Our Kentucky auditor is weighing in on the Beshear Administration’s broken Medicaid managed care system.

Kentucky switched to Medicaid managed care from fees for services effective last November 1, and nothing has worked since then.

Patients haven’t gotten treatment, health care providers haven’t gotten paid and at least one of the providers has lost tens of thousand of members, threatening to wipe out the $375 million in savings Beshear promised the change would produce.

Not suprisingly, Adam Edelen’s solution is to add a whole ‘nother layer of bureaucracy, as we say in Kentucky.

In his office.

And Edelen has had his staffers write a crackin’ news release to celebrate his genius, calling his 10-point plan “common-sense proposals” to immeadiately fix the problem!

Presto! His big recommendation – all parties should use better technology. (Reschedule that surgery while they run out and get all new hardware and IT software four months into the game. And where was Adam all those months ago when the wheels were coming off? Probably on the phone with Jake.)

Anywho, Crit Luallen’s successor has created an office to “monitor the longterm effectiveness of the program that provides health care to more than 700,000 Kentuckians.”

If there is one bit of wisdom in this release, it’s the acknowledgement that Passport Health Care, which oversees Jefferson County and the surrounding 17 counties, is not part of the problem. Oddly, Passport is the only managed care provider Edelen mentions by name.

So for the record, it’s Tampa, Fla.-based WellCare, St. Louis-based Centene Corp. and Coventry Health Care, based in Bethesda, Md.

The language in the release, by the way, makes it sound like someone is thinking about running for governor someday:

“The three new MCOS are sitting on more than a quarter of a billion taxpayer dollars while small-town doctors, hospitals and other health care providers have had to open or extend lines of credit to keep their doors open,” Edelen said. “That’s unacceptable.”

It also focuses criticism not on Beshear, who rushed the transition, but to the Cabinet for Heath and Family Services. The Cabinet (not the humans who make it up) didn’t learn “the difficult lessons of the transition to Passport 14 years ago, and was ill prepared to monitor and enforce its contracts with the new MCOs, Edelen said.

So, how many staffers are at CHFS from 14 years ago? And how many experts told Beshear it was a stupid idea to try to institute the changeover in months when it has taken other state such as Georgia years to get the system to work properly?

 Get ’em, tiger.
See, it’s stuff like this that makes us sleep soundly at night knowing Frankfort, Kentucky is a town full of heroes.

FRANKFORT, Ky. (Feb. 29, 2012) – Auditor Adam Edelen on Wednesday issued 10 common-

sense proposals aimed at providing immediate fixes to the state’s new Medicaid managed care

system and announced the creation of a unit in his office to monitor the long­term effectiveness

of the program that provides health care to more than 700,000 Kentuckians.


On Feb. 3, Edelen requested information from the state’s managed care organizations (MCOS)

after hearing Widespread complaints from health care providers and patients that claims for

reimbursement were not being paid in a timely manner and treatment was being delayed or



“The three new MCOS are sitting on more than a quarter of a billion taxpayer dollars while

small-town doctors, hospitals and other health care providers have had to open or extend lines of

credit to keep their doors open,” Edelen said. “That’s unacceptable.”


The MCOS have received $708 million from taxpayers while paying out just $42 million to

providers as of Feb. 15, Edelen said.


The review was a preliminary analysis of information provided by the and not an official

financial audit.


The Cabinet for Health and Family Services on Nov. l transitioned 560,000 individuals to three

MCOS to save an estimated $1.3 billion in taxpayer funds over the next three years. A fourth

MCO – Passport Health Plan – already provided health care to more than 170,000 individuals in

the Louisville metro area and surrounding counties and was not the target of the majority of



“Managed care is the right approach for Kentucky, provided it’s done right,” Edelen said.

“Squaring the deal for taxpayers, providers and patients is the primary focus of the involvement

of my office in this important issue.”


An initial review of information shows that the Cabinet failed to learn the lessons of the difficult

transition to Passport 14 years ago and was ill ­prepared to monitor and enforce its contracts with

the new MCOS, Edelen said.


Those organizations, in turn, did not appear to have adequate systems, staffmg or

communications in place despite assurances they were ready to launch the program last fall.

And to a lesser extent, Kentucky’s health care providers and their third-party billing

organizations were not prepared to properly bill MCOS for services provided.


To maintain a future focus, Edelen said his office has made 10 preliminary recommendations to

improve the current system as a prelude to an expansive review to be conducted later in the year.

Edelen has shared the recommendations with the Cabinet and MCOS for their consideration.

The recommendations are as follows:

l. The Cabinet, and provider community should develop an agreed-upon metric for

measuring and reporting the timeliness of provider reimbursements and implement action

plans to resolve identified deficiencies in a timely manner.

2. The Cabinet should better monitor and enforce the governing MCO contracts, specifically

as they relate to the timeliness of billing.

3. MCOS and pharmacy benefit managers (PBMS) should use secure, modern technology to

process pre-authorizations and reimbursement claims and transmit information to

providers and pharmacists.

4. MCOS should train providers and their billing agents to use the automated systems in

place to track the submission of claims and their status in real time; providers and

pharmacists should utilize those systems to verify claims’ status, correct errors, reduce

duplicate claim submissions and speed the payment process.

5. Each MCO should adjust staffing as needed to clear existing backlogs in claims and pre~

authorizations and ensure that processing of claims and pre-authorizations adheres to the

time frames in the contracts.

6. MCOS and PBMS should better communicate to providers and pharmacists the process

for appealing denied claims and, related to specific prescription costs, the process for

appealing the maximum allowable cost and dispensing fees.

7. MCOS and PB’s should streamline and expedite the appeal process to reduce the risks to

the health and safety of patients.

8. MCOS and PBMS should more diligently review claims to ensure relevant patient

information is considered before making final decisions and provide detailed

explanations when claims are denied.

9. The Cabinet should study Whether behavioral health patients and others who receive

specialized medical services would be better served under the Medicaid fee-for-service

structure administered by the Cabinet.

10. MCOS and PBMS should streamline the process for a more timely execution of pre~


In addition to the recommendations, Edelen said he is shifting existing resources Within the

auditor’s office to establish a Medicaid Accountability and Transparency Unit. The cross-

departmental effort will focus on making the state’s Medicaid system more effective, efficient

and honest.

“It appears to be the first time in the history of the auditor’s office that a unit has been created to

monitor a specific area of state government,” Edelen said. “There are more people on Medicaid

than there are children in our public schools and it is the second-largest expenditure of our

government. We can outsource the functions of Medicaid, but We cannot outsource the


Edelen said he recognizes MCOS are taking steps to improve the managed care system and

appreciates their cooperation in his requests for information.

“All parties involved in managed care, from the state to providers and their billing agents to

MCOS, must Work together to provide our most vulnerable with a reliable health care system that

is fair and accountable to taxpayers,” he said.