RICHMOND — Problems with the private management of the state’s Medicaid program have had a negative impact on the county’s public school health program, according to a report presented Wednesday night to the Madison County Board of Health.

Five months into this year’s budget, the program is running $382,651 in the red. Chief Finance Officer David Reed projected that if the Medicaid reimbursement problems continue, more than $400,000 in local tax revenue would be needed to have the program break even by the end of the fiscal year.

“What’s the problem there? A lot of it’s the MCOs (managed care organizations) not paying the clinic and the school program,” Reed said.

In November 2011, the state switched from handling Medicaid reimbursements to contracting the job out to three private companies – Coventry, Kentucky Spirit and WellCare. Since then, the health department and many other providers throughout the state have struggled to receive reimbursements for services provided to Medicaid patients.

So far, $246,811 in MCO payments for school and clinical health services are more than 90 days overdue to the Madison County Health Department. The bulk of this – $209,899 – is from Kentucky Spirit, Reed said.

Kentucky Spirit announced in October that it was leaving the state this summer. The MCO claimed Kentucky’s Medicaid model was unsustainable, and the state had misled the company on the true costs of the program when Kentucky Spirit was bidding for the three-year contract. Both the governor and the company have threatened litigation.

The Madison County Board of Health provides health services to the schools as a contractor, according to Health Director Nancy Crewe. This school year, Madison County Public Schools paid a contract fee of  $453,000 and Berea Independent paid $23,000. Baptist Health in Richmond donated $50,000 to the school health services program.

The projected Medicaid revenue for the school health program was $585,855 for the current fiscal year. However, with the actual rate of reimbursements so far, Reed projected that by the end of the fiscal year, the program would have a shortfall of $421,500 that would have to be made up with local tax revenue.

“The school health program, it’s unsustainable if we have to put $400,000 into it every year,” Reed said.

Crewe said this problem with the MCOs has had a “huge impact” on the board’s budget, and “one we did not foresee.” She said that Madison County Public Schools Superintendent Tommy Floyd is aware of the problem, and changes may come next year when the new contract is negotiated.

Board of health member Dr. John Johnstone pointed out that the school health program is not a service the health department is required to provide. However, the school board is mandated to provide health services to its students.

In other business:

– Community Health Nursing Supervisor Jean Powell reported that the same-day appointment scheduling, implemented at the Richmond and Berea health department clinics in October, has shown a significant increase in the number of people who show up to appointments. In the past, this rate has been around 60 to 70 percent, but Powell provided data showing that for many clinic programs the percentage is now in the 90s since the start of same-day appointment scheduling.

– MEPCO Nurse Administrator Billie Dyer reported on changes made within MEPCO, the health board’s home health agency, to restructure after the lay offs of seven employees and also to continue to reduce costs. Some of those changes included centralizing clerical staff and phones into one office, creating a stricter formulary for wound care supplies and changing the way the supplies are delivered.

– Reed provided an update on work being done on Berea’s Martha Pride Community Health Center. Several improvements have been made, including making the building more accessible for disabled people, renovating restrooms, plumbing remediation, sealing gaps from concrete settlement, repairing and painting walls and HVAC maintenance. Shrubs and mulch beds have been removed from around the outside of the building to prevent water retention at the foundation.

The architect for the project had estimated the work would cost $150,000, however with suggestions and modifications from the contractor and other health department employees, Reed said the project will cost just $40,000 when it is completed, a number that was greeted with applause from the health board.

Reed credited Leroy Lamb with providing many of the suggestions and modifications to the project that helped reduce costs. Earlier in the meeting, the board approved Lamb’s nomination for Employee of the Year.

– Five members of the health board were re-appointed. They were engineer Michael Oliver, optometrist Anthony Harris, registered nurse Dale Barlow, veterinarian Jack Taylor and consumer representative Philip Runyon.

– The board of health approved a meeting schedule for 2013. The meetings, which start at 7 p.m., will be Feb. 6, April 3, June 5, Aug. 7, Oct. 2 and Dec. 4. The April 3 and Oct. 2 meetings will be at the Martha Pride Community Health Center, and the remaining meetings will be at the Richmond health department location. The calendar and meeting agendas are available online at www.madisoncountyhealthdept.org.

– Several employees were recognized for their service. Employees for the third quarter were the MEPCO management team: Dora Shepherd, Lisa Wallis, Rhonda Hale, Tina Litteral, Emma Mullins and Missy Williams. Employee for the fourth quarter was Leroy Lamb. The Good Citizen recognition went to Beth VanWinkle and Charlene Wells. The Shining Stars were Mae Margaret Maupin-Story, Kim DeCoste, Lori Knutson, Paula Hollon and Christie Green. The team award went to the Access Team, which includes Carmen Barker, Shana Barnett, Jenni Griffith, Sandy Gray, Missy Lake, Terri McCarty, Rebecca Newton, Paula Portwood, Becky Shehan, Beth VanWinkle and Charlene Wells.

– The only new employee was Janet Heinz, a health educator for the HANDS program. Suzi Freeman and Johnna Caudill have resigned, and seven MEPCO employees were laid off as part of the health department’s workforce reduction plan to balance its budget.

Sarah Hogsed can be reached at shogsed@richmondregister.com or 624-6694.