Special report on Medicaid managed care indicates problems

medicaidMedicaid managed care is in the news again – or did it ever really leave? State Auditor Adam Edelen released a report at the end of July on the three Medicaid managed care companies which began operating  across the state (except for the areas in and around Louisville) in November 2011: Coventry Cares, Kentucky Spirit Health Plan, and WellCare. Tuesday, the Courier-Journal ran an editorial entitled simply: “Fix managed care”.

The audit and the editorial outline what many health professionals, patients, legislators, families and advocates already suspect – many managed care companies are not meeting the needs of Kentuckians. This problem is only going to get worse when Medicaid expansion goes into effect in January and an estimated 300,000 Kentuckians will be eligible for health coverage. Medicaid expansion is positive for Kentucky as more adults and parents will have access to affordable health coverage. However, the large number of individuals that will qualify for health coverage in 2014 will put additional strain on the supply of providers which experts say is already too small.

The audit discusses the provider supply and other concerns:

  • Rural hospitals have reported increased administrative burdens, inadequate reimbursements, and reporting difficulties. This could put their viability into question and make it even more difficult for rural Kentuckians to access care.
  • Local Health Departments have experienced financial hardship due to outstanding and denied claims from managed care organizations, making it difficult for them to continue to provide care to patients.
  • As noted earlier, there is concern about adequacy of the collection of hospitals, physicians, dentists, and other healthcare providers known as the Medicaid provider network. While the audit indicates adequate provider access for now, the inadequate reimbursements and increased administrative burdens are causing some providers to stop accepting Medicaid altogether.
  • For more information –check out the full audit.

In addition to outlining the above concerns, the audit also makes some clear recommendations for the Cabinet for Health and Family Services. Some of those recommendations include:

  • Establish a formal advisory panel to bring all stakeholders together to discuss and solve ongoing managed care issues.
  • Require the managed care companies to provide all data on claims they have received from providers for services provided to the Cabinet and auditors for a period of time to improve oversight of the companies.
  • Improve the monitoring and oversight of the managed care companies to ensure payments are being made in a timely manner and patient’s claims are not being denied inappropriately.

When it was first announced Kentucky was adopting the managed care model for Medicaid in a very short time-frame, there was suspicion of a “pending disaster.” Some states have thrived under the model, and other states have not. Kentucky has a long way to go before calling Medicaid managed care a success story. We hope the Cabinet will consider these recommendations, especially before Medicaid expansion goes into effect.

 

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