, Corbin, KY

State News

June 14, 2013

Mixed reviews on managed care


FRANKFORT - Kentucky’s Medicaid Commissioner says managed care is clearly improving health outcomes in the state, but some Kentucky lawmakers remain unconvinced managed care is working as it should.

Lawrence Kissner told members of the Program Review and Investigations Committee Thursday that the new way of delivering state and federally funded healthcare to the poor and disabled is producing more preventive screenings and improved health while the state is methodically resolving prompt pay issues for providers.

He also defended Gov. Steve Beshear’s decision to expand Medicaid to about 300,000 “working poor” people under provisions of the federal Affordable Care Act known to some as Obamacare.

His evidence for the latter statement met with skepticism from one Republican on the committee, Sen. Tom Buford, R-Nicholasville.

Kentucky moved last year from the traditional fee-for-service model of paying medical providers for Medicaid services to a managed care system where the state contracts with Managed Care Organizations on a per-patient, annual fee and the MCO then negotiates rates they will pay to medical providers. The intent from the state’s perspective is to save money and slow the rate of Medicaid costs.

But the new system met with widespread complaints from hospitals, pharmacies and other providers who contend the MCO’s are slow to pay.

Kissner said the state has resolved 95 percent of provider claims disputes and found only 4.5 percent of the complaints were due to prompt pay issues. Those are now being investigated by the Department of Insurance.

He said the state is using outside auditors to review performance of managed care and payment issues and MCOs which are found deficient in promptness of pay face penalties. Kissner said two of the MCOs, Kentucky Spirit and Coventry have been cited for failure to make prompt payments.

But lawmakers reserved most of their questions for Kissner’s defense of Medicaid expansion.

Kissner began by reeling off a long litany of health statistics showing Kentucky as one of the unhealthiest states in the nation.

Expanding Medicaid to those who earn 138 percent of the federal poverty line, Kissner said, will provide health care to about 300,000 people who can’t afford health coverage. Meanwhile, he said, the federal government pays for 100 percent of the cost of expansion for three years and 90 percent after 2020.

Kissner said 138 percent of the poverty level “is about equivalent to minimum wage, so it is the working poor who couldn’t afford insurance that will be covered.”

He also said any additional costs to the state General Fund will be more than offset by the economic impact during the years when the federal government pays all the costs. According to studies cited by Beshear when he announced expansion of Medicaid, the state will benefit from lower costs in indigent care subsidies, creation of jobs and economic activity produced by the expansion.

After the federal match drops back to 90 percent, the difference will equal out, Kissner said.

Buford wasn’t convinced and offered several criticisms of the ACA, including insurance companies offering “skinny plans,” basic low-cost plans which provide little coverage, to the possibility some employers will reduce hours to avoid the requirement they pay insurance under the law.

He noted recent studies which show Kentucky has too few primary care providers for current needs and that about one-third of physicians won’t serve Medicaid clients.

When finished, Buford told Kissner his remarks were “more of a commentary, I guess, than a question.”

But Kissner said study after study shows a correlation between health status and health insurance coverage and expanding Medicaid should improve Kentuckians’ overall health while providing a net economic benefit to the state.

Several lawmakers asked Rep. Fitz Steele, D-Hazard, the committee chair, if there will be future opportunities to question Kissner.

“They’ll be with us at every meeting throughout the rest of the year,” Steele responded.

Kissner later said he’s happy to come back before the committee.

“I welcome the opportunity to spread the news that we are driving better health care outcomes,” Kissner said.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at Follow CNHI News Service stories on Twitter at

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