-based health-insurance exchanges, Medicaid and Medicare plans for 3.4 million people in states from California to Michigan.

“Acquiring the operations as well as transferring over employees of Passport Health Plan provide us with a well-known brand in Kentucky and position us well to compete even more effectively in the market,” said Joe Zubretsky, president and chief executive officer of Molina.

Along with Passport’s loss of a Medicaid contract, Indianapolis-based Anthem Inc. also lost two bids to stay in Kentucky’s Medicaid program.

Anthem has alleged that Molina had an unfair advantage in winning a contract; Molina hired a former employee of Gov. Beshear who was privy to key documents that other bidders couldn’t see. Anthem says that’s just one reason the state should withdraw the contract awards and start over again. Anthem did not respond to an inquiry about the sale of Passport could mean for its appeal of the contract awards.

Passport was formed in 1997 under an innovative project to create managed-care companies that would administer Medicaid benefits, instead of the state doing it directly. Passport was, until the purchase by Evolent, run as a nonprofit. This meant the insurer wasn’t beholden to stockholders; many insurers are publicly-traded corporations.

Virginia-based Evolent in part was brought in to infuse money into Passport, which faced financial troubles that were compounded by when the Bevin administration cut payment rates in the Louisville region. By January, when the sale was announced, Evolent was already running a substantial part of Passport’s administrative business, and supplied staff.

Passport also started on a large project in western Louisville, a historically Black neighborhood with a lack of economic investment from large businesses. It purchased a 20-acre plot of land to relocate headquarters and to create a community health and wellness campus. Molina will purchase that site under a separate agreement, the companies said.

Beshear said when he announced the Medicaid contract awards that Molina had indicated it wanted to take over the project. Asked Friday to comment on the sale, he said it means continuity of coverage and “creates the possibility for a regional headquarters of a multi-billion-dollar company in west Louisville.”

Anthem and Passport appeal Beshear administration's decision kicking them out of state's Medicaid business as of Jan. 1

By Lisa Gillespie
Kentucky Health News

Passport Health Plan and Anthem Kentucky, twice denied by different governors the chance to keep managing Medicaid coverage for many Kentuckians, are appealing again.

Enrollees with coverage from either plan – close to half a million people – will have to switch insurers at the end of the year unless Passport and Anthem are successful in their appeals.

They had lost prior bids under Republican Gov. Matt Bevin, amid charges of political motivation that he denied. The insurers had hoped that under Democratic Gov. Andy Beshear, the outcome would be different.

But it wasn’t. Giant United Healthcare and California-based Molina are the new winners, while WellCare, Aetna and Humana had their contracts renewed. A month ago Beshear’s administration tapped the five companies to run Medicaid benefits to over a million enrollees, for payments of at least $8 billion a year, with about 80 percent of the money coming from the federal government.

Anthem and Passport allege that the state violated the law by failing to follow all the rules of the selection process. Those violations included not holding oral presentations at which the insurers could have answered questions and gained points from state scorers. The state, according to the appeals, also didn’t score parts of their applications where they might have racked up points.

The Cabinet for Health and Family Services used the same people to score the applications under Bevin and Beshear, according to an email obtained by Kentucky Health News. Passport’s appeal mentions this possibility, and says that this led to unfair scoring.

“Bias from Bevin-administration holdovers improperly favored bidders with a national, rather than local, presence, including comments giving competitors praise for the length of their entire corporate existence, without regard to their history in Medicaid … with no acknowledgement of Passport’s decades of Kentucky-based experience,” Passport’s appeal says.

Passport was a nonprofit formed in 1997 to help transition Kentucky into letting outside health insurers manage Medicaid care. The goal was to save taxpayers money. It no longer holds that nonprofit status; last year publicly traded firm Evolent Health bought Passport. But it is still headquartered in Louisville, and Evolent planned on relocating many employees to a new office building in western Louisville. Molina has pledged to take it over.

According to Louisville Business First, Anthem’s protest includes a focus on how close it was to beating out Molina. Here are the scores for all bidders:

• WellCare Health Insurance of Kentucky: 1,662
• Aetna Better Health of Kentucky: 1,653
• Humana Health Plan Inc: 1,605
• UnitedHealthcare Community Plan of Kentucky: 1,520.5
• Molina Healthcare of Kentucky: 1,507
• Anthem: 1,491
• Passport: 1,409.5

The appeals by Passport and Anthem were expected. Such appeals aren’t out of the ordinary when insurers lose contracts; it’s common for losing companies to appeal decisions, eventually ending up with lawsuits in court that can take years to settle.

A spokeswoman for the state Finance and Administration Cabinet didn’t reply to Kentucky Health News Thursday but earlier told Business First that the agency couldn’t comment on the process because it is “preliminary and ongoing.”

Rebidding of Medicaid managed-care contracts gets same result: Anthem and Passport to be out on Jan. 1; Passport plans protest

By Al Cross
Kentucky Health News

Hundreds of thousands of Kentuckians on Medicaid will have a new managed-care organizations to deal with when the new year rolls around, because two of the five MCOs serving the state were not among the five winners this week of state contracts for 2021.

Medicaid members of Anthem Health Plans and Passport Health Plan will have to choose from subsidiaries of the five insurers that won the bidding: Aetna, Humana, UnitedHealthcare, WellCare and Molina Healthcare, which apparently hopes to supplant Passport as Louisville's favored MCO. Passport was scored seventh among seven bidders, and Anthem placed sixth.

The two losers and the five winners were the same chosen by the administration of Republican Matt Bevin 11 days before he left the governor's office in December. Democratic Gov. Andy Beshear canceled the contracts and sought new bids, noting the timing, the vote against the contracts by a legislative advisory committee and Bevin's previous criticism of Passport.

Health Secretary Eric Friedlander said terms of the contracts were revised to increase oversight, quality control and transparency. But in the end, the result for the 1.4 million Kentuckians on Medicaid was the same.

"I wasn't a part of it whatsoever," Beshear said Friday. "It's done objectively, and it's done under the law." He noted that the bid scoresheets are posted online. The contracts total almost $8 billion.

Beshear said Anthem "does a really good job" with the state employee health plan, and said Passport "has provided great service and "been an important community member." It is the only not-for-profit MCO in Kentucky and is based in Louisville, where most of its members live. It was created in 1997 as a pilot project to control Medicaid costs in the Louisville area at the state's request.

Passport was building a new headquarters in western Louisville. Beshear indicated that Molina wants to take over the project; he said one company had said it was committed to creating 1,100 jobs in a headquarters in Louisville, and indicated later that the company was Molina, which is based in Long Beach, Calif., and has 3.4 million members.

Evolent Health, which recently bought most of Passport, said they would protest the contract decision, saying that "disrupting insurance coverage and continuity of care during an unprecedented public health crisis could have on some of the most vulnerable members of Passport's community."

The University of Louisville, which once owned 70 percent of Passport, had 19 percent after the sale. Other local owners include University of Louisville Physicians, the Jewish Heritage Fund for Excellence and Norton Healthcare.

Lawmakers passed several health-related bills in last two days of session, but killed others, including one to help with insulin costs

By Melissa Patrick
Kentucky Health News

The General Assembly passed several health-related bills in the final days of its session, but left many others hanging, including an insulin bill aimed at helping Kentuckians with diabetes pay for their life-saving medication.

Rep. Danny Bentley

House Bill 12, sponsored by Rep. Danny Bentley, R-Russell, would have required state-regulated insurance plans to cap a patient's cost for a 30-day supply of insulin at $100 "regardless of the amount or type of insulin needed to meet the covered person's insulin needs." It did not include Medicaid, Medicare or self-insured government plans.

The Senate committee substitute for HB 12 would also have established an insulin assistance program. This language came March 18 from Senate Bill 23, sponsored by Sen. Phillip Wheeler, R-Pikeville. After sitting in the Rules Committee for several legislative days, it was recommitted on the last day -- without explanation, as usual.

“I hate to use the word disappointing; it's worse than that, really,” Bentley said. “I apologized to all of my representatives because I had 73 co-sponsors on that bill. And that is disheartening to me, not because of me or anything for me, but because of the 550,000 diabetics in Kentucky. And right now with people not able to work, it just made it that more important.”

Sen. Phillip Wheeler

He said he thought Wheeler's addition “killed it,” largely because of the added cost that came with his assistance program, and trying to figure out who would pay for it. (He added it at a time when the covid-19 pandemic was becoming a threat to state revenues.) "It just got too complicated,” he said. “HB 12 should have come on through clean.”

Bentley said if the Senate had passed the bill with Wheeler's addition, he was planning on asking the House to reject the changes and sending the bill to a conference committee that he thought would have removed Wheeler's program.

Wheeler acknowledged that the funding for his program was an issue, but said the main reason the bill didn't pass was the shortened legislative session.

"I think it just got caught up in the whirlwind of covid-19," he said. "It just didn't make the cut." He said he was also disappointed. "I think it was a great bill that would have helped a lot of people, but like I said -- I guess we'll just have to try again next year." Bentley said his bill will be a priority when the legislature returns in January.

Wheeler said the addition of his amendment was important because Bentley's bill covered fewer than 10 percent of health plans in Kentucky and his amendment would have also helped the uninsured and those who are covered by most private-sector health plans, called ERISA plans.

“To the extent that it caused any problems for his bill, I do regret that. But honestly, I don't know that Bentley's bill really had any better chance of passing than mine did.”

Wheeler was serving his first full legislative session after winning a special election in March 2019. He is running for a full four-year term and will have a Democratic opponent after the June 23 primary. His district is Pike, Martin, Lawrence and Morgan counties.

Bentley, a pharmacist who was first elected in 2016, is unopposed for another two-year term from Greenup County and part of Boyd County.

Another major health bill that did not pass was aimed at improving the workforce that cares for patients with Alzheimer's disease and dementia.

SB 136, sponsored by Sen. Robby Mills, R-Henderson, would have required home-health aides who provide care for patients with Alzheimer's or other dementias to receive four hours of state-approved dementia-care training within the first 60 days of employment, and two hours per year after that. A committee heard that of the 75 hours it takes to become a certified nurse's aide, only two focus on cognitive impairment.

The bill was amended with a business-oriented coronavirus relief measure in the last hours of the session, and the revised version passed out the House 86-3. The Senate did not agree to the changes; a Senate spokesman told the Lexington Herald-Leader that there were issues with the bill that the legislature did not have time to correct.

The health-related measures in the amendment would have allowed chiropractors to go back to work, and allowed certified community-health workers to bill Medicaid for their services during the state of emergency. It also included language that asked occupational licensing boards and trade associations to give Beshear a plan showing how they could safely reopen while still following health guidelines.

Another transformed measure that didn't pass was Senate Bill 20, which was completely gutted in the House and amended to allow massage-therapy and optician boards to set their licensing fees in administrative regulations, rather than law, and designate a single credential-verification agency for all the state's Medicaid managed-care organizations. Health-care providers have long complained about the burden of being separately credentialed by MCOs; the state has five.

Rep. Kim Moser, R-Taylor Mill, said the bill would have set a firm deadline, July 1, for the Cabinet for Health and Family Services to create a credentialing agency, and if not, responsibility would shift to the attorney general. The General Assembly passed legislation in 2018 to create such a system, but it hasn't been implemented, she said.

Another bill related to MCOs that did not pass was SB 30, sponsored by Sen. Stephen Meredith, R-Leitchfield. It would have limited the number of MCOs to three. Meredith and others say there is no need for providers to have to deal with the administrative burdens of dealing with so many MCOs; opponents say that makes bidding more competitive.

Health bills that passed

Health bills that did pass include measures to promote organ donation, help struggling rural hospitals and Sudden Infant Death Syndrome research, boost reimbursements for ambulance services, and make it harder to get an abortion, among other things. All of these bills await action by Beshear, whose decision will be final because April 15 was the last day the legislature could meet.

Here are most of the health-related bills that passed in the final two days of the legislative session:

HB 387, sponsored by Bentley, would create a revolving loan fund for financially distressed rural hospitals. It is not funded but would allow the Cabinet for Economic Development to provide loans to struggling hospitals to maintain or upgrade their facilities; to maintain or increase staff; or to provide new health-care services. It passed with an amendment to give Beshear the authority he needs to buy protective gear for health-care workers fighting the covid-19 pandemic.

HB 46, sponsored by Rep. Jerry Miller, R-Louisville, would allow full-time state employees a paid leave of absence of 240 hours for donating a human organ and 40 hours for donating bone marrow.

SB 237, sponsored by Sen. Max Wise, R-Campbellsville, would allow collection of tissue samples from post-mortem exams of children who have died from Sudden Infant Death Syndrome to be used for research purposes, with a parent's permission.

SB 9, sponsored by Sen. Whitney Westerfield, R-Hopkinsville, would require health-care providers to give "medically appropriate and reasonable life-saving and life-sustaining medical care and treatment" to any infant born alive, including after a failed abortion, and would make not doing so a felony. The bill passed with language from HB 451, to expand the power of the attorney general to shut down abortion providers and keep abortion from being deemed an urgent procedure under Beshear's emergency order. Westerfield said he expects Beshear to veto the bill.

HB 8, sponsored by Rep. Rob Rothenburger, R-Shelbyville, would boost reimbursement from Medicaid for ambulance services by setting up a trust fund to let them draw a federal match.

HB 29, sponsored by Rep. Steve Riley, R-Glasgow, would make temporary licenses for long-term-care administrators run nine months, not six.

House Resolution 135, sponsored by Rep. Kim Moser, R-Taylor Mill, would encourage the Legislative Research Commission to establish the Kentucky Emergency Preparedness Task Force, with findings to be submitted by Dec. 1. Moser said it should look at the state's past and current response to disasters, including covid-19, and plan for future response.

Click here for a list of some other health-related bills that have already been signed by the governor.