Legislators hear about serious problems in managed-care system

The switch to the new Medicaid managed-care system is proving to be a nightmare, health officials told lawmakers Wednesday, with long delays in payment to providers and treatment for patients.

"It appears to me the only place the savings can come from is the delay and denying of care," said Dr. Shawn Jones, president of the Kentucky Medical Association and physician in Paducah. "Patient care is being delayed and, in some cases, simply prevented." (Video from cn|2)

Jones was one of several officials who testified at a meeting of the Senate Health and Welfare Committee. The new system requires pre-authorization for procedures that were once routinely covered, so patients spend hours in waiting rooms or are told to go home and return after their procedures have been given the go-ahead. In one instance, a woman in labor came to the hospital to deliver "and the managed-care company insisted that her care be pre-authorized," reports Deborah Yetter of The Courier-Journal.

"Fourteen days later, mom and baby are home and we still have no pre-authorization," said Joe Grossman, chief financial officer of Appalachian Regional HealthCare.

Problems started Nov. 1 when the state turned its Medicaid program outside the Louisville region to three managed care companies. (Louisville-area recipients have long been managed by Passport Health Plan.) The move is intended to save the state money and fill a hole in the Medicaid budget. But officials said the three companies — CoventryCares of Kentucky, Kentucky Spirit Health Plan and WellCare of Kentucky — seem to be purposefully delaying claims payments, though the state has already paid them $135 million since Nov. 1.

"I feel like I've become a bank to these out-of-state insurance companies," said Grossman, whose eight-hospital chain is owed $8 million. "I've lent them money."

The managed care companies did not testify Wednesday, but issued statements saying they intend to address the issues at hand. Neville Wise, the state's acting Medicaid commissioner, " said he believes the issues are just temporary bumps that can be ironed out," Ryan Alessi of cn|2's "Pure Politics" reports. The requirement that childbirth be pre-authorized, for example, has since been rectified, Yetter notes. State Sen. Julie Denton, R-Louisville, asked Wise, "How many more ludicrous scenarios can there be?" (Read more)