Kentucky looks at Medicaid concerns

Local News

June 10, 2011

By Ronnie Ellis CNHI News Service The Richmond Register Fri Jun 10, 2011, 02:00 PM EDT

FRANKFORT — The state plans to sign contracts with vendors to provide managed care for Kentucky’s 820,000 Medicaid recipients within just three weeks, but some lawmakers Thursday questioned if state government can properly oversee the change.

Like most states, Kentucky confronts a growing Medicaid population and rising costs during a period of economic downturn and constrained state revenues and budget. The General Assembly — divided by a Democratic-controlled House and Republican-controlled Senate — deadlocked last spring over how to manage a shortfall in the Medicaid budget. Democratic Gov. Steve Beshear proposed, and ultimately won approval, of a plan to move from traditional fee-for-service reimbursement to a managed care approach.

But Republicans, led by Senate President David Williams who is running against Beshear for governor this fall, contend the administration and Cabinet for Health and Family Services isn’t up to implementing the plan in time to save enough money to cover the shortfall.

Thursday cabinet officials went before the Interim Joint Committee on Program Review and Investigations to respond to a legislative review of Medicaid which questioned the cabinet’s oversight of Medicaid. Committee Chairman Sen. Jimmy Higdon, R-Lebanon, said the report raises concerns the state is not prepared to implement and manage “the massive changes” involved in the move to managed care.

Higdon said there are also “unanswered questions about what the cabinet’s role will be after the changes.”

Sen. Katie Stine, R-Southgate, asked Medicaid Commissioner Neville Wise if the cabinet has the expertise to negotiate with prospective vendors which have submitted proposals to manage the state-federal health care system for the poor and disabled and will part of the savings come from fewer state employees after the delivery of services is turned over to private vendors.

Wise said he, Cabinet Secretary Janie Miller and an outside financial firm will negotiate the contracts but the state will need to retain its current employees to oversee vendor performance and continue to determine client eligibility. He said they have the necessary expertise to negotiate contracts and to monitor the vendors’ performance.

Wise’s budget official, Beth Jurek, said Kentucky has wrung most of its administrative cost savings out of the program already, consistently placing among the lowest three states for Medicaid administrative costs.

Most of the close questioning came from Republican senators while Democratic House members Rick Rand, D-Bedford, and Ruth Ann Palumbo, D-Lexington, defended the plan to save money through managed care.

Stine also questioned Wise closely about the state’s ability to implement the program by July 1, but Wise said the “target” had always been simply to have contracts signed by July 1. He wouldn’t say when the change to managed care might be fully implemented.

He revealed, however, that in order for a vendor to have its proposal considered it had to make proposals for three types of geographic service areas: statewide; statewide except for counties around Louisville currently served by Passport’s managed care system; and individual proposals for all eight service regions in the state.

That indicates there may be multiple vendors managing the service. Passport already delivers managed care to 16 counties surrounding Louisville and the state could negotiate a renewal of that contract. It could also award contracts to multiple vendors to manage care in different regions of the state — or it could award a contract for service to one vendor for the entire state.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/ cnhifrankfort

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