Medicaid managed-care firms get new contracts with new rules aimed at resolving health-care providers' issues with program

Kentucky has signed new contracts with five managed-care firms that will manage Medicaid coverage for more than 1.1 million Kentuckians. Contracts were awarded to Anthem, Coventry Cares, Humana, Passport and Wellcare.

Kentucky changed Medicaid to managed care from a traditional fee-for-service model in 2011 to save money, and officials say it has worked. Health-care providers remain unhappy about denial and delay of claims by the managed-care organizations (MCOs).

“Statistics confirm that moving to a managed-care model has saved Kentucky taxpayers more than $1.3 billion in state and federal funds while simultaneously improving the delivery of health-care services to our Medicaid population," Health Secretary Audrey Haynes said in a news release.

At the same time, managed care has been a good deal for the companies, except Humana. "Last year, [they] cleared more than $500 million in income above expenses, according to statements companies must file with the Kentucky Department of Insurance," Debby Yetter reports for The Courier-Journal. "Some of the profits ranged from 7 percent to nearly 18 percent in 2014," but the new contracts limit that to about 6 percent.

They also require 82 to 87 percent of the payments to the MCOs to be spent on direct services to its members. The payments are per-person fees, based on the number of people whose care is being managed.

Haynes said the contract improvements "should please consumers, advocates and our health care providers" and "will translate into more options and improved services from our managed care companies."

The new contracts also address many of the issues about which hospitals and other providers have been unhappy, such as slow and reduced payments, complicated paperwork and other procedural differences among the companies.

The new contracts require a standardized contract and standardized forms for prior-authorization requests, grievances, appeals and claims.

Two passionately debated bills in the recent legislative session challenged some of the practices of the current MCOs: one seeking an appeals process for denial of payment and the other removing a cap of "triage fees" for emergency room services that MCOs later deem not to be emergencies.

Both issues were addressed in the new contracts. Now, MCOs must make sure they are using appropriate medical specialist to determine "medical necessity," initially and in any review process, and the cabinet will be responsible for reviewing denials of "medical necessity" appeals and denials of payment for emergency-room use.

Sen. Ralph Alvarado, R-Winchester, co-chair of the joint House-Senate Medicaid Oversight Committee, told Yetter that "he hopes the new contracts will clear up the problems" and he also hopes "the state succeeds in controlling profits of the managed-care companies, calling it an outrage that some companies are reaping millions off the program while denying care or delaying payment."

The new contracts also include incentives for MCOs and Medicaid members to decrease use of emergency rooms, and encourage the expansion of behavioral health services.

They offer incentives to to MCOs to continue to improve health outcomes for their members, and spells out new, stringent standards for companies that don't comply with their contracts.

The contracts are for one year beginning July 1, with the option of four annual renewals.

Republican legislators question cabinet's figures on managed-care payments and cost projections for Medicaid expansion

Audrey Haynes (cn|2 image)

"When Audrey Haynes sat down before the legislature’s Medicaid Oversight and Advisory Committee Wednesday, she expected the data she brought would persuade lawmakers that Kentucky’s expansion of Medicaid has been good for the state," Ronnie Ellis reports for CNHI News Service. "The secretary of the Cabinet for Health and Family Services, which administers the Medicaid program also may have expected her statistics to ease unhappiness with the state’s move to managed care for most Medicaid services."

"It didn’t happen," Ellis writes. "At least she didn’t persuade Republican members who openly questioned the validity of the cabinet’s data, a couple stopping just short of saying the cabinet is making up the numbers" about payments to providers by managed-care organizations, which it says are 99 percent on time. “The numbers do not appear to represent the reality on the ground,” Rep. Richard Benvenuti, R-Lexington, said after the meeting.

Sen. Ralph Alvarado

“I think those are false,” Sen. Ralph Alvarado, R-Winchester, said after the meeting. “I don’t know if they’re lying, but somebody is providing bad information.”

During the meeting, Alvarado read "segments of letters from providers who have not received full reimbursements from managed care organizations," reports Kevin Wheatley of cable channel cn|2's "Pure Politics."

"Haynes referenced a report from CHFS which showed that over 90 percent of Medicaid claims are being paid in a timely manner," reports the blog of the Kentucky Chamber of Commerce. "Sen. Alvarado replied that this statistic does not match what he is hearing from his constituents and medical providers." Haynes addressed the managed-care issue in her PowerPoint presentation, downloadable here.

Rep. David Watkins, D-Henderson, a retired physician and co-chair of the committee, "urged the panel to find ways to improve managed care."

Watkins said the managed-care organizations, which are insurance companies or their subsidiaries, should come before the committee to answer questions. “I’m not totally satisfied that they’re doing quite as good a job as your report here would portray,” he told Haynes. “I think they need to be more accountable. I think they need to be more responsive to the providers who actually are doing work in the field.”

The MCOs will appear before the joint House-Senate committee Aug. 19, Brad Bowman reports for The State Journal in Frankfort. For cn|2's three-minute clip of the discussion between Haynes and Alvarado, via YouTube, click here.

The Republican lawmakers also voiced skepticism, but offered no contrary evidence, about the cost of expanding Medicaid to households with incomes up to 138 percent of the federal poverty level, from the previous limit of 69 percent. Under the Patient Protection and Affordable Care Act, the federal government is paying the entire cost of the expansion until next year, when the state will begin paying a small part, rising to the law's cap of 10 percent in 2020.

Haynes noted projections for Democratic Gov. Steve Beshear's administration that the expansion would add $30.1 billion to the state's economy through 2021, and would pay for itself until then, even after the state starts picking up part of the cost. The numbers were not new; they were part of a study by Deloitte Consulting and the University of Louisville that Beshear released in February.

Republicans focused on the prediction that the expansion would cost the state a net $45 million in 2021. "I know that seems like a way long ways off and some of you may no longer even be in the position to deal with it, but some of us probably will and the taxpayers will," said Alvarado, a physician.

Haynes "stated that she believed with the financial boost to the economy through jobs, the costs will be offset," the blog of the Kentucky Chamber of Commerce reports.

“Now that we’re seeing the lowest unemployment that we’ve seen in our state in quite a number of years, I’m sure each of you are amazed at how that we’ve had all 120 counties in our state where the unemployment rate has gone down,” Haynes said. “As this state continues to generate revenue and hopefully, as is planned, this is a bridge program for people who basically are hard-working people, but their employer does not provide insurance or they have children and therefore that qualifies them from an income basis for Medicaid.”

Kentucky re-bidding Medicaid managed care contracts to address complaints of patients, advocates and health-care providers

By Melissa Patrick
Kentucky Health News

State officials are re-bidding Medicaid managed-care contracts that cover more than 1.1 million Kentuckians. The news came as a delight and surprise to many health-care providers and patient advocates.

“I was both stunned and thrilled by the announcement. I did not know it was coming,” Sheila Schuster, a Louisville mental-health advocate, told Tom Loftus of The Courier-Journal. “A number of the changes that they say will be part of the new contracts are things those of us in the behavioral health community have brought up time and time again.”

Kentucky changed to Medicaid managed care from a traditional fee-for-service model in 2011 to fill a projected budget overrun of $166 million. Health Secretary Audrey Haynes said in a news release that doing so has "saved Kentucky taxpayers more than $1.3 billion in state and federal funds" and had also improved the delivery of health care to the Medicaid population.

"However, after several years of experience, we determined it was time to retool, rebid and strengthen the contracts to appropriately address concerns expressed by advocates and healthcare providers," Haynes said.

The transition to managed care has been met with consistent complaints from both patients and providers, despite efforts of the cabinet to work through the issues and keep the channels of communication open between providers, the cabinet and the managed-care organizations.

Two passionately debated bills in the recent legislative session challenged some practices of the current MCOs: one seeking an appeals process for denial of payments and the other removing a cap of "triage fees" for emergency-room services that MCOs later deem not to be emergencies.

Both issues have been challenging to the financial health of rural hospitals. State Auditor Adam Edelen addressed many such issues in a recent report on the financial health of rural hospitals.

“We are pleased to see the cabinet taking steps to improve and strengthen managed care contracts, many of which we recommended in our recent report on the financial strength of rural hospitals,”Edelen told Insider Louisville.

Some requirements for the new contracts include: required statewide coverage; standardized rules among the MCOs; improved administrative processes; increased oversight of claim denials; continued expansion of behavioral health services; incentives for MCOs to work with Medicaid patients to decrease emergency-room use and improve their health; and increased penalties to assure contract compliance. Click here for the Cabinet for Health and Family Services' complete Request for Proposal.

“I’d like to say that they heard the voice of the people,” Schuster told Insider Louisville.“If you look at the Medicaid Advisory Council, those meeting are every two months and it’s the same litany of complaints and concerns every darned time with no response. The only thing I can think of is it’s a gesture by this outgoing administration to get things right so that regardless of who comes in next year, there are strong contracts in place. I applaud them for it, and I’m stunned.”

The current contracts with Anthem, Aetna's Coventry Cares, Humana's CareSource , Passport and Wellcare expire on June 30, 2015 and proposals for the new contracts are due by May 5. The statewide contracts will be awarded to multiple MCOs for a one-year period with four, one-year renewal option, according to the news release.

Auditor will hold meetings in Prestonsburg, Princeton and Sonerset to discuss his report on financial status of rural hospitals

State Auditor Adam Edelen will hold three public meetings in rural communities to discuss the findings of his special report about the financial health of rural hospitals.

The meetings will be held Monday, April 21 at 1 p.m. at the Mountain Arts Center in Prestonsburg; Monday, May 4 at 11 a.m. (CT) at the Caldwell County Memorial Hospital in Princeton; and Thursday, May 6 at 1 p.m. at the Liberty center of Somerset Community College.

The report, which covers fiscal years 2011 through 2013, found that as many as one-third of Kentucky's rural hospitals were in poor financial shape, with 68 percent of them ranking below the national average financially.

“Although closure may be an unfortunate reality for some," Edelen said in the press conference, "I believe more can and should be done to help these hospitals rethink their models of business in delivering health care in the 21st century." He went on to suggest rural hospitals consider hiring outside managers, merge with larger hospitals, form coalitions with other rural hospitals or find a specialized health niche as possible alternate business models to consider.

The report calls for the creation of a state work group to monitor rural hospitals, including making sure state law gives them the flexibility to retool their business models. Susan Zepeda, president and CEO of the Foundation for a Healthy Kentucky, suggested that the proposed work "could be incorporated into the work already under way under a State Innovation Model grant, which is engaging many sectors of health service in Kentucky in an ambitious, collaborative redesign effort."

Edelen said some of the primary problems faced by rural hospitals stem from the many changes in health care since the inception of Medicaid managed care, a decrease in the number of health-care providers, and an economic climate in some areas that doesn't support the current health payment model, which depends on the majority of its users to have private health insurance.

The report suggested that the Cabinet for Health and Family Services negotiate better contracts with managed-care organizations as it approaches the June 30 deadline, especially to address provider payments, stricter penalties for non-compliance and increased administrative burdens that managed care has put on hospitals. Edelen and Haynes sounded hopeful that this was going to happen.

Gov. Steve Beshear called Edelen's report "a dated snapshot" because the 2013 data used in the report does not include 2014 information,when the federal health reform was fully implemented through expansion of Medicaid to people with incomes up to 138 percent of the federal poverty line. Beshear said hospitals received $506 million to care for such people in 2014 while seeing significant reductions in losses on patients who couldn't or wouldn't pay.

Edelen's spokeswoman, Stephenie Hoelscher, said in an email that Edelen believes the full effect of all the changes in health care to hospitals' bottom line is still not clear, and his report establishes a baseline for critical analysis going forward.

Up to 1/3 of rural hospitals in poor financial shape, auditor finds, calling report a baseline for local decisions that could be tough

By Melissa Patrick and Al Cross
Kentucky Health News
For a video of Edelen's press conference, click here. For a cn|2 report with video, go here.

FRANKFORT, Ky. -- As many as one-third of Kentucky's rural hospitals are in poor financial shape, and the survival of some will likely depend on their willingness to adopt new business models, state Auditor Adam Edelen said Monday.

Unveiling a nine-month study, Edelen said 15 of the 44 hospitals examined were in "poor financial health," and warned, "Closure may be an unfortunate reality for some."

Rural hospitals in purple declined to make useful financial information available to the auditor's office.

The study did not include 22 of the 66 Kentucky hospitals that are located outside metropolitan areas, which declined to participate or didn't provide the type of information requested. Edelen said those hospitals are mainly privately owned. If they had been included, Kentucky Hospital Association CEO Michael Rust said, the financial picture "would be better, but I don't think they would be substantially different."

Gov. Steve Beshear said the report was "a dated snapshot" because its most recent data was from 2013, before federal health reform was fully implemented. "Conditions are no longer the same," Beshear said in a news release. "Hospitals received more than $506 million in 2014 through new Medicaid expansion payments, while seeing significant reductions in uncompensated care costs.  Those are huge changes to hospitals’ bottom lines that are not shown here."

Edelen, who was Beshear's first chief of staff, said the full effect of federal health reform isn't certain. His report noted that Kentucky hospitals have had higher-than-average penalties from Medicare for readmitting patients within 30 days, a newly implemented feature of the law. Forty of the 63 hospitals penalized were rural, and nine of the 39 in the U.S. that got the maximum penalty were in Kentucky.

"This report doesn't speak to causation" by the reform law or the state's relatively new managed-care system for Medicaid, Edelen said, it is "not a rebuke" of either, but provides "a baseline for monitoring" by policymakers at the state and local levels.

The report says that to survive, rural hospitals must adapt to new business models, such as merging with larger hospitals or hiring them as managers, forming coalitions with other rural hospitals, or finding a health-care niche that hasn't been served.

Edelen cited Rockcastle Regional Hospital, which has become a niche provider of ventilator dependent care and the coalition formed by Morehead's St. Claire Regional Medical Center and Highlands Regional Hospital in Paintsville to provide more efficient care, improve patient access and adapt to changes under the reform law.

Adaptations might be a hard pill to swallow for many rural hospitals because they call for yet more change in the rapidly changing health-care landscape of electronic health records, managed care, Medicaid expansion and full implementation of the Patient Protection and Affordable Care Act.

Edelen said adaptation is important for rural communities, for whom "the importance of rural hospitals cannot be understated. They provide health care to 45 percent of Kentuckians and in every community they serve they act as one of the larger employers, paying a significantly higher wage than the average the community experiences."

He also cited the many small hospitals that have formed relationships with larger networks to relieve the increased administrative burden associated with the three-year-old managed-care system. The report says half the hospitals studied have reported an increase in hours spent on administration.

The report suggested that the state Cabinet for Health and Family Services negotiate better contracts with managed-care organizations, partly to streamline MCO rules and paperwork to reduce the administrative burden. "We are optimistic that the current work of the cabinet to improve those contracts is going to bear real fruit," Edelen said.

The new contracts will start July 1. In an interview, cabinet Secretary Audrey Haynes sounded optimistic about them but said she couldn't give details.

Haynes has been saying since she became secretary three years ago that many hospitals must change the way they do business. She said in an interview that the readmission penalties have forced hospitals to change by providing better discharge planning, and utilizing outpatient services like home health, nursing homes and rehabilitation.

One Kentucky hospital, in Nicholas County, has closed in the last year. Haynes said the cabinet is working with Fulton County, whose hospital is scheduled to close March 31, to explore how to continue providing care at the facility, such as an emergency room or an ambulatory surgical center.

Haynes recommended in the interview that all nonprofit hospitals put audited financial records and their tax returns on their websites and adhere to open-meeting laws.

In a lengthy response, included in the report, Haynes rejected Edelen's suggestion that her cabinet regularly monitor the fiscal strength of rural hospitals. She said in the interview that would pose a conflict of interest, since the cabinet regulates the hospitals.

Edelen's analysis of hospitals' financial health was based on percentage of revenue kept as profit, number of days of cash on hand, debt financing and depreciation. It found that the financial condition of 68 percent of Kentucky’s rural hospitals scored below the national average.

Edelen's office also surveyed rural hospital administrators, held 11 public hearings and met with representatives of all five Medicaid managed-care companies. His report found that:

• Rural hospitals that were geographically well-positioned, such as Pikeville Medical Center, scored high while geographically-isolated hospitals, like those in Clinton and Wayne counties, scored low. The Clinton County Hospital is in bankruptcy to restructure debt incurred for an expansion and modernization.
• The Pikeville hospital, formerly Pikeville Methodist, was one of only three judged to be in excellent financial health. The others were critical-access hospitals in Franklin and Morganfield.
• Critical-access hospitals, which limit their beds, services and patient stays to qualify for federal reimbursement at 101 percent of cost, scored better than regular acute-care hospitals. They accounted for seven of the 14 that were above the national average and thus were rated "good."
• Fifteen hospitals were rated "fair" and 15 were rated "poor." Westlake Regional Hospital in Columbia, which is in bankruptcy, was at the bottom, far worse than the next highest, St. Joseph Mount Sterling.
• The number of health-care providers across the state – particularly in rural Kentucky – dropped significantly between 2013 and 2014. The cabinet disputed that finding, based on different measurements.

Here are the rankings (click on the image for a slightly larger version):

Health reform law has been good for hospital finances, health-care costs, Obama administration says

U.S. hospitals have saved billions of dollars because the federal health-reform law has provided coverage for patients who were once charity cases, the Obama administration announced Monday, the fifth anniversary of the Patient Protection and Affordable Care Act.

"Hospitals also saw fewer emergency room visits, which rack up far higher costs and often leave hospitals with the tab," Sarah Ferris writes for The Hill, which covers Congress. "The government’s report, which focuses on the benefits of Medicaid expansion, is an effort to entice states that have been politically resistant to expanding the program."

Kentucky hospitals have acknowledged that the law has reduced their losses from "uncompensated care," but say other aspects of the law have created a mixed effect, depending partly on hospitals' ability to adapt. The increase in coverage has brought hospitals much more money, but they say continued problems with managed-care Medicaid have cause them financial difficulty.

From paying patients' point of view, the law appears to have reduced inflation in health-care costs, but has not achieved advocates' goal of reducing costs. A White House report said, "Since the Affordable Care Act was enacted, health care prices have risen at the slowest rate in nearly 50 years. Thanks to exceptionally slow growth in per-person costs throughout our health care system, national health expenditures grew at the slowest rate on record from 2010 through 2013."

For the White House's Kentucky-specific list of benefits of the law, click here.

Advocates of state appeals for Medicaid managed-care claims make last-ditch effort to get it passed, by hijacking another bill

By Melissa Patrick
Kentucky Health News

FRANKFORT, Ky. -- Advocates of a bill to create a state appeals process for health-care providers to appeal decisions of Medicaid managed-care companies are trying to jam it through at the end this short legislative session on the coattails of an unrelated bill that appears to be uncontroversial.

Rep. Joni Jenkins

Senate Bill 120, sponsored by Sen. Ralph Alvarado, a Republican physician from Winchester, would create an administrative appeals process in the Cabinet for Health and Family Services, which opposes the idea. A Senate committee has attached Alvarado's language as an amendment to House Bill 71, sponsored by Rep. Joni Jenkins, D-Louisville, that would allow judges to order a person who is "incapacitated by alcohol and other drug abuse" into treatment.

"I think it has the potential of killing this bill," Jenkins said in an interview. "I heard there was a really large price tag put on [Senate Bill 120], a large fiscal load. So this late in a non-budget year, it is probably going to kill it."

Sen. Julie Raque Adams, chairperson of the Senate Health and Welfare Committee, disagreed. "Everybody in the Senate [is] very supportive of Rep. Jenkins' bill, and we have also passed out Senate Bill 120 from this chamber," she said in an interview.

SB 120 passed the Senate 35-0 on March 2. HB 71 passed the House 90-1 on Feb. 26.

Rep. Robert Benvenuti of Lexington, Republican co-chair of the Democrat-controlled House Health and Welfare Committee, said he thought SB 120 "has a lot of support" on the House floor if leaders of the House's Democratic majority allowed it to come up for a vote.

But to get a floor vote it must first come out of the committee, and that appears unlikely. The legislature can still pass bills on March 23 and March 24, after the 10-day recess for Democratic Gov. Steve Beshear to veto bills, but if he vetoes bills passed then there is no opportunity to override vetoes.

"I think it is a bill that properly sets up a process for providers who believe they have not been properly reimbursed to have some redress," Benvenuti said in an interview. "Our health care providers who serve this commonwealth need to have an avenue of redress so that they can be properly paid for medically necessary services that they provide."

Alvarado has said an administrative appeals process is necessary because managed-care organizations are denying claims for medically necessary treatments and then denying the providers' appeals, which means providers are not getting paid for their work.

The cabinet says it should not be responsible for an appeals process for MCOs because they do not have any legal authority between a contract made between a provider and the MCO. They have also said it would cost the state money. MCOs are paid a flat fee for each person whose care they manage, but an increase in approval of initially denied claims could give them leverage in negoiations for the next annual contract.

The fiscal note for this bill says the cabinet estimates its administrative cost for an appeals process would be at least $1 million a year, which would increase in later years. Alvarado maintains that the added cost to the state should be minimal.

Jenkins, whose nephew, Wesley, died of a heroin overdose two years ago, said that this is the fourth year she has tried to pass this bill, with a lack of funding to pay for the program its main obstacle, "but with the passage of the ACA, it has opened up private insurers and Medicaid to pay."

Jenkins said if the House didn't concur with the changes made by the Senate, she hoped the Senate would withdraw its amendment.

Adams said if the House didn't concur, she would be "very receptive" to going into conference committee to resolve their differences because Rep. Jenkins "has got a very important bill that we need to pass."

As session nears end, bills on heroin, dating-violence orders, managed-care appeals and lawsuit review panels are hanging fire

By Melissa Patrick
Kentucky Health News

FRANKFORT, Ky. – The General Assembly has sent Gov. Steve Beshear four health-related bills, and several more could reach his desk in the legislative session that ends Wednesday. Legislators will return briefly after 10 days to reconsider any bills Beshear vetoes; they could also pass more bills, but would not be able to override any vetoes.

Here are some of the health-related bills that were pending on Monday; bills with two readings are ready for floor action.

Heroin: tougher penalties and needle exchanges?

Both the Senate and the House have heroin bills and both remain in committee in the other chamber, but hope remains high in both chambers that a compromise can be reached so that a heroin bill will pass this session. Senate Bill 5 is sponsored by Sen. Christian McDaniel, R-Latonia; House Bill 213 is sponsored by Rep. John Tilley. The main differences are how traffickers would be punished and whether to start needle-exchange programs for addicts. The Senate's penalties are tougher and it has opposed needle exchanges, which advocates say prevent disease and death from dirty needles and can lead addicts to treatment.

Now the Senate is moving toward accepting needle exchanges, James Pilcher reports for The Cincinnati Enquirer. Rep. Dennis Keene, D-Wilder, and Sen. Wil Schroder, R-Wilder, said exchanges "are much more likely to be included than when the session started," Pilcher writes. Schroeder told him, "I think there is a real possibility that we could include needle exchanges and then get our tougher penalties." Pilcher reports, "The possible legislative position shift comes as health officials throughout the Tristate have expressed deep concerns about the spread of diseases that can be contracted using dirty needles."

Protective orders for dating violence

House Bill 8, sponsored by Rep. John Tilley, D-Hopkinsville, has received its second reading and is awaiting passage in the Senate. This bill would allow dating partners to petition for interpersonal protective orders if they have been the victim of domestic violence, sexual abuse or stalking. Such orders are now available only to those who are married, live together or have lived together, or an unmarried couple with a child in common.

Kentucky is the only state that offers no protection for such victims. Legislation to do that has stalled in the Senate in earlier sessions, but a Senate committee substitute addresses a key objection, by creating a new chapter in the statutes for the bill, separate from the existing domestic-violence chapter.

Advocates say domestic violence is a health issue not just because of the physical injuries it causes. They say victims are more likely to be depressed, have unplanned and premature pregnancies, go to fewer prenatal visits, and to miss more well-child visits with their children.

Prescription synchronization, managed-care appeals

Senate Bill 44, sponsored by Sen. Julie Raque Adams, R-Louisville, has had its second reading in the House. This bill would allow patients with multiple prescriptions, in consultation with their health-care provider and their pharmacist, to synchronize prescriptions so that they may be picked up at the same time.

House Majority Caucus Chair Johnny Bell, D-Glasgow, has filed a floor amendment on an unrelated issue, to create a state appeals process for health-care providers to appeal decisions of Medicaid managed-care companies. It is the same as or similar to Senate Bill 120, sponsored by Sen. Ralph Alvarado, which has given it a first reading without assigning it to a committee. The Cabinet for Health and Family Services opposes a state appeals process, saying it would have a conflict of interest (successful appeals would cost the state money) and providers have the courts available to them to resolve contractual issues. UPDATE: Bell withdrew his floor amendment to Senate Bill 44 March 9. 

Review panels for suits against health-care providers: Senate Bill 6, filed by Alvarado, remains in the House Judiciary Committee, but a discharge petition was filed March 4 to bring it to the floor, bypassing leaders of the House's Democratic majority. This bill would establish panels of three medical experts, two chosen by each side and the third chosen by the other two, to review suits against health-care providers to determine if the case has merit before the lawsuit can proceed. Panel findings would be admissible in court, but not legally binding. Opponents say that Kentucky already has laws to punish attorneys for filing frivolous cases and that this just adds another barrier for patients seeking justice.

Newborn screenings for fatal disease: Senate Bill 75, sponsored by Sen. Alice Forgy Kerr, R-Lexington, has had two readings. It would require all newborns to be tested for Krabbe disease, a neurological disorder that destroys the protective coating of nerve and brain cells and is fatal once symptoms occur. Treatment with stem cells from an umbilical cord blood transplant is sometimes successful it the infant is treated early enough. The cabinet opposes the bill, saying the screening will cost half a million dollars a year at a time when local health departments are suffering budget cuts.

Spina bifida: Senate Bill 159, sponsored by Sen. Julie Raque Adams, R-Louisville, is in the House and the three-day posting rule has been waived. This bill would require medical providers to supply written, up to date, accurate information to parents when their unborn child is diagnosed with spina bifida so parents can make informed decisions on treatment

Physician assistants: House Bill 258, sponsored by Rep. Denver Butler, D-Louisville, is awaiting Senate passage. This bill allows a physician to supervise up to four physician assistants at the same time, rather than two.

In-home care: House Bill 144, sponsored by Rep. Tom Burch, D-Louisville, is awaiting Senate passage. It would establish a 60-day, hospital-to-home transition program through an approval waiver from the Department for Medicaid Services. The daily cost would have to be less than the average daily nursing home payment allowed by Medicaid. The bill would also provide non-medical support services to the applicant as needed.

BILLS SENT TO THE GOVERNOR

Colorectal cancer screening: Senate Bill 61, sponsored by Sen. Ralph Alvarado, R-Winchester, received final passage in the House March 4. This bill requires that a fecal test to screen for colon cancer, and any follow-up colonoscopy, be considered preventive measures that health insurance is required to cover without imposing additional deductible or co-insurance cost. The bill would apply to health plans issued or renewed on or after Jan. 1, 2016, if it becomes law. A similar measure, House Bill 69, sponsored by Rep. Tom Burch, D-Louisville, is awaiting passage in the Senate with a committee substitute by Sen. Julian Carroll, D-Frankfort, calling for a Medicaid savings study.

Medical order scope of  treatment (MOST) form: Senate Bill 77, sponsored by Sen. Tom Buford, R-Nicholasville, received final passage in the House March 3. This bill creates a medical order scope of treatment (MOST) form that specifically directs the type of treatment a patient would like to have, and how much intervention he or she would like to have, during end-of-life care. It is considered a physician's order, travels with the patient between health care facilities, and must be reviewed annually. The bill clearly defines the order of controlling documents for end-of-life care: the living will first, the MOST form second and the health-care surrogate, which is chosen by the patient and listed on the form, third. The MOST form is already used in 32 states.

Emergency care for strokes: Senate Bill 10, sponsored by Sens. Stan Humphries, R-Cadiz, and David Givens, R-Greensburg, received final passage in the House March 4. The bill requires that a list of all acute stroke-ready hospitals, comprehensive stroke centers and primary stroke centers in Kentucky be posted to the cabinet's website and be made available to all emergency medical services providers, who are required to set their own internal protocols toward assessment, treatment and transport of stroke patients.

Funding for UK cancer research center: House Bill 298, sponsored by Rep. Rick Rand, D-Bedford, received final passage in the Senate March 4. This bill authorizes the state to appropriate $132.5 million, half of the cost, for construction of a new medical research center at the University of Kentucky. The university will raise money to cover the other half. The facility will target prevalent diseases in Kentucky, including cancer, diabetes and cardiovascular disease. The bill required a 60 percent vote in each chamber because it affects the state budget and the legislature is in a non-budget session; it passed the House 83-9 and the Senate 36-1 (Sen. John Schickel, R-Union).

State Senate passes bill for independent appeals process for managed-care claims; hearing gets into details of the problem

By Melissa Patrick
Kentucky Health News

Managed-care organizations' contracts allow them to deny Medicaid claims and not reimburse for services if they deem them not medically necessary. That means health-care providers often don't get paid for providing care, and their only recourse is an internal review by the MCO.

Sen. Ralph Alvarado

"It appears some of our MCOs are using this denial method in order to, as they term it, 'manage care'," Republican Sen. Ralph Alvarado said at a Senate Health and Welfare Committee hearing on his Senate Bill 120, which would set up an independent appeals process for providers, much like those in Georgia and Virginia.

The  bill, which had been in the works for several years, passed the Senate March 2 and was received in the House March 3. Its prospects in the House appear poor because it is opposed by the Cabinet for Health and Family Services, which oversees Medicaid. Its main targets are MCOs WellCare of Kentucky and Coventry Cares of Kentucky.

Alvarado, a Winchester physician, said in an interview that he pointed out these companies because they have the highest denial rates. While other companies also have complaints, "They are very small and minor, what you would expect in the normal course of business," he said. "It is WellCare and Coventry; these two are the names that keep coming up over and over again."

Asked for comment, Coventry said in an e-mail, "Coventry continues to monitor the legislation as it moves through the process. We are working with lawmakers to protect the integrity of the managed Medicaid program and be responsible with taxpayer dollars."

WellCare said in an e-mail that its appeals process is adequate, offering two additional remediation alternatives, negotiation and arbitration. The company said MCOs are "continuously subjected to rigorous oversight by state, federal and national accreditation entities," which ensure that they "adhere to strict standards and evidence-based guidelines in determining medical necessity."

Nina Eisner, board member of the Kentucky Hospital Association and chair of its Chemical Dependency Treatment Program, told the committee that providers deserve the same sort of state appeals process that patients have for denial of service.

"Kentucky's providers are under tremendous pressure from payment cuts from Medicare and slowed and denied payments by MCOs," Eisner said. "It is untenable and unreasonable to expect that Kentucky providers can provide health care services for free."

She said that many of the disputes stem from MCO reviews using out-of-state physicians who "don't always understand the rural nature of our state and the lack of resources." She said one example is discharging rural patients from inpatient to outpatient behavioral-health or substance-abuse treatment where no outpatient services are easily acessible.

"The MCOs in Kentucky are quite profitable," Eisner said, citing a November analysis by Citi Research that found Kentucky's MCO plans generated over $450 million in earnings before interest, taxes and depreciation from the state Medicaid program. "This is a margin of 10.6 percent, which is more than two times the 3 to 5 percent margin most Medicaid plans target."

Sen. David Givens, R-Greensburg, said he was compelled to remind those at the hearing that private companies need to be profitable to keep the system working. Later, Sen. Danny Carroll, R-Paducah, disagreed, saying MCOs' profits need to be more balanced.

Medicaid Commissioner Lisa Lee said that it is balanced, because MCOs were required to spend 87 percent of their payments on the population newly eligible for Medicaid or give it back to the federal government, and that rates going forward depend on what they spend today.

KHA's Nancy Galvagni said another reason for a state appeals process is the variation between plans' denial rates, ranging from a low of 7 percent to a high of 18 percent. She said that providers have gone to state hearings on behalf of their patients and had favorable opinions, only to have them overturned by the Cabinet.

Tina Heavrin, general counsel for the cabinet, said that occurs because the cabinet only has authority to decide whether patients received services, and if they did, there is no claim and any dispute regarding payment is between the MCO and the health-care provider.

Sen. Julie Raque Adams, the committee chair, replied, "I think that is the impetus behind this bill, that once the patient receives their service, they are done, but the provider is not. ... I don't want to go to work and not be paid for it. And I don't think that is an unreasonable thing to request or require and I think that is all that this bill does."

Heavrin said that providers do have a process to resolve these issues, "It is called the judiciary." She said the cabinet can't run an appeals process for MCOs because it "as part of the executive branch, doesn't have jurisdiction or legal authority over an adjudication of private contract rights." She added, "The MCOs are our contractors and it would be difficult to not have a financial interest in the outcomes of those appeals," meaning that upholding an appeal would cost the state money.

Lee said the cabinet acknowledges issues with MCOs. She said that while state officials should not get in the middle of contract disputes, "We do listen to our providers" and "want to hold our MCOs accountable," noting that they had "made some significant progress with managed care" since its inception in 2011.

Carroll, who deals daily with MCOs through his non-profit agency that provides therapy services and medical-based child care, said, "It is an absolute nightmare dealing with MCOs," because of all the "hoops to jump through in order to get reimbursement."

He asked if there was any way for the cabinet to work these issues out in its new contracts and said it felt like the state had "brought in these MCOs and basically washed their hands of all the issues associated with it."

Heavrin said it would not be possible to include a state appeals process in the contracts because "We can't be a judiciary."

Lee told Carroll that state officials had not "washed their hands" of the MCOs and closely monitor their activities. "We also have an obligation to the Center for Medicare and Medicaid Services to make sure that every single thing that we pay for does meet medical necessity," she said. CMS is the federal agency that oversees those programs.

Beshear says Ky. rural hospitals 'have a positive cash flow' but he can't prove it; industry says it sees 'some improvement'

By Al Cross
Kentucky Health News

FRANKFORT, Ky. -- Gov. Steve Beshear says Kentucky's rural hospitals are profitable again, thanks to his expansion of Medicaid, but he offers little evidence to support his claim, and the hospital industry disputes it.

In a long, joint interview with Colorado Gov. John Hickenlooper at the Brookings Institution in Washington, D.C., Feb. 20, Beshear said, “Our rural hospitals have a positive cash flow for the first time in a long time, so it’s working, it’s going to work, and my job is just to get it so embedded that nobody can do anything about it.”

Kentucky Health News asked Beshear's office for evidence of rural Kentucky hospitals’ positive cash flow, but the office cited only a news story about Carroll County Memorial Hospital in Carrollton, which said it turned a small profit in 2013 (thanks to federal health-reform grants for digitizing medical records) and a much larger one in 2014.

"Some of them have improved and some of them have not," said Mike Rust, president of the Kentucky Hospital Association. As a result of Medicaid expansion, he said, "Some have benefited greatly but others are still struggling."

The association's vice president of health policy, Elizabeth Cobb, said, "In general we’re seeing some improvement in rural hospital finances," largely from a decline in the number of charity cases as a result of previous patients having coverage. "We were already taking care of most of those," she said.

State figures show Medicaid payments to rural hospitals rose 20 percent in the state fiscal year that ended June 30, 2013, but only 6 percent in the next year, when the Medicaid expansion began; and that the payments to urban hospitals rose 4 percent and 10 percent the last two years.

Based on claims from July through September, the state forecasts that Medicaid payments to rural hospitals in the current fiscal year will increase 26 percent, and payments to urban hospitals will rise 15 percent. (The state has estimates for each hospital.)

Cobb said the expansion hasn't generated as many new patients as might be expected for rural hospitals because of the shortage of primary-care physicians who admit patients: "We're not seeing a huge expansion of utilization as a result of Medicaid expansion."

That keeps patients coming to hospital emergency rooms for care, some of which is deemed non-emergency by managed-care organizations, the insurance-company subsidiaries that have overseen the care of Medicaid beneficiaries since 2011. Two MCOs pay only a $50 "triage fee" in such cases, regardless of what diagnostic tests the hospital performs; that was the topic of a legislative hearing last week.

And that is just one part of hospitals' problems with the MCOs. "What we're seeing generally is that while hospitals are receiving payment for some patients who may have been uninsured previously and are now insured by Medicaid, we're still seeing the challenges of hospitals being paid by managed-care organizations," Cobb said. "There's an increase in the administrative burden for small hospitals to work with five different MCO plans that all have very different rules and criteria."

Clinton County Hospital Administrator J.D. Mullins cited MCO problems is explaining his facility's decision to file for bankruptcy last year, mainly to restructure payments on the federal loan for a $14.7 million addition completed a few years ago, the Clinton County News reported.

"These companies’ polices have restricted access to the hospital’s services and reduced our reimbursement even more," Mullins told the Albany paper. "When the idea of a new hospital facility was first proposed, no one could have foreseen the condition of health care today."

The hospital is in the district of Sen. Max Wise, R-Campbellsville, who told fellow members of the Senate Health and Welfare Committee Feb. 26, "I would love to take the governor's report to the six of my seven counties out in rural Kentucky that are struggling right now in their hospitals. . . . What I'm hearing from them is the system is broken and it continues to be broken."

Wsie was referring to Beshear's recent report that Medicaid expansion is generating more money, jobs and tax revenue than forecast. Another committee member, Sen. Ralph Alvarado, R-Winchester, said, "Almost every senator here has received letters that say: This stinks, we are not getting paid, we are going under."

Cobb said some rural hospitals are reporting cuts in jobs and services. That is probably reflected in U.S. Bureau of Labor Statistics data compiled by Paul Coomes, emeritus economics professor at the University of Louisville. It shows hospital employment trending down while other health-care jobs have been going up.

While Carroll County and others are benefiting from federal digitization grants, "That funding’s going to go away," Cobb said, and "Every year you've got to pay for upgrades, and the requirements continue to increase at the federal level." Federal officials say digitization should make hospitals more efficient.

Of the Carrollton hospital, Cobb said, "That’s a special situation. That’s not a typical one." She said the facility "put in place a lot of measures to try to improve their management" and has partnered with larger hospitals to offer more services, such as cardiology, "and that’s breathed some life back in."

Rural hospitals in Nicholas and Fulton counties have closed in the last year, and state Auditor Adam Edelen, who is preparing to issue a report on rural hospitals, has warned that others are in danger, threatening to put new obstacles between rural Kentuckians and health care. "Not acknowledging the looming access issue is a disservice to the low-income and elderly Kentuckians who are depending on an intact provider network,” Edelen spokeswoman Stephenie Hoelscher said.

Bill would require Medicaid managed-care firms to pay contracted fees for ER visits; Senate hearing targets two companies

This story has been updated with comments from Wellcare of Kentucky.

By Melissa Patrick
Kentucky Health News

FRANKFORT, Ky. -- Managed care is touted as a way to achieve value-based care in the Medicaid program, but hospital emergency rooms in Kentucky aren't finding much value in not being paid the contracted price for their services by two of the managed care organizations.

Officials of two Kentucky hospitals told the Senate Health and Welfare Committee Feb. 25 that Wellcare of Kentucky and CoventryCares of Kentucky are denying payment for as many as half of their emergency-room patients who seek care in their facilities, reimbursing the hospital a flat $50 "triage fee," less the patient's $8 co-payment, regardless of diagnostic tests performed in the ER.

Cheri Sibley, CEO of Clark Regional Medical Center in Winchester, noted that emergency rooms are required by law to screen patients with appropriate diagnostic tests to rule out an emergency condition if they come to the emergency room and ask for care.

Wellcare and Coventry are two of the five Medicaid managed-care organizations that oversee care for the state.

Wellcare said in an e-mail that it is required by the Department of Medicaid Services to "have an affirmative program to address the high cost of emergency room treatment for conditions that do not require this level of care." The company said the triage fee is just one measure it has taken; it said an "emergency room prudent layperson program" has helped "identify and sometimes prevent payments as much as 500 percent to 1,300 percent more in an emergency room as compared to a physicians office for common ailments such as ear aches and sore throats."

Sen. Ralph Alvarado, a physician from Winchester, has sponsored a bill that would require MCOs to pay the previously negotiated rate for emergency-room examinations and allow the ER doctor to determine whether a patient's condition is an emergency or not,.

"This bill is an attempt to keep our Medicaid managed-care organizations accountable," Alvarado said at the meeting. "MCOs have been shortchanging our providers and our hospitals -- and, I would argue, purposefully -- for the past three years. . . . MCOs are basically managing health-care cost by non-payments to providers."

Since the advent of managed care in 2011, hospitals have complained about late and denied payments and difficulty dealing with MCOs. "The problem has reached critical mass, threatening the survival and financial viability of our hospitals, and almost every legislature has been contacted by their local hospital provider regarding these (issues)," Alvarado said.

Kentucky implemented managed care as a way to save money. Basically, insurance company subsidiaries get a certain sum per patient and increase their profits by controlling costs. The Cabinet for Health and Family Services maintains that managed care focuses on quality and provides better accountability for care as opposed to the traditional fee-for-service model, but provider complaints about slow payments and rejections of claims have persisted since its inception.

Hospitals bill insurance and Medicaid based on the level of complexity of emergency-room care provided based on the symptoms the patient presents, regardless of the final diagnosis. Payment has typically been based on a fee that was pre-negotiated between the hospital and the MCO.

Wellcare and Coventry have since implemented a non-negotiated "triage policy," which allows these organizations to determine, after the fact, whether a patient had an emergency. If they determine that a patient was a non-emergency, regardless of presenting symptoms and cost of diagnostic procedures (X-rays, CT scans, lab tests, and so on), they only pay $50 minus the $8 co-payment, or $42. Wellcare implemented this policy in September 2012 and Coventry in April 2013.

The legislaure's Administrative Regulation Review Subcommittee found last May that the triage policies did not follow federal standards, according to Sibley and Alvarado.

"One side seems to be meeting their contractual obligation, while the other side seems to be deficient in meeting their contractual obligations," said Sen. Julie Raque Adams, R-Louisville, chair of the committee.

Hospitals can appeal MCOs' decisions, but "hospitals report that only a small number of these are overturned with no explanation of decision given," Sibley said.

Sibley gave an example of a claim that had been determined a non-emergency by one of these companies at her hospital: An 18-month-old girl was brought to the ER because she was blue in color, wheezing and short of breath. She had an X-ray, other diagnostic tests and a breathing treatment, but the hospital was paid $42 by the MCO plus the $8 co-payment, if the patient paid it.

"The two MCOs in question should not be deciding which patients are non-emergencies," Sibley said. "They should be abiding by their negotiated contract and paying the contract rate," 95 percent of allowed cost.

Sibley presented Kentucky Hospital Association data from 64 hospitals affected by these triage policies. The report found that during calendar year 2014, the hospitals reported submitting nearly 380,000 emergency room claims to Wellcare and Coventry, of which 140,000 were denied except for the $50 fee. The overall denial rate was about 37 percent; Wellcare's was 48 percent.

The KHA report said the difference in the flat fee and the contracted rate totaled $37.4 million, and that the more complex visits (and this likely the more expensive) were the ones most often denied payment.

"With one in four Kentuckians now on Medicaid, this problem is only going to get worse, if this is not corrected by this Senate Bill 88," Alvarado's legislation, Sibley said.

Georgetown Community Hospital CEO William Haugh said almost 30 percent of its ER visits in 2014 were Coventry or Wellcare clients. Wellcare classified almost 60 percent as triage cases and paid only $50 each. The hospital appealed 92 percent of those cases, with a success rate of 16 percent, or 285 patient encounters. Haugh said that amounted to a $334,258 underpayment, plus an estimated $40,000 cost for preparing and prosecuting the appeals.

Haugh said Coventry classified 26.4 percent of its clients' Georgetown ER visits as triage and paid only $50 each. The hospital appealed 94 percent of those and had a success rate of 36 percent, or 366 patient encounters. He estimated an underpayment of $148,000 plus $22,000 in labor for appeals, and said the overall financial impact to the hospital was $543,894.

Wellcare said its appeals process allows three opportunities for review, with at least two independent medical directors.

The state Medicaid program's chief medical officer, Dr. John Langefeld, said the emergency-room problems are not a "straightforward, easy issue," He said many patients go to ERs for reasons beyond medical care. The cabinet has said that some hospitals have relied too much on ER revenues.

Sen. Reginald Thomas, D-Lexington, said rural hospitals need to change their business models and wondered if the bill was an attempt to mask that problem. Meanwhile, he added later, there is "documentation that hospitals have benefited from Medicaid expansion" under the federal Patient Protection and Affordable Care Act, in a recent report from Gov. Steve Beshear.

Adams replied that Beshear says, ""It is great, and it's putting all this money back in the system," but in fact we are not seeing it on the provider level."

Alvarado said, "There is a difference between what actually happens and what the governor's office wants to show you. So when you have KentuckyOne [Health] coming out publicly declaring a $218 million dollar loss in one year, that is hardly a profitability for them based on the ACA."

Alvarado said Citibank reported the companies have made $155 million in profits off of Kentucky Medicaid. "I'd get rich, too, if I didn't pay my bills," Alvarado said. "It is an outrage."

Clinton, Beshear, Humana chief and others discuss Medicaid expansion, other changes in health systems, and chronic illness

By Melissa Patrick and Al Cross
Kentucky Health News

The economic advantages from expanding Medicaid under federal health reform should outweigh any ideology that is holding states back from participating in it.

At least that was the consensus of a panel discussion about economics and health care led by former President Bill Clinton on Jan. 27, the last day of the Clinton Foundation's fourth annual Health Matters Activation Summit in Coachella Valley, Calif.

Gov. Steve Beshear, the leadoff panelist, said the Patient Protection and Affordable Care Act is a "transformative tool" to help change the dire health statistics in Kentucky, and while the decision to expand the Medicaid program to people with incomes up to 138 percent of the federal poverty level was "morally the right thing to do," it was economically the right thing to do, too.

Citing figures from a PriceWaterhouse Coopers study that predicted Medicaid expansion would bring money and jobs to Kentucky by expanding health care, he also said it would help create a healthier workforce to compete for jobs and this would give Kentucky an economic advantage over the surrounding states that didn't expand Medicaid.

"We are going to go past them pretty fast, from an economic standpoint," the governor said.

The study Beshear cited is being replicated to give a fresh forecast of the expansion's economic impact now that the state has a year's experience -- a year in which Medicaid enrolled more people than the first study said would enroll by 2020, and two-thirds as many health jobs were created as the predicted number for 2020. Republicans have voiced doubt that the expansion will pay for itself once the state has to pay for part of it: 5 percent in 2017, rising to the law's cap of 10 percent in 2020.

Clinton, a Democrat, said Republican-run states that had used Republican consultants for their Medicaid studies had found that expansion would pay for itself. Laughing, Clinton said the reports weren't well read because they didn't say what the Republicans had wanted them to say, and the consultants replied that "Yes, they were Republicans, but they also believed in arithmetic."

Trevor Fetter, president and CEO of Texas-based Tenet Healthcare, said that as a provider and member of the Texas business community, "It is a big mistake not to expand Medicaid, not to offer this access." He said many in Texas are "trapped" because the state hasn't expanded Medicaid and they make too much to qualify for it and too little to qualify for the federal subsidies for private insurance.

Meredith Rosenthal, professor of health economics and policy at the Harvard School of Public Health, said, "The most compelling argument for those who resist coverage expansion is an economic one," especially because health care is the largest employer in most communities.

The most talkative panelist was Bruce Broussard, president and CEO of Louisville-based insurer Humana Inc. He said expansion "is a good thing" because it allows access to insurance for people as they move or change jobs, decreases the burden of stress on the under-served and will save businesses money because it costs less to take care of healthy people than sick ones.

In discussing the health-care industry's new focus on patient outcomes, Broussard said outcomes will improve as the U.S. shifts from model built around treating episodic conditions to one that treats chronic conditions.

"It's not about the insurance, it's not about the treatment. It's how do we help people stay healthy no matter where they are in their journey," he said to a round of applause.

Experts say rising levels of chronic disease among baby boomers are a major concern. Clinton asked the panel to name the one thing we need to do that isn't being done now to deal with chronic conditions like diabetes.

Broussard said yearly health assessments "would help people make better health decisions." It is important to tell them what their current health is, relative to where it should be. "When people know their numbers, they make more effective decisions," he said.

Rosenthal said, to a room full of applause, "The biggest thing you could do to prevent diabetes in this country is to look at the agriculture policy." Clinton suggested working directly with all of the stakeholders involved in food production and distribution to create change.

The discussion shifted to the role of transparency and interoperability (different systems working together) in health-care finance as a way to improve health outcomes and decrease costs. Michael Peterson, president of the Peter G. Peterson Foundation, said "We are spending 3 trillion dollars a year without any regard to cost or quality."

Broussard said, "I think interoperability will bring transparency, better data analytics and will empower the consumer."

Beshear said Kentucky has already shifted to a pay-for-performance model by switching Medicaid to managed care, in which insurance companies are paid a flat fee per person as an incentive to limit costs.

"We want people to learn how to take care of themselves and to take responsibility for themselves and stay well," he said. "And if we are successful in doing that, we will bend this cost curve."

As for the reform law, Beshear said that while there is still work to do, "We've got to get past this talk of we're going to throw the whole baby out with the bath water" and make it work.

"The ACA is not going anywhere as far as I'm concerned," he said. "It is going to stay and we are going to implement it and we are going to better the lives of our people."

Foundation for a Healthy Kentucky lists 2014 grants

The Foundation for a Healthy Kentucky has provided more than $1.3 million in 2014 for community programs, polling and policy initiatives to not only advise policymakers but also advocate for better health and health care across the state.

"Our strategies to address the unmet health care needs of Kentuckians are built on investment at the local and state levels," Susan Zepeda, president and CEO of the foundation, said in a news release.

The foundation said it donated $125,000 to Kentucky Voices for Health, a coalition of lobbying groups that support health reform; $50,000 to Kentucky Youth Advocates, an organization dedicated to the improvement of public policies that influence the lives of children and families and $60,000 to the University of Cincinnati for the 2013 Kentucky Health Issues Poll.

As part of a 2012-17 strategic plan to help school-aged children grow up to be healthier than their parents, the foundation provided three grantees money to set in motion the business plans they developed. Recipients included: Clinton County School District ($158,361), Fitness for Life Around Grant County ($182,033) and Louisville Metro Department of Public Health and Wellness ($161,850). The foundation also funds a multi-year study of Kentucky's transition to managed-vcare Medicaid.

The foundation matched a $3 million federal investment to begin nurse-managed clinics, telemedicine, mobile health services, care navigation and and an activities center. These projects "have improved the quality of life for more than 20,000 Kentuckians and provided training for more than 250 providers," according to the release.

To support the improvement of health literacy in Kentucky, the foundation invested $100,000 in health programming on KET, and $25,000 with the Institute for Rural Journalism and Community Issues at the University of Kentucky , mainly for the publication of Kentucky Health News.

Hospitals, plagued by bad debt, ask or even require patients with high-deductible insurance plans to pay in advance

Irene Qdemat of Baptist Health enters
patient data. (C-J photo by Alton Strupp)

Kentucky hospitals are so plagued by bad debts that they are asking some patients to pay in advance, Grace Schneider reports for The Courier-Journal.

"We always encourage them to try to pay something in advance" if they have an insurance policy with a large dedictible, said Donna Ghobadi, assistant vice president of managed care and revenue cycle for Baptist Health, which includes seven hospitals. Still, "We won't turn anybody away."

Schneider notes that Americans "have been shifted to high-deductible health care plans that require the employee to spend thousands of dollars on doctors and prescriptions before insurance kicks in. Estimates are that such plans covered one in nearly five Americans this year, a sharp increase from one in 25 in 2006, according to the Kaiser Family Foundation's 2014 Employer Health Benefits Survey."

Also, "Health-care reform also is shifting the burden for patients to come up with cash for their care in many instances," Schneider reports. "Of the 7.3 million people enrolled in federal and state exchanges under the Affordable Care Act this year, roughly a fifth nationwide and in Kentucky selected bronze-tier plans, which carry deductibles exceeding $5,500 per person. Bronze plans lack subsidies that silver and other plans provide to help pay out-of-pocket costs for those who meet income-eligibility thresholds." But many patients don't seem to realize that, hospitals say.

"Meanwhile, there has been an increase in employers offering an additional benefit at annual health-care enrollment of an insurance policy paid by the employee to cover a critical illness and care after an accident, said Jeff Bringardner, vice president of Regional Market Development for Humana," Schneider reports.

Millions of children on Medicaid are missing free check-ups; Kentucky is a little below the national average

Millions of low-income children across the country aren't getting free preventive exams and screenings guaranteed by Medicaid, and some experts say federal and state health officials aren't doing enough to fix the problem, according to a federal watchdog report.

The report from the Department of Health and Human Services’ Office of Inspector General says that while the Obama administration has boosted rates of participation for children getting regular wellness exams, dental checkups and vision and hearing tests, it needs to do more.

The report says that 63 percent of children on Medicaid received at least one medical screening in 2013, up from 56 percent in 2006, but most states are still falling short of the department’s 80 percent goal. Only Iowa and California met that participation rate goal last year.

In Kentucky, 57 percent of the 381,231 children covered by Medicaid who should have received at least one annual screening exam did so. Most states require at least one annual exam, and more frequent exams for infants. The reports shows that Kentucky's rate is better than 20 other states and equal to the rates in North Carolina, Rhode Island and Florida.

Some experts say state officials bear most of the responsibility for the low rates because they run Medicaid, the state-federal program for the poor, reports Phil Galewitz of Kaiser Health News. The OIG reports says the federal administration should be doing more to encourage states to address the problem.

"Child health advocates cite several factors for the low completion rates, including a shortage of doctors treating Medicaid patients, states’ low pay for providers and parents’ lack of awareness about the importance of the visits," writes Galewitz.

Congress introduced the Medicaid benefit, known as the Early and Periodic Screening, Diagnosis and Treatment program in 1967. In Kentucky, the EPSDT benefit includes screenings and special services, according to the Cabinet for Health and Human Services. Preventive care, such as routine physicals or well-child check ups, is provided under the screenings program.

Last year, 514,298 children were eligible for Kentucky’s EPSDT, says the the cabinet's annual participation report. Based on that number and eligibility periods, about 507,000 screenings were expected, but only 391,079 were, for a ratio of 83%. Additionally, the report says 236,830 children received dental services of any kind, with 208,783 receiving preventive services.

Some states require Medicaid health plans to educate members about the EPSDT benefit and what it covers. Others have implemented incentive plans that offer gift certificates for screenings. According to the National Academy for State Health Policy, Kentucky requires Medicaid managed-care organizations to provide an EPSDT coordinator to coordinate case-management services and continuity of care. Click here for more information about EPSDT screenings in Kentucky.

Women leading Ky. Health: With less than 16 months left, Haynes tries to 'bake in' health reform, managed care, more

This is the last in a series of stories about four high-ranking female state officials who have guided the state's embrace of the Patient Protection and Affordable Care Act.

By Melissa Patrick
Kentucky Health News

How does a person create lasting change in an ever-changing political environment? “Bake it in,” says Audrey Tayse Haynes.

Secretary Audrey Haynes

As secretary for the Cabinet for Health and Family Services since 2012, Haynes has led the state's efforts to implement the federal health-reform law, dealt with the controlled chaos that was the transition to managed-care Medicaid and faced controversies in the social-services system. Now, with less than 16 months left in Gov. Steve Beshear's administration, she wants to make big improvements in the state’s behavioral-health system.

“We want to get as much (done) as we can get and we want to get it baked in,” Haynes said, “so hopefully the next person that comes will be as enthusiastic about building on the foundation that we have laid.”

Haynes brought more than 25 years of leadership experience to her job, including appointments under three earlier governors. From 1997 to 2001, she was deputy assistant to President Bill Clinton and director of the Office for Women’s Initiatives and Outreach, then special assistant to Vice President Al Gore and chief of staff for Tipper Gore. For the next decade, she was senior vice president and chief government affairs officer for the YMCA of the USA in Washington, D.C.

  

She says her personal style of leadership – “collaboration, inclusion and transparency” – took her staff a while to get used to, but is paying off with results.

“I’m all about forcing people to work together and trying to figure it out because you get a better product,” she said. “We don’t sign things around here unless it’s been vetted through the agency that it is going to impact. It took a while for people to get used to that.”

At her recommendation, Beshear named Carrie Banahan to run the state insurance exchange, Kynect, which has enrolled 521,000 people and become the nation’s model of how to run a successful exchange.

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“We all collaborate and all work together,” Banahan said in a separate interview. “Audrey has comprised a good team in the cabinet and we support her 100 percent.”

“I couldn’t get a better boss,” Public Health Commissioner Stephanie Mayfield said in a separate interview.  “She is genuinely concerned about not just her employees, but the health of the public.”

Haynes said the expanded access to coverage under health reform will improve the health of Kentuckians and the state's health statistics, something employers consider when choosing sites.

“Kentucky has worked so long and hard on building a better, more educated citizenry, so that we (can) recruit more industry and have a stronger economic development base. I believe that is important,” she said. “But equally as important is that we have healthy employees. … I do believe that our state will see many, many benefits from this.”

Health reform has been the most controversial domestic issue of the last few years, but for many people in the health-care industry, there has been more tooth-gnashing over the managed-care Medicaid system that began several months before Haynes became secretary.

Managed care, in which insurance-company subsidiaries get a certain sum per patient and increase their profits by controlling costs, “has not been a walk in the park to implement,” Haynes acknowledged. Providers have complained about slow payment and rejection of claims, and one managed-care firm left Kentucky, saying the state gave it misleading financial information.

She said all involved had to “stop, take a breath and stop screaming long enough to sit down and honestly work through the problems. . . . We have just forced people to the table month in and month out to work out these issues.”

Haynes began collaboration with providers and managed-care firms, and held public forums for all stakeholders to ask questions and get answers. It recently started a second round of forums, and she says things are much calmer now, almost three years after managed care began.

“Our first series of forums for health providers were so successful in opening the lines of communication and making connections that allow us to work better together,” she said in a press release. “We decided to not only repeat but expand the scope of the forums this year, bringing new topics to the forefront like behavioral health, which is particularly timely due to improved access allowed by the Affordable Care Act.”

The next big frontier in managed care is integrating behavioral health with physical health, she said. Noting that more behavioral-health providers are now eligible to receive Medicaid reimbursements, she said that increases accountability toward better outcomes for such patients.

Haynes has little more than a  year left to “bake it in,” because Beshear cannot seek re-election. She acknowledges that the changes in health care are “turning people’s worlds upside down.”

“There are a lot of changes going on, and they are not going to be able to just move on a dime,” she said. “So we have to be able to push, cajole, be patient, teach and then repeat all of that constantly.”

Daytime mental-health programs shrink, citing problems with managed-care Medicaid; pastoral counselors to be licensed

Access to daytime mental-health care "is on a steep decline in Kentucky, leaving what some fear is a gap in care that isolates the mentally ill at home or drives them out into the streets, hospitals or jail," Mike Wynn of The Courier-Journal's Frankfort Bureau reports. The Kentucky Association of Regional Programs, the lobby for community mental-health centers, "reports that 33 of the roughly 50 programs offered across the state have closed in the past 18 months while four others have reduced their hours by half," affecting an estimated 1,000 people.

The state Department for Behavioral Health, Developmental and Intellectual Disabilities says these community mental-health centers should embrace "a shift away from using day programs," Wynn writes, but mental-health advocates "say the centers have struggled to get enough coverage authorized under Kentucky's Medicaid managed-care system to keep the services operating. That has forced programs to close before new services are available to replace them, they argue."

The advocates say that among companies that manage care in Kentucky under Medicaid, Coventry Cares and its subsidiary MHNet "are by far the worst about denying coverage or reducing hours for therapeutic day programs. Coventry and MHNet are owned by insurance provider Aetna," which "says complaints are off target and that it is committed to providing patients with high-quality care. MHNet has approved two-thirds of the requests it received for therapeutic rehabilitation since January 2013, Aetna said in a statement."

Steve Shannon, executive director of the centers' lobbying group, "said that even mild reductions — such as approving services for three days a week rather than five — can wreak havoc on a program's financial viability," Wynn writes. "He also argues that centers may have stopped requesting services once they realized that MHNet would not approve them." (Read more)

Meanwhile, Kentucky has become the sixth state to license pastoral counselors under a new law that will also allow them to be paid for their services. The sponsor of Senate Bill 61, Sen. Alice Forgy Kerr of Lexington, told Jack Brammer of the Lexington Herald-Leader that the counselors must have a master of pastoral counseling degree, in addition to the same qualifications as other licensed counselors, and must also pass a written examination. (Read more)