Health secretary tells legislators Medicaid budget has been balanced by moving all beneficiaries to managed care

The switch to managed care organizations has fixed Kentucky's Medicaid shortfall, with Janie Miller, secretary of health and family services, calling the budget "balanced." She said the projected savings from moving to managed care will take care of the $97 million funding gap caused by a lack of anticipated federal funding.

The Courier-Journal's Deborah Yetter notes that the shortfall was the most contentious issue for the legislature this year, with Gov. Steve Beshear wanting to plug the hole by moving to managed care and Senate Republicans wanting to make across-the-board budget cuts. After a special session, Beshear got his way and 560,000 Medicaid members are slated to move into managed-care organizations starting Oct. 1. Those in the Louisville region have been in one, Passport, for several years. Passport has a one-year contract with the state; Coventry Health Care Inc., Centene Corp. and WellCare Health Plans Inc. have three-year contracts. "They have every incentive to be successful," Miller said. "They are making a huge investment in this state."

Asked by skeptical legislators how the savings can be assured, Miller said they are guaranteed by the contracts. "To achieve savings, Medicaid will pay each company a fixed rate of about $345 per month per person. In turn, the company will be responsible for all costs of the person's health care," Yetter reports. "It's got a lot of potential," said state Rep. Jimmie Lee, D-Elizabethtown. "I have faith that if it's managed right, it could work." (Read more)