Tribune-Courier News Editor
The closing of a Kentucky Medicaid contractor will leave a debt of $112,834 to the Marshall County Health Department.
Kentucky Spirit announced May 7 it would cease operations in Kentucky. The company provided Medicaid to approximately 40,000 children and adults since November 2011.
Kentucky Spirit was one of three payers contracted in 2011 to provide Medicaid coverage for eligible, low-income patients. According to the Lexington Herald-Leader, Kentucky Spirit sued the state in 2012. The company claimed Kentucky provided it with misleading figures before it bid on the contract to privatize Medicaid care management.
According to a Kentucky Spirit press release, significant gaps between data the state provided and the actual cost of providing care to Kentucky’s Medicaid population resulted in unsustainable financial losses for Kentucky Spirit. New Cabinet policies and initiatives further added to its losses. The health plan’s repeated attempts to negotiate a long-term partnership with the state were unsuccessful.
“It’s quite a substantial debt,” said Cathy Thompson, financial administrator of the Marshall County Health Department.
Stacey Smith, account clerk at the Marshall County Health Department, said the conflict between Kentucky Spirit and the health department was being addressed at the state level.
“It’s in the hands of the Department of Public Health. They are having to fight for us and all other health departments in the state. There are 56 health departments in Kentucky. It’s not just health departments. It’s hospitals, primary care physicians, clinics. Anyone who billed Kentucky Spirit for Medicaid services provided is having a problem.”
Smith said problems with Kentucky Spirit making payments began in November 2012.
According to Kentucky Spirit’s press release, the company notified the Cabinet on October 17, 2012 that it was terminating its contract effective July 5, pursuant to its right under the Managed Care Organization (MCO) Contract to terminate at the end of the second year. It will lay off 145 employees on July 5, and the remainder of its 200-person work force over the next six months.
The press release also identifies Kentucky Spirit as a subsidiary of Centenary Corporation. It describes it as a Fortune 500 company that provides Medicaid payment and Children’s Health Insurance Program coverage in other states.
“I want to know what state agency will try to collect this money, especially since it’s every health department, every hospital and every doctor that they owe. I don’t know if it will remain at the Department of Public Health or go to the Attorney General,” Judge-Executive Mike Miller said.
Miller said multiple-county health departments and hospitals could be owed more by Kentucky Spirit, given more services and the high cost of surgery.
“I’m sure what they owe is in the millions, but they were the ones that made the decision to get in the game,” Miller said. “I don’t know if it’s bad planning or they don’t know what they were doing.”