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Kentucky Medicaid bill would reduce managed care organization contracts to three

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Lawmakers frustrated with the court decision to squeeze in a sixth MCO are pushing back.


The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


Gov. Andy Beshear spoke out against a bill that would reduce the number of companies with Kentucky Medicaid contracts from six to three.

The bill, Senate Bill 56, includes language that would allow it to go into effect immediately if passed by the General Assembly and signed into law by the governor. That could have a significant bearing on a months-long, expanding legal fight over how the state awarded five contracts last May.

“We have had in our history, of having [Managed Care Organization], one quit,” Beshear said at a press conference on Tuesday, referring to Kentucky Spirit Health Plan abandoning its Medicaid contract in July 2013 with about a year left in the contract. “And if we only had three [Medicaid companies] and one quit, a huge number of people would be without service and would be in a very difficult spot that could be the difference between life and death.”

He acknowledged the potential frustration of lawmakers critical of the Medicaid program seeing a sixth Medicaid company added to the program through an order from the judge presiding over the Medicaid lawsuits.

The bill’s sponsor Sen. Stephen Meredith, a Republican from Leitchfield, Kentucky, said of Beshear’s response: “That’s a typical response from state government because we never approach things from a business model.

“If you truly apply the principles of the business world, there is no way that you would justify six [Medicaid] companies.”


Sen. Stephen Meredith, R-Leitchfield, is sponsoring a bill that would cut down the number of Medicaid companies in the state to three. There are six companies operating in Kentucky now.

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Meredith, a retired hospital executive, said the bill would remove administrative redundancies and inefficiencies from the Medicaid program and for the health care providers that interact with Medicaid companies — especially small and rural health care providers.

Meredith has run a version of Senate Bill 56 every year since 2018. His first session was in 2017. He called his previous failed attempts to get the bill passed an “educational process” to help legislators understand the bill.

His case for passing the bill includes references to the importance and the plight of rural health care providers. He believes that reducing the number of Medicaid companies would bring them some financial relief, say that about 28 rural Kentucky hospitals are vulnerable to closure. Often, rural hospitals are major employers in rural communities and provide access to care that would not otherwise be easily accessible.

The legal foofaraw around the Medicaid contracts, in part, inspired Meredith to run the bill again in 2021, even after he told me he wouldn’t do so. In an October interview, he said there was a lack of interest from legislative leadership who he said “turned a deaf ear” on the matter.

He also said that the Medicaid lawsuits and the perceived expansion of bureaucracy with the sixth Medicaid company have Increased political buy-in for the bill, even while the General Assembly tackles other major pieces of legislation prompted by the coronavirus outbreak and the Beshear administration’s reaction to it.

The bill has been assigned to start its legislative journey in the Senate health and welfare committee, where Meredith is vice-chairman. He said the bill is slated to be heard in February.

“I think the Covid situation has actually kind of helped this bill and that [other legislators] recognize the challenges to hospitals, particularly rural hospitals, in trying to stay profitable, and literally survive, and that we can provide some kind of relief,” Meredith said.



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Kentucky Medicaid court case heads to mediation with several hurdles – Louisville Business First

Curator, KY, Managed Care, Roundtable Show


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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.



Curator summary

KY MCO lawsuits continue, but with a focus on mediation by early December.

Court documents show that there are hurdles just to get mediation in the case over how the state awarded its Medicaid contracts started.


Mediation among the eight organizations at the heart of the controversy surrounding the state’s Medicaid program has started off with conflicting visions for the process.

Court documents filed on Friday show differing views on matters such as timing, how to handle a pending motion in Franklin Circuit Court and disputes over a proposed precondition to the outcome of mediation.

On Nov. 12, Franklin Circuit Court Judge Phillip Shepherd ordered that the two government agencies and six Medicaid companies in the suit try to resolve the matter through mediation and to set a date to do so before Dec. 12.

Under dispute

The two government agencies — the Kentucky Cabinet for Health and Family Services and the Finance and Administration Cabinet — filed a joint status report with Medicaid companies: Aetna Better Health of Kentucky Insurance Co., Anthem Kentucky Managed Care Plan Inc. and Molina Healthcare of Kentucky Inc. in which they proposed a mediator: John Van Winkle of Indianapolis-based Van Winkle Baten Dispute Resolution.

They also hope to set a mediation date of no sooner than the week of Nov. 30 and no later than the court-mandated Dec. 12, the report reads. But UnitedHealthcare of Kentucky Ltd. and Humana Health Plan Inc. want to see mediation no later than or on Nov. 26, Thanksgiving, according to a joint status report that also included WellCare Health Insurance Company of Kentucky.

UnitedHealthcare brings one of the most specific demands to the table before the mediation takes place.

“[P]rior to the mediation and included with each party’s mediation statement, each [Medicaid company] must acknowledge a willingness to permit reassignment of its membership,” UnitedHealthcare states.

WellCare and Humana reject the precondition of the Medicaid companies forfeiting members, which is a major sticking point for the lawsuit that preceded the order for mediation. The two government agencies and Aetna, Molina and Anthem reject any preconditions to the mediation talks.

How we got to this point

On Oct. 23, Judge Phillip Shepherd ordered that the state must allow Anthem to remain in the Medicaid program, expanding the number of participant companies from five to six, despite Anthem’s inability to win a contract in two RFP process in the last year.

In court, UnitedHealthcare filed a motion calling for Shepherd to amend his order to release the state from providing a contract to Anthem and to eliminate Molina Healthcare from the program and assign the members of the two companies to United.

With Anthem remaining in the Medicaid program and Molina taking over Passport’s members, UnitedHealthcare contends that there won’t be enough members in the program to make it viable or enough members for the state to meet its contractual obligation to provide enough members to help new Medicaid companies get started.