Kentucky Governor Vetoes Health Care Bill, Guarantees New Plan

FRANKFORT, Ky. — On March 25, the Kentucky Senate unanimously passed House Bill 5, which would require the Department of Insurance to set up a process for payment disputes between medical providers and Medicaid managed health care organizations. However, Gov. Steve Beshear vetoed the bill last week.

House Speaker Greg Stumbo sponsored the bill, with support from the Kentucky Hospital Association (KHA), in hope of improving the misunderstandings regarding Medicaid managed care and require private, out-of-state managed care organizations (MCOs) to pay the millions of dollars that they currently owe Kentucky hospitals for treatment given to Medicaid patients. The organization’s concerns were also echoed in the annual audit for the Kentucky government, which was released in early March. The state auditor, too, said that there needed to be better processes when it comes to the payments of Medicaid managed care.

“This is a significant issue for a number of our members,” said KHA President Michael
Rust in a statement. “Managed care organizations continue to deny payments to providers for services they have already provided to Medicaid patients placing a heavy financial burden on hospitals.”

MCOs and the Cabinet for Health and Family services did not favor the bill, voicing their concerns as well.

After vetoing the bill, the Governor pledged to implement a strategy for MCOs to reconcile what they owe to providers and for the Department of Insurance to conduct targeted audits of the MCOs. Rust indicated that if Beshear’s plan is successful, it is a step in the right direction, according to a statement.

Another decision that Beshear faces: the expansion of Medicaid coverage, which several state legislatures are considering after the Supreme Court allowed states to opt out of the Affordable Care Act’s Medicaid expansion. A report released in early March by organizations Kentucky Voices for Health and Families USA said the expansion would create 14,700 jobs and add $1.7 billion to Kentucky’s economy by 2016. Through 2022, Medicaid expansion would save the state up to $51 million in uncompensated care costs in which the state pays for uninsured people that can’t cover medical visits. The expansion would give about 399,000 Kentuckians affordable health care under an expanded Medicaid program.

“As a low-income state and a state confronted with profound health challenges, Kentucky cannot afford to pass up this historic opportunity to expand health coverage for its residents,” Regan Hunt, executive director of Kentucky Voices for Health, said in a statement. “Expanding Medicaid in Kentucky will also provide additional resources for local health care providers such as physicians, hospitals, pharmacies, home health agencies, and nursing homes. This means that more Kentuckians will have better access to quality care.”

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