Princess Health and Bevin gets bill to create third-party appeals process for denied Medicaid claims, which sponsor says are all too common. Princessiccia

Princess Health and Bevin gets bill to create third-party appeals process for denied Medicaid claims, which sponsor says are all too common. Princessiccia

behavioral health doctors General Assembly health insurance hospitals insurance legislation legislature Medicaid physicians

Gusty 16:05 Add Comment

By Melissa Patrick
Kentucky Health News

A bill to create an independent process for Kentucky health-care providers to appeal claims denied by Medicaid managed-care organizations is on its way to the governor's desk for his signature.

Sen. Ralph Alvarado

The only appeals process for providers now is through the MCOs themselves, and the only recourse for denied claims is through the courts.

"We are looking at almost 20 percent of the claims that are out there through Medicaid being denied to providers," the bill's sponsor, Republican Sen. Ralph Alvarado of Winchester, told Kentucky Health News. "So with that there are millions of dollars that all of those providers are losing out on. This finally gives them an opportunity to keep the MCOs accountable."

WellCare of Kentucky, one of the MCOs Alvarado targeted last year while trying to get a similar bill passed, denied that it has so many disputed claims, but says it will work with the Cabinet for Health and Family Services if Senate Bill 20 is enacted.

"WellCare of Kentucky rarely disputes claims for medical necessity, with only 1 percent of claims being denied for this reason," spokesperson Charles Talbert said in an e-mail. "We are supportive of initiatives that help to ensure our members get the right care, at the right time, in the right setting."

Another MCO that Alvarado targeted last year as having a high rate of denied claims, Aetna Better Health of Kentucky, formerly CoventryCares, said in an e-mail, "We work tirelessly, along with our network of providers to improve access to and quality of care for our Medicaid members and we are committed to continuing these valuable collaborations."

CareSource, another MCO, declined to comment.

Kentucky implemented managed care in 2011 mainly as a way to save money. In managed care, an MCO gets a lump sum per patient, a system that encourages them to limit payments to providers. Providers have complained about denied claims and slow payments, causing some to suggest that managed care creates an incentive to deny care.

"Kentucky Medicaid MCOs have a denial rate that is four times the national average," Alvarado said in an e-mail. "These MCOs, in general, are garnering massive profits on the backs of our providers by simply not paying for services; and then claiming that they are 'managing care'."

MCOs serve about 1.1 million Kentuckians and account for about 69 percent of the state's Medicaid budget, according to a state news release.

Last year the state renegotiated all MCO contracts in hopes of decreasing the number of disputes over rejected claims, but health-care providers told the Senate Health and Welfare Committee Jan. 13 that this is still an ongoing problem, especially with behavioral health.

Nina Eisner, CEO of The Ridge Behavioral Health Systems, told the committee that there are examples all over the state of patients with homicidal thoughts unable to get their care paid for by MCOs.

Senate Bill 20 says that after providers exhaust an MCO's internal appeals process for denied claims and a final decision has been made, the provider can then seek a third-party review from an administrative hearing tribunal in the cabinet. The appeals process would apply to all contracts or master agreements entered into or renewed on or after July 1, 2016.

Alvarado said the proposed appeals structure is very similar to the one for commercial insurance appeals at the Department of Insurance. He noted that Kentucky's commercial denial rates are around 6 percent, which are close to the national average, and said he hopes this independent appeals process will bring the MCO denial rates more in line with this.

"If we go from 20 percent to 6 percent, I think most providers will accept that," he said. "This is fair. It is fundamentally American to have an appeals process and it is needed."

Alvarado sponsored a similar bill last year, but it died in the House. A similar bill passed both chambers in 2013, but then-Gov. Steve Beshear vetoed it. Alvarado said he is confident Gov. Matt Bevin will sign this year's version.

Alvarado said that once this "fractured relationship between providers and Medicaid" has been mended "it might actually open up the door for more providers to participate with Medicaid."

Sheila Schuster, a Louisville mental-health advocate, agreed, and said that while Medicaid reimbursement rates are "not great," not being paid at all for services rendered is not acceptable and has been a deterrent for providers to participate.

She said the Kentucky Mental Health Coalition and the National Alliance on Mental Illness support SB 20 because "they want providers to be fairly treated and to be able to provide the services that they need."

Princess Health and Republicans accuse Beshear of holding down failed co-op's premiums to make Obamacare look good; he denies the charge. Princessiccia

Princess Health and Republicans accuse Beshear of holding down failed co-op's premiums to make Obamacare look good; he denies the charge. Princessiccia

federal spending General Assembly governor health insurance health reform insurance Kynect legislature Medicaid obamacare Patient Protection and Affordable Care Act politics state government

Gusty 13:09 Add Comment

By Al Cross
Kentucky Health News

Did Kentucky's government-sponsored insurance company fail because then-Gov. Steve Beshear and federal officials kept its rates artificially low to make Beshear's embrace of federal health reform look better?

Sen. Ralph Alvarado

That's what Republican state Sen. Ralph Alvarado of Winchester, using documents provided by Gov. Matt Bevin's office, suggested or claimed March 14 in a Senate floor speech about the Kentucky Health Cooperative.

"It appears that rates for the co-op may have been purposely kept down for the sake of optics, to make the rollout of the ACA in Kentucky appear successful when it clearly was not," Alvarado said, citing "multiple meetings between the co-op, the governor's office and CMS," the federal Centers for Medicare and Medicaid Services, which oversees the state-based co-ops created under the reform law, in the fall of 2014.

"Somewhere along the way rates were kept down despite these actuarial recommendations," which said the money-losing cooperative should increase its rates 35 to 40 percent for the 2015 plan year, Alvarado said. The co-op's average increase, announced in late October 2014, was 15 percent. In November, CMS expanded the co-op's $47 million solvency loan to $125 million "to try to sustain this company," he said.

Beshear denied the charges through a spokeswoman, Hayley Prim. She said in an email, "Rates were set by the co-op, which was a privately run insurance plan. Like all other insurance plans, the rates must be certified by the Department of Insurance and actuarially sound. The state did not hold rates artificially lower to improve optics."

CMS officials encouraged co-ops "to price their plans low and grow as fast as they could," Adam Cancryn reported for SNL Financial in November 2015, in a long article that is widely regarded as the best written about the failure of the co-ops. Twelve of the 23 have closed or plan to.

The insurance co-op's offices are in eastern Jefferson County.

In December 2014, the Kentucky Health Cooperative reported a loss of $50 million, "with several hazardous financial conditions indicated," Alvarado said, but that year its chief executive officer, chief financial officer and member-services vice president got bonuses of $50,000, $40,000 and $40,000 on top of their salaries of $250,000, $179,000 and $131,000.

"This company had no money, was in deficit, and yet funds were being used clearly for bonuses," Alvarado said. Its CFO, Leonard Sherman, left the company in December 2014, according to a document filed by its liquidators.

Joe Smith of Frankfort, who was chair of the cooperative's now-dissolved board, said in an interview that the salaries and bonuses were "probably a little bit less" than typical in the insurance industry. He said bonuses were paid because the co-op enrolled many more customers than expected, but no bonuses were paid after the first year.

Smith blamed "the Republican Congress" for killing the co-op and those in many other states by limiting the "risk corridor" subsidies paid to insurance companies for covering sicker-than-average populations.

He acknowledged that the Obama administration largely abandoned the co-ops, making them "a sacrificial lamb," but he said they could not effectively compete with large insurance companies, mainly because the reform law prohibited them from advertising, as the big insurers wanted. The law created funding for the not-for-profit cooperatives as a way to provide competition with for-profit insurers and hold premiums down.

Janie Miller, who was Beshear's first health secretary, resigned as CEO of the Kentucky Health Cooperative in June 2015. That October, the co-op said it had largely eliminated its losses but would close because it was getting only a $9.7 million of a $77 million risk-corridor subsidy that it needed to stay afloat. It is now in liquidation, supervised by Franklin Circuit Court.

Alvarado said Miller and her successor, Glenn Jennings, refused to appear at a legislative budget subcommittee meeting in November. He said the Insurance Department "gave us very limited answers about what happened, [which] made me wonder if any wrongdoing was involved."

Alvarado said the legislature's Program Review and Investigations Committee should examine the co-op's finances and the Senate should issue a subpoena requiring Miller and Jennings to appear.

Then-Gov. Steve Beshear,
discussing health reform at the
Brookings Institution in D.C.

Prim, Beshear's spokeswoman, said, "While it is unfortunate the co-op did not succeed, an overwhelming majority of Kentuckians have a positive view of Kynect," the online exchange where Kentuckians can buy federally subsidized health-insurance policies. "It has succeeded by providing low-cost health insurance options and creating a competitive marketplace for private insurers that have kept rates low for everyone."

In his speech, Alvarado incorrectly referred to Kynect policies as Medicaid, the federal-state health plan for the poor and disabled. Beshear expanded Medicaid eligibility to Kentuckians in households with incomes up to 138 percent of the federal poverty level.

Alvarado declined to give Kentucky Health News the documents to which he referred in his speech, saying he got them from Bevin's office, which could be asked for them.

Bevin's office provided the liquidators' first report, filed Dec. 31; an actuarial report on small-group plans for 2016, submitted in July 2015; an actuarial report on individual plans for 2015, filed in August 2014; and a February 2015 letter from Miller responding to the Insurance Department's request for a "corrective action plan." None of the documents mention the meetings Alvarado said occurred among CMS, the co-op and the governor's office.

The August 2014 actuarial report said, "The financial viability of KHC is in question. . . . KHC's projections reflect very aggressive assumptions, albeit within a reasonable range, and may result in a very optimistic view of future experience."

The co-op's members used medical services more often than it expected. In the second quarter, there were 263 hospital patient days per 1,000 members, higher than the pricing assumption of 184 per 1,000 but a still a "significant decrease" from the first quarter, for which the report did not give a figure.

The co-op was also having trouble dealing with members and health-care providers. Its corrective plan filed in February 2015 addressed complaints about such things as slow payment standards, paid premiums not being posted to members' accounts, complaints from in-network providers about being processed as out-of-network, and long waits for customer service, with supervisors not being available.

The liquidators' report to the court estimated that the co-op still owes about $80 million in claims, and their financial analysis left unclear whether all those claims would be paid. The balance sheet in the liquidators' statement, dated June 30, said the co-op had $117 million in assets and $128 million in liabilities, and the liabilities included only $67.7 million in unpaid claims. However, the co-op's biggest federal loan, of $125 million, is "subordinate to policyholder obligations, claimant and beneficiary claims, operating expenses and state reserve and solvency requirements," the report said. CMS, the federal agency, has asked an independent actuary to provide its own estimate of unpaid claims.

Princess Health and Bills to preserve Kynect and Medicaid expansion head for votes in Democratic House despite a likely death in Republican Senate. Princessiccia

Princess Health and Bills to preserve Kynect and Medicaid expansion head for votes in Democratic House despite a likely death in Republican Senate. Princessiccia

elections General Assembly health insurance insurance insurance exchange Kynect legislation legislature Medicaid politics

Gusty 18:41 Add Comment

By Melissa Patrick
Kentucky Health News

Bills to continue the Kynect health-insurance exchange and the state's current expansion of the federal-state Medicaid program passed out of the House Health and Welfare Committee March 17, starting a series of legislative votes on health reform that once seemed unlikely.

House Speaker Greg Stumbo said he expects the bills to pass the Democratic-majority chamber, even though Republicans in the fall elections could cast votes as support for "Obamacare," the federal reforms under which then-Gov. Steve Beshear created Kynect and expanded Medicaid.

�There�s never really been a debate on this issue,� Stumbo said. �There�s not been a true letting of the facts, if you will.�

Six days earlier, Senate President Robert Stivers had more or less dared Stumbo to move the bills, whose sponsor had said he did not expect them to pass the Republican-controlled Senate, in order to "have a full, fair debate on the issue" and see where legislators stand on it.

House Bill 5 would require the state to keep operating Kynect, which Gov. Matt Bevin is starting to dismantle or transform. In his campaign, Bevin vowed to abolish the exchange, saying it did nothing that the federal exchange does not. Recently his administration announced that it would continue operating a state-based exchange but use the federal exchange for enrollments.

"They're being pushed into what everyone calls Obamacare, and they don't want that," Stumbo told reporters.

House Bill 6 would keep the current expansion of Medicaid to people with incomes up to 138 percent of the federal poverty level. Bevin is negotiating with federal officials to change the program, saying it will not be sustainable once the state has to start paying part of the cost.

Rep. Darryl Owens

The committee approved the bills along party lines. Their sponsor, Rep. Darryl Owens, D-Louisville, said he filed them because "It is important for people to understand that there are those of us in this legislature that want to continue expanded Medicaid, that want to continue Kynect."

The exchange is paid for by a 1 percent assessment on all insurance policies sold in the state. The fee formerly funded a pool for high-risk insurance, which reform made unecessary. Approximately 1.4 million Kentuckians use Kynect, all but about 100,000 of them on Medicaid.

Kynect was started with federal grants. Rep. Robert Benvenuti, R-Lexington, argued that the state must include that $273 million when considering its cost. "I think most people in this room, most people in Kentucky, pay federal taxes as well, so this whole notion that there is a great federal money tree in which we can go pick off of and build things is just not correct," he said.

Owens replied, "I'm not saying it's a money tree, I'm just saying it's a grant that the federal government gave the states if they wanted to develop their own system," Owens said. "And I think the thing we miss when we talk about that is we have a great system; we have the best system in the country."

Rep. Tim Moore, R-Elizabethtown, whittled the definition of Kynect down to a business that advertises and markets Medicaid and health insurance to Kentuckians, and asked, "How do you spend that kind of money to go out and build a marketplace for soliciting folks to do what would be in their own interest anyway?"

Cara Stewart of the Kentucky Equal Justice Center said the marketing has value because it has created a brand that Kentuckians recognize and trust, allowing them to know where to go to get health insurance. She said Kynect runs seamlessly to help Kentuckians shop and enroll in coverage for both Medicaid and federally subsidized insurance plans, unlike Bevin's approach.

She said later that it now takes two minutes to reach customer service on Kynect and two hours on Benefind, which is operated by the state Department of Community Based Services. "We are radically changing the quality of service to Kentuckians," she said.

Rep. Tim Moore

Moore said he was glad the bills would be voted on because Kynect and the Medicaid expansion had been created through "dictatorship," not "the will of the people." Beshear acted under a state law that requires the government to get as much federal money as possible for Medicaid, and he used his broad executive powers under the state constitution to transform the high-risk pool into Kynect.

Moore said Bevin's election showed public opinion on the issue. However, a poll in November, after the election, showed Kentuckians supported the Medicaid expansion by 3� to 1 and keeping Kynect by 2 to 1.

Democratic Rep. David Watkins, a retired physician from Henderson who voted for both bills, said, "It is kind of sad that our citizens don't pay attention to what our politicians are saying because they do have consequences."

Democratic Rep. Joni Jenkins of Louisville, chair of the House Budget Subcommittee on Human Services, said her panel's hearings convinced her that the state needs to keep it. She said there is value in having one system for Kentuckians to access health insurance, and to have Kynectors, who not only help people access health insurance, but also help them access health services.

Emily Beauregard, executive director for Kentucky Voices For Health, said after the meeting that navigating health insurance is difficult, especially for those who have never had it. "We need to help connect people to a source of care and help them understand how to use their benefits and that's what we've been able to do through Kynect," she said. "Coverage alone is not going to solve Kentucky's health issues."

Benvenuti said after the meeting, "There are various ways to get people to health care and creating a huge governmental system that is duplicative of the federal system is simply not the best use of our dollars."

As for Medicaid, Benvenuti said, "We've got to create a system where everybody who gets health care through an expansion population, or however you want to define it, has skin in the game and is responsible ultimately for their own health care."

Princess Health and Hard-fought bill to protect independent pharmacies passes Senate committee; would regulate pharmacy benefit managers. Princessiccia

Princess Health and Hard-fought bill to protect independent pharmacies passes Senate committee; would regulate pharmacy benefit managers. Princessiccia

business General Assembly insurance legislation legislature managed care Medicaid pharmacies state government

Gusty 08:32 Add Comment

By Melissa Patrick
Kentucky Health News

Update March 28: SB 117 passed the Senate March 14 with a 38-0 vote and passed the House March 25 with a 97-0 vote. It now awaits the signature of the governor.

Approval of Senate Bill 117 by the Senate Appropriations and Revenue Committee March 11 brought Kentucky's independent pharmacies one step closer to getting better price transparency from the companies that negotiate with pharmaceutical manufacturers, insurance companies and their beneficiaries. The bill would subject pharmacy benefit managers to regulation by the state Department of Insurance.

Republican Sen. Max Wise

"We are talking about independent pharmacies that have had family histories for years," Sen. Max Wise, sponsor of the bill, said in an interview. "They are trying to compete just to stay alive and . . . are suffering right now. This is a fight for the little guy and I am happy to stand up with the independent pharmacies."

Wise, a freshman Republican from Campbellsville, told the committee that while pharmacy benefit managers still don't support his bill, they did come to the table over the last week with independent-pharmacy representatives and the state Cabinet for Health and Family Services to reach a compromise that the committee approved unanimously.

The legislation would allow the Insurance Department to regulate PBMs much like insurance companies are regulated. It would also provide an appeal mechanism to resolve pricing disputes between pharmacies and PBMs.

The bill would not require PBMs to change how they work with fee-for-service Medicaid, nor does it require them to release their pricing methodology unless absolutely necessary, and any releases would not be subject to the state open-records law.

The bill was intensely debated for weeks, first in the Senate Health and Welfare Committee and then heard twice in the A&R Committee. Last week's A&R meeting involved "several hours of testimony from a local pharmacist, PBM representatives, and members of the Cabinet for Health and Family Services," the Kentucky Independent Pharmacist Alliance said in a news release.

Wise, a former FBI agent who was elected in 2014, told the committee, "This has been a very tough and complicated bill to work on."

The legislature passed a "maximum allowable cost" law in 2013 to require increased transparency in reimbursement practices. "Kentucky is one of only a handful of states to regulate the actions of PBMs," said the independent pharmacists' release. It said the state has more than 500 independent pharmacists.

Princess Health and Bluegrass Family Health changes name to Baptist Health Plan.Princessiccia

Princess Health and Bluegrass Family Health changes name to Baptist Health Plan.Princessiccia

hospitals insurance

Gusty 06:57 Add Comment

Bluegrass Family Health, the insurance arm of Baptist Health, is changing its name to Baptist Health Plan.

This change will make the Lexington-based health insurance carrier, which has offered insurance through area employers for more than 20 years, be more readily identified with its parent organization, which is based in Louisville, a news release said. It will take a few months for the name transition to be completed.

�As health care continues to evolve, it�s important to bring together the different parts of the Baptist Health system so everyone knows our entire organization is working toward the same goals of improving the health of our communities,� Baptist CEO Stephen C. Hanson said.

Bluegrass Family Health has nearly 80,000 members in Kentucky and parts of adjoining states.

�We look forward to continuing to expand our insurance business, bringing our products and services to both existing and new markets in Kentucky, Indiana, Ohio, Illinois, West Virginia and Tennessee,� James Fritz, president of the plan, said in the release.

Princess Health andAs tax deadline nears, most uninsured appear likely to choose penalty; some with coverage are having to refund part of subsidy.Princessiccia

Princess Health andAs tax deadline nears, most uninsured appear likely to choose penalty; some with coverage are having to refund part of subsidy.Princessiccia

health insurance health reform income insurance insurance coverage obamacare taxes

Gusty 09:16 Add Comment

Kentucky Health News

Most people facing a tax penalty for not having health insurance appear likely to pay it instead of taking advantage of a special opportunity to but coverage and minimize the penalty.

"Major tax-preparation firms say many customers are paying the penalty and not getting health insurance," reports Stephanie Armour of The Wall Street Journal. "Research also suggests that many people who lack health insurance will pay the penalty and not get covered this year."

Many polls have found that many if not most people without health insurance are unaware that they are subject to a tax penalty under the federal health-reform law. That percentage appears to be declining as they prepare their income-tax returns, but a poll taken in late February found that when told of the penalty, only 12 percent of the uninsured said they would get coverage.

For many people, the choice is simply financial, since coverage for them would be more expensive than the penalty -- 1 percent of their income, or $95 per adult or $47.50 per child, whichever is larger. Others say they don't need coverage, and some object to the penalty or the law altogether.

The penalty will increase to 2 percent of income and $325 per adult or $167.50 per child for the 2015 tax year, so if you are uninsured and don't qualify for Medicaid or one of the law's exemptions, the end of the special enrollment period, April 30, is the last chance to avoid that penalty.

"In late February, H & R Block reported that its uninsured clients had paid an average penalty of $172," reports Abby Goodnough of The New York Times. "The money comes out of refunds, while people who do not get refunds are required to pay the Internal Revenue Service by April 15."

Some people who have coverage "might find another unpleasant surprise: As many as half the nearly 7 million Americans who got subsidies to offset their premiums may have to refund money to the government, according to an estimate by H & R Block," the Journal reports. "The subsidies are based on consumers� own projections of their 2014 income, but some estimated incorrectly and received overly generous credits. Those people will see smaller-than-expected refunds or could owe the government money."

"H & R Block also found that as of Feb. 24, just over half of its clients with subsidized marketplace coverage had to repay a portion of their subsidy because their 2014 income turned out to be higher than what they estimated when they applied for coverage," the Times reports. "The process includes "new forms that even seasoned preparers are finding confusing."

The Obama administration announced last month that 800,000 people with insurance bought under the reform law had received incorrect information needed for their tax returns. About 10 percent of them have still not received corrected forms, it announced Friday. "The administration said people who have not received the corrected forms do not have to wait to file their taxes and will not have to pay any additional tax due to the effort," The Hill reports.

The Wall Street Journal reports, "Consumers who already filed their tax returns using the incorrect forms provided though state or federal exchanges won�t be required to file amended forms, and the Internal Revenue Service won�t assess additional taxes, said Mark Mazur, the Treasury Department�s assistant secretary for tax policy."

Princess Health and Princess Health andKentuckians who ran into problems signing up for insurance on state website get a second chance through April 11.Princessiccia

Princess Health and Princess Health andKentuckians who ran into problems signing up for insurance on state website get a second chance through April 11.Princessiccia

Affordable Care Act health insurance insurance insurance exchange Medicaid Patient Protection and Affordable Care Act state government

Gusty 14:26 Add Comment

Kentuckians who had trouble starting or completing their application during the open enrollment period can still apply for subsidies and purchase health coverage at Kynect.ky.gov through midnight April 11.

This applies only to those who completed their applications by March 31. All individuals must select a plan by midnight April 15, with coverage beginning May 1, according to a state press release.

�This will be the last chance for most people to sign up for private health plans and possibly receive discounts until the fall open enrollment period,� Carrie Banahan, executive director of Kynect, said in the release. �We strongly encourage those who still need to select a plan to do so as soon as possible. Those who have started applications should work to complete them quickly too, to reduce possible wait times toward the end of the grace period.�

To sign up during the special enrollment period, you will be asked to attest that you attempted to complete an application by March 31, and had problems doing so. When you connect to the Kynect website, there will be a button to select when the special enrollment screen comes up.

Kentuckians who need assistance can also contact the Kynect call center at 1-855-4kynect weekdays from 7 a.m. to midnight Eastern time or from 8 a.m. to 4:30 p.m. Eastern time Saturday and Sunday. They can also search at Kynect.ky.gov to find a Kynector or insurance agent who can assist them with enrollment, or visit a local Department for Community Based Services office.

Individuals who qualify for Medicaid can apply at any time. But only those who experience a qualifying event, such as the loss of employer-sponsored health insurance coverage, will be able to purchase private health plans.

The next open enrollment period begins Nov. 15, 2014.

More than 370,000 Kentuckians have enrolled in new health coverage through Hynect between Oct. 1 and March 31. This is more than 1 out of every 12 Kentuckians, or 8.6 percent of the state�s population, according to the release.