State signs new Medicaid Managed Care contracts, makes changes to address complaints from providers

In April of this year, the Cabinet for Health and Family Services (CHFS) announced that the state’s Managed Care Organizations (MCOs) would need to rebid for contracts that were set to expire June 30, 2015. It was announced Wednesday that the state has signed new contracts, effective yesterday, with all five existing MCOs-Wellcare, Coventry, Passport, Anthem and Humana.

These MCOs provide healthcare insurance services to all Kentuckians who meet Medicaid requirements. Under Medicaid expansion, an individual can qualify for Medicaid if they may less than $16,000 a year, or $36,000 for a family of four.

Kentucky moved to a managed care system for Medicaid four years ago in an effort to control rising Medicaid costs and improve quality, utilization and health outcomes. CHFS has stated that the move to managed care has resulted in savings to the state at more than $1.3 billion. Currently Medicaid is 25 percent of the state’s budget with over $4.4 billion given to the MCOs.

Though the move to managed care has saved the state money, the implementation has not been seamless. The new contracts are meant to address complaints from providers regarding slow payments, complicated forms and unnecessary denials.

In the press release from CHFS it states that some of the changes to the new contracts include:

• Establishing a standardized contract for all MCOs with the Commonwealth;
• Requiring statewide coverage from all contracted MCOs;
• Mandating that 82-87 percent of member capitation payments to the MCOs must be expended for direct services to Medicaid members;
• Adding an incentive pool for the MCOs to improve health outcomes;
• Requiring the use of national standards designated by the Cabinet to determine “medical necessity;”
• Ensuring the appropriate medical specialists are making “medical necessity” determinations and reviewing cases on behalf of the MCOs;
• CHFS will be reviewing “medical necessity” denials and denials of payment for emergency room use for contract compliance;
• Expanding performance requirements for Medicaid members’ pharmacy benefits;
• Requiring the use of standardized forms for prior-authorization requests, grievances or appeals for members and providers, and claims submittal;
• Using nationally accepted uniform standards for credentialing all health professionals;
• Strengthening requirements for the provision of behavioral health services;
• Developing practical and convenient alternatives to non-emergent emergency room utilization;
• Requiring timely updates by the MCOs to their online provider network information within 10 days of changes being made to the network;
• Requiring MCOs to serve persons with Severe Mental Illness (SMI) as persons with special needs; and
• Increasing penalties for non-conformance with contract requirements.