New Medicaid Managers Hit In Auditor’s Report

Adam Edelen made ten recommendations to improve Kentucky’s Medicaid managed care system this morning.

“The three new MCOs are sitting on more than a quarter of a billion taxpayer dollars while small-town doctors, hospitals and other health care providers have had to open or extend lines of credit to keep their doors open,” Edelen said. “That requires an explanation.”

The organizations have received $708 million in taxpayer funds but have only paid out $420 million (as of February 15).

Here are Edelen’s recommendations:

  1. The Cabinet, MCOs and provider community should develop an agreed-upon metric for measuring and reporting the timeliness of provider reimbursements and implement action plans to resolve identified deficiencies in a timely manner.
  2. The Cabinet should better monitor and enforce the governing MCO contracts, specifically as they relate to the timeliness of billing.
  3. MCOs and pharmacy benefit managers (PBMs) should use secure, modern technology to process pre-authorizations and reimbursement claims and transmit information to providers and pharmacists.
  4. MCOs should train providers and their billing agents to use the automated systems in place to track the submission of claims and their status in real time; providers and pharmacists should utilize those systems to verify claims’ status, correct errors, reduce duplicate claim submissions and speed the payment process.
  5. Each MCO should adjust staffing as needed to clear existing backlogs in claims and pre-authorizations and ensure that processing of claims and pre-authorizations adheres to the time frames in the contracts.
  6. MCOs and PBMs should better communicate to providers and pharmacists the process for appealing denied claims and, related to specific prescription costs, the process for appealing the maximum allowable cost and dispensing fees.
  7. MCOs and PBMs should streamline and expedite the appeal process to reduce the risks to the health and safety of patients.
  8. MCOs and PBMs should more diligently review claims to ensure relevant patient information is considered before making final decisions and provide detailed explanations when claims are denied.
  9. The Cabinet should study whether behavioral health patients and others who receive specialized medical services would be better served under the Medicaid fee-for-service structure administered by the Cabinet.
  10. MCOs and PBMs should streamline the process for a more timely execution of pre-authorizations.

From a release:

An initial review of information shows that the Cabinet failed to learn the lessons of the difficult transition to Passport 14 years ago and was ill-prepared to monitor and enforce its contracts with the new MCOs, Edelen said.

Those organizations, in turn, did not appear to have adequate systems, staffing or communications in place despite assurances they were ready to launch the program last fall.

And to a lesser extent, Kentucky’s health care providers and their third-party billing organizations were not prepared to properly bill MCOs for services provided.

Click here (Warning: PDF Link) to review Edelen’s complete letter of recommendations.

Yep, yet another damning day for the Cabinet for Health and Family Services within the Beshear Administration.

You can be this will be covered up with some sort of legislative announcement or press conference.

2 thoughts on “New Medicaid Managers Hit In Auditor’s Report

  1. This is a sorely needed report. But, from what I’m hearing, this should be the first in a series of reports that shine light on the problems of this (failing?) experiment.

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