TheTimesTribune.com, Corbin, KY

June 25, 2013

State health departments could get payment


The Times-Tribune

CORBIN — By Ronnie Ellis / CNHI News Service

Kentucky’s health departments may soon be getting some money to back up an earlier court ruling that one of the state’s Medicaid managed care organizations must pay for treatments provided by school nurses.

On Monday Franklin Circuit Judge Phil Shepherd told attorneys for the Cabinet for Health and Family Services and Kentucky Spirit, the Managed Care Organization (MCO), he is “inclined” to order the state to pay the health departments out of money it is withholding from Kentucky Spirit.

In May, Shepherd ruled Kentucky Spirit must pay $7.9 million for the school services provided by local health departments. The state has been withholding payment to the MCO until it complies and was in court Monday on a motion to compel Kentucky Spirit to post bonds to cover the disputed payments while Kentucky Spirit appeals the May ruling.

“I would rather allow (the state to make the payments) than to post additional bonds,” Shepherd said after the state’s attorney, Richard Sullivan, said such an order would “be helpful” in securing federal Medicaid approval.

But Shepherd said the commonwealth would make the payment at its own risk. If Kentucky Spirit wins an appeal of Shepherd’s earlier ruling, it would be the state, rather than local health departments, which would have to refund the money.

Before Kentucky moved to a managed care delivery system for Medicaid, it paid health departments for the school nurse services. The other MCOs have made payments for the school nurse services but Kentucky Spirit objected to paying for the services because the nurses aren’t under direct, immediate supervision by a doctor.

When he issued his May ruling, Shepherd said the nurses work under doctor supervision even if the doctor is not present in the school building when the treatment is provided.

Kentucky Spirit is also attempting to break its contract with the state and cease operations in Kentucky, claiming the state under estimated costs of delivering services to Medicaid clients.

In another health care-related suit, Shepherd set a July 25 date to hear arguments in a suit filed by David Adams, a tea party activist, who claims Gov. Steve Beshear did not have the authority to establish a Health Benefit Exchange.

The exchange is an online website where individuals and some small businesses can shop for affordable health insurance.

The Beshear administration sought to have the case dismissed, but Shepherd ruled Adams has standing as a taxpayer to pursue the case. Adams’ attorney, Michael Dean, has filed a motion for a summary judgment in favor of Adams.

Beshear re-issued in amended form his original executive order establishing the exchange and Adams claims that isn’t legal. But Shepherd said the re-issued order does not substantively alter the arguments about a summary judgment.

Shepherd will allow attorneys for the state to respond to the motion and hear arguments on July 25.

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.