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.