Senate committee passes bill to cut down on number of managed care organizations

Paper with Medicaid and stethoscope. Medical insurance concept.

A bill seeking to cut down on administrative issues for health care providers when it comes to Medicaid and Medicare cleared its first legislative hurdle when it passed through the Senate Health and Welfare Committee on Wednesday.

Senate Bill 30, sponsored by Sen. Stephen Meredith, would reduce the number of contracts between managed care organizations (MCOs) and the state from five down to three. MCOs provide coverage to Medicaid recipients by processing claims and providing prior authorization, among other services.

Sen. Meredith said the state has seen many rural hospitals struggle and/or shut down because of the Medicaid and Medicare populations that do not pay the full cost of services provided.

A former hospital CEO, Meredith said the United States spends 30 cents of every dollar on healthcare administration, and the bill would cut down on administrative issues and costs that slow hospitals down.

St. Elizabeth Healthcare President and CEO Garren Colvin discussed the complications faced by health care providers when complying with five different sets of rules when it comes to dealing with the MCOs.

It is required for the state to have two MCOs, so the bill would ensure the state has three so that if one were to ever drop out, Kentucky would still have two active contracts.

The Department for Medicaid Services, which oversees the MCOs, testified about ways they are working to streamline the process when it comes to contracts.

Senate Bill 30 now moves to the full Senate for a vote on the floor.

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Jacqueline Pitts
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