By Beth Musgrave
FRANKFORT — Too many hospitals and doctors are still not being paid promptly by the companies who began managing Medicaid care in Kentucky a year ago, Republican lawmakers said Tuesday.
“The reality is providers aren’t getting paid,” said Sen. Joe Bowen, R-Owensboro.
The amount of money owed to hospitals has doubled since the state moved more than 500,000 people to managed care in November 2011, Bowen said. The changeover was designed to curb costs in the more than $6 billion federal-state health care program for the poor and disabled.
Many GOP legislators echoed Bowen’s concerns Tuesday during a meeting of the Interim Joint Committee on Health and Welfare.
Kentucky Medicaid Commissioner Lawrence Kissner told the committee that two of the managed care companies — WellCare and Kentucky Spirit — have been cited by the state Department of Insurance for failing to pay claims promptly.
WellCare was cited in the fourth quarter of 2011 and the first quarter of 2012, according to documents provided by the Department of Insurance. Kentucky Spirit was cited fin the first quarter of 2012. A third managed care company, Coventry, has not been cited by the department.
The companies have submitted plans of correction to the Department of Insurance.
If the companies develop a pattern of non-compliance or fail to improve, the department would take “proper administrative action, up to and including fines,” said Ronda Sloan, a spokeswoman for the insurance department.
In documents to the Department of Insurance, Kentucky Spirit said a rocky start up contributed to it being out of compliance with the state’s prompt payment statutes, which say a claim must be paid, denied or challenged within 30 days.
The company’s most recent quarterly report showed that it had paid 97.1 percent of all non-contested or “clean” claims within 30 days, according to a letter from Jean Rush, the president of Kentucky Spirit. That’s above the state standard of 95 percent.
WellCare said growing pains and errors in reporting contributed to its late processing of claims.
WellCare said it has improved and has given more than $600,000 in bridge payments to providers for late or delayed claims, according to a letter from Michael Minor, state president of WellCare.
None of the managed care companies testified at Tuesdays’ committee meeting, but some legislators hammered Kissner on the managed care companies’ performance, saying the Department of Medicaid should do more to ensure providers are paid on time.
Sen. Julie Denton, co-chairwoman of the committee, said the Medicaid department has had plenty of time to figure out how to get the managed care companies to comply but has not done enough to help providers who are struggling financially.
“The process is taking too long,” said Denton, R-Louisville.
Kissner said the Medicaid department has enforced the state’s contracts with the companies and state procurement laws.
“We are following what is set out in statute,” he said.
Despite the payment problems, the move to managed care has helped stem rising costs in the Medicaid program, Kissner said.
As of October, Medicaid was approximately $40 million under budget, he said.
However, Kissner said he was not clear on how the possible termination of Kentucky Spirit’s contract with the state would effect the overall Medicaid budget.
Kentucky Spirit and the state are fighting a court battle after the company said earlier this year that it would terminate its contract a year early. Kentucky Spirit has alleged that the state provided incorrect cost information at the time the contract was bid. The state counters that Kentucky Spirit intentionally underbid the contract so it could get a toe hold in the Kentucky Medicaid market.