Much of the country is reveling in the changes affecting doctors and patients due to the Affordable Care Act, commonly referred to as “Obamacare.” However, many Kentucky hospitals and doctors — and consequently their patients — are struggling with changes made in the Medicaid system before Obamacare was approved.
“It’s the biggest story in the state that’s not being told,” said Vicki Darnell, president and CEO of Ephraim McDowell Regional Medical Center.
While Darnell stresses the medical center is doing just fine, there are many others in the state who are not.
Medicaid coverage is determined by individual states, often calculated in relation to the Federal Poverty Level. Additionally, there are certain federal guidelines states must follow is dispersing the federal and state monies.
There are 5,052 Medicaid recipients in Boyle County; 4,474 in Casey County; 3,220 in Garrard County; 6,205 in Lincoln; and 3,675 in Mercer County. A total of 22,626 people are receiving Medicaid benefits across the five counties, according to a July 2012 report from the Cabinet for Health and Family Services.
As of Nov. 1, 2011, Medicaid in Kentucky went to a managed care program, essentially outsourcing Medicaid, or commercializing it, as Commonwealth Cancer Center Practice Administrator Mark Allen said.
There are three providers statewide, referred to as managed care organizations or MCOs: Coventry Cares of Kentucky, Kentucky Spirit and WellCare of Kentucky.
Louisville and the surrounding area had already participated for several years in an MCO system successfully, through Passport, which is still available.
Since being implemented, the MCO system has met sharp criticism from doctors statewide. According to Bill Snapp, chief financial officer at Ephraim McDowell Regional Medical Center, prior to the implementation of MCOs, doctors and hospitals were getting paid in 17 to 20 days. Immediately after the shift, it took as long as 70 days before payment. As of early December, the delay was between 40 and 45 days, Snapp said. The time for payment has doubled since the MCOs began operating statewide about a year ago.
“You build your business around a particular structure and that changes — it has an impact,” said Dr. Rick Hempel, vice president of medical affairs at the hospital and a private physician at Family Medicine Clinic of Danville.
Hempel explained that some private physicians are having to make hard financial decisions because of the delays and because, in many cases, the MCOs are reimbursing doctors at a significantly lower rate than private insurers.
Darnell, Snapp and Hempel referenced hospitals and physicians around the commonwealth that have been forced to lay off staff and noted that some physicians are refusing to see Medicaid patients because they can’t afford to.
The Physician’s Network, a group of independent physicians in Kentucky, announced in December that it will no longer contract with Coventry Cares, citing the company’s low reimbursement rates as the reason.
Coventry Cares has also made waves with many doctors and hospitals because it cancelled contracts with Appalachian Regional Healthcare, a network of hospitals in eastern Kentucky.
Contracts have taken the place of medicine, in some cases, forcing patients to find doctors or hospitals where their chosen MCO will be accepted. While hospitals cannot deny treatment based on insurance, it can become more expensive out-of-pocket for the patient.
“Something the patients need to know is that they may have chosen one of the MCOs that does not contract with the local hospitals. That’s something that is new,” said Allen. The changes mean that some primary physicians with established relationships with Commonwealth Cancer Center Practice may no longer be available, and patients might be shifted to another physician.
Another major issue local medical professionals have seen with the MCOs is the denial of treatments.
“An example might be that a very high-cost new drug being released and approved by the FDA wouldn’t be approved by the MCOs for six months or greater,”Allen said. “A patient can’t always wait six to eight months for a new medication.”
Erin Wilcher, Commonwealth Cancer Center Practice’s director of finance and quality assurance, added that it sometimes goes beyond new drugs to include those that a patient might currently be prescribed.
“You’re mid-treatment with a patient, having to make a new decision in treatment for that patient based on that MCO’s approval process,” Wilcher said.
For Allen, who is also an oncology certified nurse, this has been one of the biggest issues they have struggled with at the center.
“One of the big things with a medical practice, all physicians can say is that they’ll treat a patient regardless of their insurance. We look at any patient blindly,” he said. “For a practice that treats every patient the same to be told to treat a patient differently by a carrier is a huge problem. In fact, I think it’s borderline unethical.”
Some patients have been forced to cover the costs of their own medications or find an alternative in the middle of their chemotherapy and recovery processes, Allen and Wilcher said.
In October, Kentucky Spirit announced plans to terminate its Medicaid managed care contract with Kentucky. The termination will become effective by July 5, 2013. In a press release, the company stated that there have been concerns since the beginning regarding “sustainability of the commonwealth’s Medicaid managed care program.”
Companies have alleged they were misinformed by the commonwealth when they began bidding to be an MCO in the state. In a lawsuit filed by Kentucky Spirit in October, the company stated Gov. Steve Beshear rushed the privatization option in early 2011, causing the data to be incorrect and their cost estimates to be incorrect.
This may have been a problem not only for the companies but for the patients as well.
Wilcher explained that there is a great deal of confusion for patients during the transition to MCOs simply because the information regarding the individual MCOs wasn’t readily available. There even seemed to be confusion among the MCOs about what was to be offered, she said.
“One big barrier we had was obtaining the information about what was covered and what was not covered. Unfortunately, the MCOs themselves were not clear on the information,” Wilcher said, adding that some patients blindly chose their MCO simply so they would be covered.
Wilcher said that while the privatization of Medicaid is good in theory, the flawed system developed in Kentucky has added to an already enormous strain. She said it’s best described as a “work-in-progress.”
“Their ultimate goal to save the state money was great, to institute new guidelines so that there is a better coordination of care for the patient,” she said. “The problem is they did not have that internal coordination to make that greater goal work.”