Rushed transition to managed care is cautionary tale for other states, especially those with large rural populations

Since Kentucky's abrupt change to a Medicaid managed-care system in 2011, problems have been widespread among patients and providers, highlighting the dangers for other states, and especially rural ones, about a rushed transition to this model without sufficient preparation or oversight. Such problems could spread as Kentucky and some other states expand Medicaid under Obamacare.

“The Kentucky case is a harbinger of what can happen when states don’t allow enough time and devote sufficient resources to strengthen the Medicaid agency’s oversight capacity and systems — or develop strong contracts and care-monitoring systems from scratch if they haven’t contracted with managed care plans before,” Debra Lipson, a senior researcher at Mathematica Policy Research, told Jenni Bergal of Kaiser Health News, writing for The Washington Post.

Kaden Stone and mother, Angelina Alcott (Photo by Julie Bergal)
Patients in Kentucky's managed-care system complain of being denied treatment or having to drive long distances to find doctor's within their plans network. That's especially true of people in rural areas, such as Darlene VanHoeve in southeastern Kentucky, Bergal writes. VanHoeve has a son who needs treatment for autism at a center an hour away, but managed-care firm WellCare of Kentucky wouldn't pay for these services despite a physician's order, saying the center wasn’t in its network. In Greensburg, 8-year-old Kaden Stone loves playing baseball and riding his bike, but as a result of congenital bowel problems that have required dozens of surgeries and procedures, he needs PediaSure, his mother told Bergal. Yet, managed-care firm Coventry Cares stopped paying for it last fall, saying it was not “medically necessary.”

Hospitals and doctors have continuously voiced complaints about denied or delayed payments from managed care companies. Kentucky health officials admit there have been problems related to the speedy switch to managed care in 2011, writes Bergal, but they insist that claims are now being paid promptly. They also insist that providers meet with managed-care companies to claim outstanding payments and that care quality has improved in the state.

Advocates for the mentally ill argue that the care system for them has deteriorated, saying plans have denied patients' long-standing prescriptions, forcing some community mental health centers to limit or cancel programs, says Bergal. “The whole thing has been a mess,” Sheila Schuster, executive director of the Kentucky Mental Health Coalition, told Bergal.

As Medicaid rolls expand, those already in the program could be shut out of some of the key preventive services included in the new health law, says a recent study published in Health Affairs.

States that have phased in managed care more slowly have been more successful, so Kentucky's story is a cautionary tale for other states. “It was a significant challenge,” Michael Murphy, chief executive of Aetna-owned Coventry Cares, told Bergal. “Obviously, we learned a few lessons in Kentucky.” Perhaps this tale will keep other states from having to learn lessons too.

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