As Obamacare spreads in Kentucky, the state remains conflicted about it and other forms of government help

By Al Cross
Kentucky Health News

Even as Obamacare coverage spreads in Kentucky, more widely than in almost any other state, the commonwealth remains conflicted about it and other forms of government aid -- creating a political battle that is likely to continue at least until the November 2014 elections, and perhaps into the governor's race in 2015.

The federal health-reform law and its presidential namesake have been the centerpiece of the U.S. Senate race, with Republican Sen. Mitch McConnell railing against it, primary challenger Matt Bevin saying McConnell hasn't done enough to dismantle it, and likely Democratic nominee Alison Lundergan Grimes keeping mostly mum as she waits for the political landscape to settle.

McConnell's Kentucky strategy is part of a national game plan, in which "Republicans are launching a class war with racial undertones—and hurting the poor whites they'll need to win in 2014," the respected, non-partisan National Journal said in a cover story in its weekly magazine over the weekend, reported from Louisville by political writer Beth Reinhard. It is titled "Return of the Welfare Queen," a trope popularized by Ronald Reagan.

Reinhard first looks beyond Kentucky, noting that "25 Republican-led states have — astoundingly" rejected expansion of Medicaid under the law. "To justify this unprecedented rejection of federal relief, these governors and state lawmakers say they just do not believe Washington will keep its promise to pick up the tab. Republicans in Congress are egging them on, denouncing Obamacare's disastrous launch as proof of the arrogance and folly of big government."

"The chances of the federal government picking up the tab for the newly eligible Medicaid people long term is zero, which means that the next governor, whoever that may be, is going to be stuck with a huge, huge problem," McConnell said at a Nov. 12 press conference which he limited to the subject of Obamacare. "The Medicaid expansion that we have already experienced, the Medicaid increases that we've already experienced, is the principal reason your kids' college tuition is going up. . . . So we're paying for it already."

National Journal's coverage has a video, the middle frame of which
shows Gov. Steve Beshear and House Minority Leader Nancy Pelosi.

Thus did McConnell conflate recent increases in Medicaid spending with Democratic Gov. Steve Beshear's expansion of the program to households earning up to 138 percent of the poverty line, from the current 69 percent. That will cost the state nothing for three years, because the federal government will pay the entire cost of care for the newly eligible. In 2017, the state will begin to hep out, hitting the law's 10 percent cap in 2020.

Reinhard notes that Republican "tirades" also target food-stamp recipients, and "Pitting makers against takers is simply smart, hardball politics for some Republicans whose "primaries that will be largely decided by a mostly white conservative base that hates the welfare state. . . . Class warfare can work in a primary. But, ultimately, Republicans' scorn for antipoverty programs hinders the party's efforts to expand beyond its conservative base."

Reinhard writes, "This opposition carries an unmistakable undertone of class warfare, a theme easy to exploit in states such as Kentucky, packed with low-income white voters who have a strong distaste for the federal government. To hear the rhetoric coming from Capitol Hill and the campaign trail, Medicaid and food-stamp recipients are a bunch of shiftless freeloaders living high on king crab legs and free health care, all on the backs of hardworking Americans."

But sometimes people who hold those opinions are relying on the government, too. Reinhard writes about Terry Rupe of Louisville, whose "household's $13,000 yearly income comes exclusively from Washington," and whom she met at a clinic where he was signing up for Medicaid: "The 63-year-old widower can't remember the last time he voted for a Democrat, and he's got nothing nice to say about President Obama. He's also never had health insurance, although he started working at age 9. Since his wife's death four years ago, he's been taking care of their 40-year-old, severely disabled daughter full time. She gets Medicaid and Medicare assistance."

Nevertheless, Rupe told Reinhard, "I don't have any use for the federal government. It's a bunch of liars, crooks, and thieves, and they've never done anything for me. I'm not ungrateful, but I don't have much faith in this health care law. Do I think it's going to work? No. Do I think it's going to bankrupt the country? Yes." Reinhard cites a poll which found that "A majority of whites believe the health-care law will make things worse for them and their families."

Next Reinhard introduces us to Adele Anderson, a white, middle-aged woman who gets $10 an hour for child care and $86 a month in food stamps, and was also signing up for Medicaid. She told Reinhard, "Democrats are too liberal. They just want to give handouts."

Reinhard observes, "The disdain she and Rupe show toward living on the government dole at the very moment they are doing just that is typical in a state that distrusts Washington as much as it needs federal help. . . . Still, Obamacare is so politically toxic that McConnell continues to flog the law that appears to be working in his own state. What's more, he's disqualifying its fledgling success by inciting class warfare."

At his Nov. 12 press conference, McConnell noted that more than 80 percent of Obamacare signups in Kentucky had been for Medicaid, and said, "You know, if I went out here on the street and said, ‘Hey, you guys want free health care?’ I expect I’d get a lot of sign-ups. The most successful part of it has been if you’re talking about getting people signed up is people who are signing up for something that’s free."

In response, the Grimes campaign issued a written statement: "It's unfortunate that Sen. McConnell chooses to look down on Kentuckians who need health care, instead of working to fix the problems. He ought to help those Kentuckians, not attack them."

Reinhard notes that Grimes has yet to say whether she supports the Medicaid expansion, but concludes: "Because Kentucky did take the cash, 308,000 poor people are now eligible for health insurance in the Bluegrass State. Over the 11 months leading up to the election, McConnell and other Republicans opposing Medicaid expansion will be hard-pressed to explain why they want to take health insurance away from needy constituents who belong to their own party." (Read more)

Beshear to speak in Washington Thursday about health care's next era; session to be videostreamed

Gov. Steve Beshear will deliver the keynote address to the National Journal forum "Countdown to Transformation: A Roadmap to Health Care's Next Era—90 Days Out" tomorrow at 12:15 p.m. Eastern time. The event will take place in the Ronald Reagan Building and International Trade Center in Atrium Hall at 1300 Pennsylvania Ave. NW in Washington, D.C. It will also be live-streamed on the magazine's website, a press release from Beshear's office said.

The American health care system is about to enter a new era, the National Journal says: "Countdown to Transformation will examine the complex political, medical and business ramifications of the implementation of Affordable Care Act." Beshear has taken a high profile in the rollout of federal health reform because Kentucky is the only Southern state to expand Medicaid and run its own health-insurance exchange.

Judge OKs Medicaid expansion and health insurance exchange

A judge upheld Gov. Steve Beshear's decisions to expand Medicaid and set up the state's health-insurance exchange under federal health reform, but his adversaries say they will continue to fight in court.

Franklin Circuit Judge Phillip Shepherd's two rulings mean that implementation of the Patient Protection and Affordable Care Act, through Medicaid expansion and the health exchange will continue as planned, at least for now.

Circuit Judge Phillip Shepherd

Tea Party activist David Adams filed a lawsuit in April challenging the governor's legal authority to create the insurance exchange, which is called Kynect and begins enrollment Oct 1, without first seeking approval from the General Assembly.

Shepherd said Beshear is simply implementing a section of a federal law that has been upheld by the U.S. Supreme Court, reports Tom Loftus of The Courier-Journal. Adams said he will appeal both the Medicaid expansion and exchange orders directly to the Kentucky Supreme Court, attempting to bypass the Court of Appeals.

Republican Sen. Julie Denton of Louisville, chair of the Senate Health and Welfare Committee, told Loftus she expects major problems to occur if the administration proceeds with Medicaid expansion.

"My overriding concern from the beginning is that Medicaid is not being run well now; they’ve never gotten their hands around managed care,” said Denton. “Do we really want to expand a broken system? And do we want the government to take on another new project like the health-care exchanges?”

Beginning next year, most Americans will be required to have health insurance, and Kynect is designed to help as many as 640,000 uninsured Kentuckians get coverage through private insurance plans. The online service will allow individuals and business to shop for plans, compare benefits and determine eligibility for payment assistance or tax credits.

Beshear announced Medicaid expansion in early May

Adams challenged the constitutionality of a state law mandating that Kentucky use all available federal funds for Medicaid. Shepherd said the legislation was a clear step towards achieving a state objective, to expand health care benefits to "indigent citizens," Loftus reports.

“The Kentucky Supreme Court has held that this legislative power may be delegated to the executive branch of government in these circumstances, so long as there are standards governing the exercise of discretion, and the legislature retains the authority to withdraw the delegation,” Shepherd wrote. “Those conditions are clearly met here.”

The law calls for expansion to cover people under 65 in households up to 138 percent of the federal poverty level -- currently $15,856 for an individual or $32,499 for a family of four. The federal government will pay all the cost of newly eligible Medicaid patients from 2014 to 2017, when Kentucky will increasingly pick up part of the tab, rising to 10 percent by 2020.

Kentucky, insurance companies are applying lessons learned in state's hurried transition to managed-care Medicaid

By Molly Burchett
Kentucky Health News

Gov. Steve Beshear rushed to transplant Medicaid into a new bed called managed care, hoping the new medium would save money and improve health, but his administration didn't take time to condition the soil, fertilize the ground or oil the machinery in 2011. This month, managed-care company Kentucky Spirit proved to be the self-plucking bad weed, fleeing the state as it cited unbearable costs.

Kentucky’s hurried transition to Medicaid managed care has been anything but smooth for many doctors, hospitals and other health-care providers. They have complained about late payments and burdensome reimbursement processes.

It's also not been smooth for the state or the managed-care firms, which are subsidiaries of insurance companies. There have been court battles, tension-filled negotiations, dropped contracts, allegations of a contract breach and now the departure of Kentucky Spirit, pushing its 125,000 clients to one of the other two companies operating outside the Louisville region.

Most important, patients have suffered from the rapid switch and ensuing wrangles.  They complain that prescriptions previously covered by the old "fee for service" system are now denied as not being"medically necessary" by managed-care firms, which the state pays a set fee per person. Patients in rural areas complain because they must drive long distances to find providers in their Medicaid company's network.

But there have been improvements in delivery of health care, particularly in the areas of vaccinations and other preventive services, says the state Cabinet for Health and Family Services. Those include a 33 percent increase in flu vaccinations and an increase in immunizations for children, more well-child visits, increased smoking-cessation consultation, and more than a 50 percent increase in diabetes testing, cabinet spokeswoman Jill Midkiff said.

State and companies made some missteps

Amid those encouraging signs for the future, most of the news about managed care in the past 10 months has been about Kentucky Spirit's potential departure  which occurred July 6. The cabinet is preparing legal action to seek damages from Kentucky Spirit for abandoning its contract; the company, a subsidiary of St. Louis-based Centene Corp., says it didn't break the contract and took every step possible to make a smooth and orderly transition. The state Court of Appeals ruled that Kentucky Spirit could end its contract without a two-month transition period for patients because the state had plenty of time to make arrangements for the company's departure.

It's not clear that the state can recoup damages, or lost taxpayer money, from Kentucky Spirit, though it is having to pay the other two companies more because Kentucky Spirit was initially the low bidder for a managed-care contract. CoventryCares and WellCare of Kentucky are paid an average of about $100 more per month per Medicaid patient.

When Kentucky Spirit first threatened to leave in October 2012, it said it was losing money due to "faulty data" the state provided during the bid process. The two other companies received the same information.

"There were no flaws in the state's data book," CoventryCares CEO Michael Murphy told Kentucky Health News. But he said the companies miscalculated because the data book didn't refer to retroactive payments. That led to a loss of $50 million for Coventry in the first quarter of 2012, he said. Now, he added, the company has a greater understanding of the system.

WellCare, asked if the state provided faulty data, did not answer as definitively. "Medicaid programs are expansive and complex, and it is not unusual for any state to provide data during a RFP [request for proposals] process that may have anomalies or other issues that could negatively impact rates if left unaddressed over time," said Mike Minor, president of the firm.

Schedule seemed politically influenced

Both companies said the state's transition to managed care was rapid and taught difficult lessons. That raises questions about whether haste made waste. Kentucky Spirit blames the state for its losses, and providers blame managed care companies for reimbursement issues, but evidence continues to clearly indicate two problems: too little time and money.

The state has been using managed care in the Louisville region through the not-for-profit Passport Health Plan since the late 1990s, and had long considered expanding it to other parts or all of the state to save money as Medicaid costs burgeoned, especially during the Great Recession.

Gov. Steve Beshear proposed statewide managed care in the budget he gave the General Assembly in early 2011, called a special legislative session to authorize it in March 2011, and signed the legislation on March 25 of that year. The state requested proposals from managed-care companies two weeks later, and bids were due less than two months later.

Contracts were finalized July 8 but implementation was not scheduled until Oct. 1. It was delayed until Nov. 1 "at the insistence of the Kentucky Hospital Association," which "asserted more time was needed for hospitals to negotiate contracts with plans," says a University of Kentucky report published last year and funded by the Foundation for a Healthy Kentucky.

"Several informants told us that they believed that the upcoming election for Kentucky’s race for governor was a primary contributing factor in the rapid implementation timeline," the report says. "Beshear’s office saw the closing of this gap as a major issue that needed to be addressed before the November election," which was held Nov. 8. That effectively delayed most publicity about complaints regarding implementation until after the election.

"There is no doubt that the commonwealth’s rapid transition from a Medicaid fee-for-service program to a managed-care program raised a number of unforeseen challenges," said Minor, of WellCare.

"Certainly, the short timeframe . . . made for a difficult transition," said Midkiff. "Despite the negative portrayal of the managed-care companies, much progress has been made . . . and we expect that progress will continue."

Implementation timeline from UK's Medicaid managed care report

In October 2012, the managed-care companies continued to be dissatisfied with their fees, claiming they were inadequate to provide quality care, says the UK report. In January 2013, the state gave CoventryCares and WellCare 3 to 5 percent rate increases.; Kentucky Spirit asked for 21 percent, Murphy said, but got only 1 percent.

Murphy said the state had reduced rates below those established by the federal Centers for Medicare and Medicaid Services. "We want to establish base rates for primary care services that we hope the state will continue," he said.

Minor said, "While there were legitimate prompt-pay issues during the first six months of implementation of Medicaid managed care, we are now well past those issues."

Looking ahead

Murphy said some of CoventryCares' initial failures were due to the company's lack of understanding, and it has found Health and Family Services Secretary Audrey Haynes and her actuaries very cooperative and transparent, helping improve the system. "CoventryCares had to first figure out the problems going on with providers and payments. We had to understand the risks we had, and things have settled down quite a bit, especially regarding the pre-authorization process," he said. "We've stopped the bleeding."

Murphy said health-care providers will bear the burden of Kentucky Spirit's departure. To resolve issues faced by providers even before that, the cabinet has held regional forums across the state. Reception at the forums has been positive, and providers have been grateful for the opportunity to address any problems or complaints they have with the cabinet and Medicaid staff, said Midkiff.

Some providers still complain, saying that they should not have to meet with managed-care and state officials to receive payment for services already provided to Medicaid patients.

Starting in January 2013, primary care providers were supposed to be paid Medicare rates for Medicaid services over a two-year period, but some providers have yet to see that rate increase. Murphy said Coventry is planning to pay the increased rates as soon as the state's application is approved by federal officials.

Murphy said managed care should not be about the money, but about the member. He said primary care is at the core of improved health outcomes. Minor said WellCare has also made it a goal to establish relationships with primary-care providers.

But for those primary-care providers facing financial difficulties in wake of payment cuts, it is about the money because they need it to keep their practices open.

One of providers' latest complaints is CoventryCares' recent limit on dispensing certain prescription pain killers, to a 15-day supply. The move was made "to curb the manipulations going on with opioid painkillers," said Russell Harper, the company's director of government relations.

Murphy said, "It's not everybody, but there are physicians that don't want to engage in health care." He acknowledged that the prior-authorization process between doctors and pharmacists can be a hassle, but it's just another facet of managing the health care of Medicaid patients. That, and saving money, are what managed care is all about.

Kentucky among states selected to study, address expensive problem of 'superusers' of emergency rooms

Kentucky is one of a few states teaming up with the National Governors Association to address the expensive problem of uninsured or Medicaid-covered "superusers" who over-use hospital emergency rooms or other costly health services instead of lower-cost alternatives like primary care.

“I’m proud Kentucky has been chosen to participate in this important program,” Gov. Steve Beshear said in a news release. “Across the nation, an understanding has been growing that we must focus our efforts on providing the best in coordinated care, helping to direct individuals who may be using more expensive, less effective services to more cost-efficient preventive services that provide better health outcomes in the long run. It’s by achieving these outcomes that we will build a healthier future for Kentucky.”

Kentucky, Alaska, Colorado, Kentucky, New Mexico, Puerto Rico and West Virginia will participate in a policy academy designed to help them create systems for these "superusers", enabling state officials to confront rising Medicaid expenditures while improving quality of care and health, says an NGA release.

These "superusers," sometimes called "super-utilizers" or "frequent flyers," often go to a hospital or emergency room for recurring health issues that can be treated more effectively and less expensively in other ways. Kentucky Medicaid spent more than $219 million on emergency-room use in 2012, and 4,400 Medicaid recipients used ERs 10 or more times during that year, says Beshear's release.

“There’s a handful of people who drive most of our spending,” Dan Crippen, the executive director of the governors’ association, told Kelsey Miller of Kaiser Health News. While the median ER visit cost $615 in 2009, an office-based visit with a physician cost $361, according to the federal Medical Expenditure Panel Survey.

“Kentucky has too long lagged behind in health rankings, and now is the time for us to begin truly moving the needle in the right direction,” said Cabinet for Health and Family Services Secretary Audrey Tayse Haynes. “By participating in this national effort, we can learn what has worked for other states and share Kentucky’s experiences as well.”

State leaders will first meet as a group with consultants from various health-care sectors, then officials will spend 18 months implementing the plans in their communities, says Miller. Funding for the effort is provided by the Robert Wood Johnson Foundation and the Atlantic Philanthropies.

Business leaders discuss possibility of expanding Medicaid through private insurance

By Molly Burchett
Kentucky Health News

Some Kentucky business leaders are discussing a possible endorsement of expanding Medicaid through private insurance, in a plan similar to one the federal government approved for Arkansas.

The Health Policy Council of the Kentucky Chamber of Commerce discussed the idea last Friday. A talking paper for the meeting highlighted presumed benefits of the approach, in which people newly eligible for Medicaid could use federal funds to buy private insurance through the insurance exchange that the state is constructing.

The health council has yet to decide the chamber's position on Medicaid expansion, but the council's talking paper said expanding Medicaid privately might be a better option than expansion of traditional Medicaid, considering the state's tight budget and already problematic managed care system.

The paper says a private plan would be beneficial to Kentucky because it would allow market forces to control costs and ultimately result in better health care. Private expansion would also prevent a flood of newly eligible people from entering the managed care system. "If Kentucky accepts the traditional Medicaid expansion, everyone that qualifies would be put into the already struggling managed care system, which until changes are made, cannot support the influx," the paper asserted.

The Obama administration has encouraged states to consider the Arkansas approach, the paper says.  To do so, states need to apply for a waiver, and the administration has provided information on how a state would apply. "Florida, Ohio, Louisiana, Maine and Pennsylvania are all looking into this option," the paper said.

An estimated 181,000 uninsured adults would become eligible for Medicaid in 2014, if Kentucky decides to accept the funds offered by the health law to provide coverage to those earning up to 138 percent of the federal poverty level.

Gov. Steve Beshear has said he will make his decision about Medicaid expansion no later than July 1. His office has declined to say whether the privatized option is under consideration, saying, "The governor is considering multiple issues as he determines whether Kentucky will expand Medicaid eligibility.  Along with affordability for the state, he is also looking at potential economic impact through jobs and investment created by possible expansion, as well anticipated changes in health outcomes for newly-eligible Kentuckians."

Lawsuit alleges state health insurance exchange is unauthorized

Tea Party activist David Adams filed a lawsuit Monday challenging Gov. Steve Beshear's legal authority to create Kentucky's health insurance exchange without approval from the General Assembly. The governor created the exchange by executive order to offer health insurance plans for Kentuckians under federal health reform, but did not ask the legislature to approve it.

Adams claims state law requires the exchange to get legislative approval, and he seeks an injunction against it. The law allows the governor to temporarily reorganize units of state government and calls for them to be approved by the General Assembly.

Beshear's office says he exercised his constitutional authority to meet the requirements of federal law, reports Jack Brammer of the Lexington Herald-Leader.

Adams said in a telephone interview, "There is nothing in the constitution that allows him to set up a new bureaucracy that taxes, gains fees or spends money without legislative approval." He added, "This isn't about politics. It is simply about gubernatorial authority in the absence of legislative approval."

Kentucky has received about $250 million from the federal government to cover the initial costs of exchange, but Adams said that is being spent rather quickly and funds will be exhausted by 2014, he said. The state will be responsible for all funding for the exchange beginning in 2015; it plans to fund it with fees from participating insurance companies.

Kentucky is one of 17 states that the federal government approved to build its own exchange, which will be operated by the Cabinet for Health and Family Services and is expected to help insure more than 600,000 Kentuckians. (Read more)

Beshear vetoes prompt-pay bill but takes several steps to address problems in Medicaid; he and Haynes say it's working

Gov. Steve Beshear has vetoed the bill designed to make Medicaid managed-care firms pay health-care providers more quickly, but is taking administrative steps to address the issue.

Beshear said he agreed with the intent of House Bill 5 but it might have interfered with the contractual relationship between the state and the four managed-care companies. The bill would have subjected that relationship to the state Department of Insurance's review and investigation process for private-insurance payment complaints. 

"That language would have resulted in excessive costs for state government and taxpayers due to the expansion of the review process beyond the current parameters used for private insurance," Beshear's office said in a press release.

Instead, Beshear ordered the department to take over responsibility for review of prompt-payment complaints from the Department for Medicaid Services. "If improper payment practices are discovered, DOI can impose sanctions," the release said. He also ordered the department to audit each of the managed-care firms operating statewide – Wellcare, Coventry Cares, and Kentucky Spirit – at their cost.

Meanwhile, the firms have agreed to meet with every hospital they have under contract to reconcile outstanding accounts.  "This effort will begin immediately and continue until every hospital’s accounts receivable has been reconciled," the release said.  "The results will . . . be made public, in order to provide transparency and accountability." The firms have  agreed to meet with any other provider who wants a meeting.

Also, the Cabinet for Health and Family Services will hold eight regional forums for providers, managed-care firms, and Insurance Department representatives to discuss concerns and how to improve the system. Part of this effort will focus on "emergency room management that meets community needs without an ER operating as a de facto primary-care office," the release said. "A key component of controlling costs and improving health in a healthcare system is to provide the right treatment in the most cost-effective setting."

CHFS Secretary Audrey Tayse Haynes said the switch to managed care, made in November 2011, is working. “We are already seeing a tremendous increase in the use of preventive services, which improve health-care outcomes, while also reducing the enormous costs for treating chronic health conditions” such as diabetes-related amputations, she said.

Beshear said his plan would solve "lingering implementation problems" with managed care "while preserving the significant improvements in patient care and health care cost savings."

"Getting our people healthy and keeping them that way is not just good health policy, it’s good economics," Beshear said. "That’s why we will never return to the old fee-for-service system.  This is a significant cultural shift in medical care that has already happened across the country in both the private insurance market and in the Medicaid system."

Will Kentucky expand Medicaid, and if so, how?

By Molly Burchett
Kentucky Health News

Kentucky is one of the last states to decide whether to expand Medicaid under federal health reform, and now that the General Assembly has gone home, Democratic Gov. Steve Beshear can turn his attention to the many questions that linger. Some Republican legislators think he will expand the program, but they worry about the cost when the state would have to start helping cover the new expenses, beginning in 2017.

Republican Gov. Bill Haslam of Tennessee decided Wednesday that he will not pursue Medicaid expansion, saying that it could put hospitals in financial jeopardy by giving them more patients on which they lose money, reports Michelle Kaske of Bloomberg. If he is right and the same logic applies to Kentucky, Medicaid expansion in the state could harm the rural hospitals and providers -- some of whom are already squeezed by the issues with the new managed-care system.

Along with Kentucky, 10 other states are undecided about Medicaid expansion: Alaska, Indiana, Kansas, Nebraska, New York, Oregon, Utah, Virginia, West Virginia and Wyoming. The map by The Advisory Board Company shows the lay of the land; for an interactive picture that outlines the research behind the map, click here.

Red=Not participating; Pink=Leaning toward not participating;
Gray=Undecided; Blue=Participating; Light Blue=Leaning toward participating

Only three states with Democratic governors are undecided; 18 Republican governors have rejected expansion. Kentucky is shown as leaning for it because Beshear has repeatedly said that he will expand Medicaid if the state can afford it. He has also mentioned that the state can reserve the right to pull out of the deal in 2017, when it must paying 3 percent of the cost of covering the newly insured, reaching 10 percent in 2020. Still, the questions about cost and affordability remain, and Beshear could be considering another option.

Tennessee has joined Ohio and Arkansas in negotiating with the Obama administration over plans to use federal Medicaid money to purchase private insurance for those who can't afford it but don't qualify for Medicaid now. However, Haslam's plan has been held up because the administration placed too many conditions on the money, writes Kaske. Republicans in other states, including Florida, Louisiana, Pennsylvania and Texas, have expressed interest in this option since Gov. Mike Beebe of Arkansas, a Democrat, ignited the wildfire of creating a hybrid of the two alternatives, reports Robert Pear of The New York Times.

The idea of privatizing Medicaid expansion appeals to many doctors and hospitals because they typically receive higher payments from commercial insurance than from Medicaid. However, many Kentucky hospitals and providers are concerned about the managed-care program that is run by three private organizations, and are calling for immediate action. Beshear has not said whether he will sign or veto a bill that would subject the managed-care firms to the prompt-payments and dispute-resolution rules of the state Department of Insurance.

"Action is needed to address the problems that patients and hospitals are experiencing with Medicaid managed care and to make the system work properly," wrote Harold "Bud" Warman, chair of the Kentucky Hospital Association, and Charles Lovell, chair-elect of the association, in a recent Herald-Leader article that laid out the various problems with the system. "And with the possibility that Medicaid will be expanded in Kentucky to include an additional 350,000 people, it is critical that these issues be addressed right away to avoid even greater problems in the future."

Either using federal dollars to buy private insurance in order to cover newly qualified individuals (the hybrid plan) under the health law's expansion  or expanding in the "traditional" way will not change the current managed care structure of Medicaid in Kentucky. Yet, it would mean that 350,000 more Kentuckians would be covered under managed care; Medicaid would cover those earning up to 138 percent of the federal poverty level, currently up to $15,856 a year for an individual.

The money that the federal government offers for expansion is very tempting. The question then may be, how will it be used?

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Senate sends bill for prompt payment by managed-care firms to Beshear, who won't say whether he will sign or veto it

A bill aimed at resolving payment disputes between medical providers and Medicaid managed-care companies passed unanimously Monday in the Senate, and has been sent to Gov. Steve Beshear for his consideration.

House Bill 5, sponsored by House Speaker Greg Stumbo, D-Prestonsburg, would apply existing prompt-payment laws to managed-care firms and would set up an appeal process in the Department of Insurance to handle disputes between them and medical providers. Those claims are now handled by the Cabinet for Health and Family Services, which administers Medicaid and has had some problems with the bill.

Hospitals, doctors and other health-care providers have complained that the cabinet is not resolving their payment disputes with managed-care firms, putting many rural hospitals, clinics and health departments in serious financial binds.  Mental health centers have also reported cutting back services.

Asked last night what he would do with the bill, Beshear said the cabinet "has worked with the managed-care organizations and health-care providers to reduce problems during the change, and many concerns have been addressed.  However, I recognize that some issues persist.  I will review this bill carefully.”

Beshear has 10 days, excluding Sundays, to decide whether to veto the bill, sign it into law or allow it to become law without his signature. Stumbo said that if bill is vetoed it would likely be House Bill 1 in the 2014 session, reports Jessie Halladay of The Courier-Journal. The bill is a top priority for many health-care providers.

Beshear endorses statewide smoking ban as bill moves to the House floor; Williamsburg adopts its own ban

Gov. Steve Beshear endorsed a statewide smoking ban yesterday at a Frankfort rally to push the bill that would enact the ban.

"Beshear, who later acknowledged that he smoked in college but quit soon afterwards, said Kentucky ranks No. 1 in the nation in smoking and lung cancer," reports Jack Brammer of the Lexington Herald-Leader.

Noting that Kentucky leads the nation in smoking, Beshear said, "Our addiction hurts productivity, jacks up health care costs and literally kills our people. Yet we've never instituted a statewide law to protect Kentuckians from secondhand smoke." Noting that over one-third of Kentuckians live in jurisdictions with smoking bans, he said, "It's time that we extend that protection to all Kentuckians. . . . Years from now, people will wonder why we waited so long."

Republican Rep. Julie Raque Adams  of Louisville, a co-sponsor of the bill, noted at the rally that Williamsburg this week became the 23rd Kentucky locality to adopt a smoking ban.

The statewide measure, House Bill 190, was posted for passage in the House today but is not expected to be called for a vote unless supporters show Speaker Greg Stumbo that they have the votes to pass it.

Read more here: http://www.kentucky.com/2013/02/14/2517025/former-kentucky-basketball-star.html#storylink=cpy

Beshear calls for action to improve state's health, but says only that 'It's time for us to begin looking seriously' at a smoking ban

By Al Cross
Kentucky Health News

His priorities were education and tax reform, but Gov. Steve Beshear mentioned several health issues in his State of the Commonwealth speech tonight to a joint session of the General Assembly.

Beshear called for action to correct the state's "fundamental weaknesses," including "a population whose health ranks among the worst in the nation." Near the end of his speech, he said, "We need to continue improving the health of our people," but after about a minute of discussing tobacco and smoking he stopped short of endorsing a statewide ban on smoking in the workplace. (KET photo)

"It's time for us to begin looking seriously at doing this on a statewide level," he said to some applause, after noting that nearly half of Kentuckians live in jurisdictions where smoking is legally restricted, that the state has the highest or next-to-highest smoking rate overall and among teens and pregnant women, and that "Our smoking-related mortality rate is the worst in the nation. . . . Our addiction hurts productivity, jacks up health care costs and kills our people."

Beshear called for improving prenatal care and newborn screening, and for minor improvements in last year's bill to fight prescription drug abuse. He said the bill has caused a precipitous drop in abuse of prescription painkillers. "Kentucky at one time had the sixth highest rate in the nation, but . . . we improved 24 spots," he said. "Nearly half of the state's known pain management clinics have closed rather than submit to new rules that protect patients." He said use of the Kentucky All Schedule Prescription Electronic Reporting system "has increased nearly seven-fold . . . and prescriptions for some of the most abused drugs have dropped up to 14 percent from a year ago."

However, the problem of babies becoming addicted to drugs in their addicted mothers' wombs has skyrocketed in the last decade or so, Beshear said: "In 2000, reports showed 29 babies in Kentucky born addicted to drugs. But in 2011, there were 730 babies – more than 25 times as many. And that figure is thought to be under-reported." He did not say how he wants to improve screening.

Beshear did not mention perhaps the biggest health policy question facing the commonwealth, whether to use federal subsidies to expand the Medicaid program to people in households earning up to 138 percent of the federal poverty threshold. Now the program covers people in households earning up to 70 percent of the poverty line. The federal government would pay all the cost of the additional enrollees through 2016, when the state would start picking up part of the tab, up to 20 percent in 2020.

Some Republicans say the state can't afford the expansion, while some Democrats say it would be a good long-term investment in the state's health and economy. Beshear has said he wants to do it if the commonwealth can afford it, and expects to get cost estimates around the end of March -- about the time the legislature must adjourn.

For a PDF of the speech text, click here. For an audio recording, go here. For video from KET, here.

In wake of pill-mill regulation fight, Beshear has chance to craft a medical licensing board more to his liking

Gov. Steve Beshear

Gov. Steve Beshear is in a position to reshape a state medical board that has played a central and controversial role in recent efforts to crack down on prescription drug abuse. Mike Wynn of The Courier-Journal  reports that the terms of three members of the Kentucky Medical Licensure Board expired Aug. 31, and two other members’ terms await action after ending last year.

The licensure board drew criticism in 2011 "for not taking more aggressive action against so-called pill mills and corrupt doctors who supply Kentucky’s drug epidemic," Wynn writes. "The medical industry also has criticized the board in recent months for writing what doctors view as overly complex and excessive prescription regulations under HB 1, a landmark bill from the 2012 General Assembly that takes aim at abuse of drugs."

Beshear spokeswoman Kerri Richardson said the appointments are under review but did not indicate how the governor might proceed other than noting that he will consider qualifications and recommendations. Current board members serve until Beshear makes any new appointments. (Read more)

Four pain clinics already closed as 'pill mill' bill takes effect; Beshear says nine more haven't applied, will be investigated

By Tara Kaprowy
Kentucky Health News

Just days after new legislation has taken effect to combat prescription drug abuse, four pain clinics in Kentucky say they will close, Gov. Steve Beshear announced today. "The word is out. Kentucky is deadly serious about stopping this scourge of prescription drug abuse and now we have some of the strongest tools in the country to make that happen," the governor said, adding that nine other pain-management clinics have not applied for licenses and will be investigated.


The law puts more restrictions on pain clinics to prevent so-called "pill mills" from setting up shop in the state. To be licensed, pain clinics must be owned by a licensed medical practitioner, and the law requires licensing boards to investigate complaints immediately.

It also requires doctors who prescribe controlled substances to refer to the state's drug-monitoring system known as KASPER before they write a prescription so they can see if a patient appears to be doctor shopping. The licensing boards have been charged to set up standards to increase oversight and spell out how doctors should be using KASPER (Kentucky All Schedule Prescription Electronic Reporting).

Though changes are still possible, the licensing boards issued those regulations last week, which were more expansive than originally required in the new law. The boards indicated they wanted KASPER to track all Schedule II and III drugs and 15 more Schedule IV drugs. The statute originally only required tracking of Schedule II and Schedule III drugs that contain hydrocodone.

Cracking down on actual pill mill owners, drug abusers and dealers had been difficult up until now since law enforcement couldn't see the data in KASPER without already having a case file opened. In his first four years in office, Attorney General Jack Conway said repeatedly he never got a referral from the Kentucky Board of Medical Licensure saying an investigation should be conducted.

Now when a complaint about prescription drug abuse is lodged with any investigative agency — the attorney general's office, Kentucky State Police, any of the licensing boards or the Cabinet for Health and Family Services — it must be shared with the other agencies within three days. However, the six licensing boards (medical licensure, nursing, dentistry, pharmacy, podiatry and optometry) don't have to share among each other. "This alleviates concerns that the professional organizations would be forced to report information to other boards that have no jurisdiction over the complaint," Beshear said.

If the Kentucky State Police sees there has been a complaint made by another agency, its officers do still need to open "a bona fide specific investigation on that designated individual" before they can request their own KASPER report or see the one used to prompt the complaint, said CHFS spokeswoman Jill Midkiff.

Some critics have said the legislation interferes with the care doctors provide for their patients and threatens confidentiality. To that end, Beshear said people who legitimately need prescription drugs "have nothing to fear. You'll get your medicine." For doctors who are concerned they won't be able to prescribe as they wish, Beshear said provisions have been built into the law to prevent that from happening.

"But if you're doctor-shopping, buying extra pills for recreational use, or prescribing pills for cash, you'd better change your vocation or change your location, because we're coming after you," he said.

As for arguments that checking with KASPER to see if a patient has a questionable prescription history will be too time consuming for providers, "nine times out of 10, it will take as much time as measuring a patient's blood pressure or recording their insurance information," said Mary Begley, CHFS inspector general. CHFS reports 90 percent of KASPER reports are completed within 15 to 30 seconds.

A prescriber or pharmacist can also choose delegates — like a nurse or an aid — to run reports on their behalf, Midkiff said.

The licensing boards have allowed a grace period until Oct. 1 to allow practitioners to time to learn how the new policies will work, according to Beshear's press release.


Kentucky Health News is a service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Beshear says no to hospital merger

Gov. Steve Beshear has said no to the much-discussed merger between three major Kentucky health systems, which, because it required his blessing, puts an end to the proposal.

"After exhaustive discussions and research, I have determined that this proposed transaction is not in the best interest of the commonwealth and therefore should not move forward," he said. "In my opinion, the risks to the public outweigh the potential benefits."

The merger would have been between University of Louisville's University Hospital, Jewish Hospital & St. Mary's HealthCare and Saint Joseph Health System, owned by Catholic Health Initiatives. Because Saint Joseph would have had majority control in the deal, the other facilities would have had to adhere to Catholic health directives, which affect procedures such as elective abortions, sterilizations, artificial insemination and euthanasia. (C-J photo by John Rott)

"That raised concerns among many community members and leaders, who also worried about the possibility of more limitations in the future if Catholic directives change," reports Laura Ungar of The Courier-Journal.

Beshear said the merger would result in considerable legal and policy concerns. "However, most troubling to me is the loss of control of a public asset," he said. "University Hospital is a public asset with an important public mission, and if this merger were allowed to happen, U of L and the public would have only indirect and minority influence over the new statewide network's affairs and its use of state assets."

Attorney General Jack Conway applauded Beshear's call. "I believe he ultimately made the appropriate decision on behalf of the commonwealth's interests," he said.

Hospital officials expressed disappointment, saying the "greatest beneficiaries of the proposed merger" would have been the patients of the commonwealth.

Beshear acknowledged the changing face of health care landscape does present new problems, but added he is committed to helping University and Jewish Hospital & St. Mary's HealthCare reach "our shared goals of providing quality care, especially to our poorest and most vulnerable citizens, as well as finding ways to ensure both facilities remain on strong financial footing," he said. (Read more)

Optometrists, ophthalmologists debate bill on TV after its passage

The bill to let optometrists perform some procedures now done legally only by ophthalmologists has passed both houses and is on the governor's desk, but members of both professions are debating its effects on television.

Leaders of the Kentucky Optometric Association and the Kentucky Academy of Eye Physicians appeared on cn|2's "Pure Politics" with Ryan Alessi on Insight cable Friday night, and are scheduled to appear on KET's "Kentucky Tonight" with Bill Goodman Monday at 8 p.m. EST.

Ben Gaddie of Louisville, president-elect of the optometrists' group, told Alessi that while the bill was passed only 11 days after it was filed, becoming the year's first to go to Gov. Steve Beshear, “We weren’t intentionally hiding anything … There are no secrets in Frankfort.”

Woodford VanMeter of Lexington, president of the ophthalmologists' group, "took issue with the ophthalmologists receiving limited time to raise their objections during committee hearings on the bill," cn|2 reports. (Click arrow to start video)

Governor undecided on meds-for-meth bill, says time hasn't come for state smoking ban, but may back nursing-home legislation

By Al Cross
Institute for Rural Journalism and Community Issues

Gov. Steve Beshear says he hasn't made up his mind about the bill that would require prescriptions for decongestants used to make methamphetamine, but he sounds skeptical. And he doesn't think Kentucky is ready for a statewide smoking ban, but he might endorse legislation to better protect residents of nursing homes.

Beshear addressed the three health issues under questioning from Bill Bryant of Lexington's WKYT-TV on the latest "Kentucky Newsmakers," broadcast today. To watch the broadcast, click here.

"I'm personally conflicted" about the meds-for-meth bill, Beshear said, but his more specific remarks indicated skepticism. He said people in law enforcement are "pushing very hard" for the bill, and noted that such a law greatly reduced the number of meth labs in Oregon, and might do the same in Mississippi, but he suggested the numbers might go back up.

"They’ll just go across the state line and get it across the counter," he said of meth makers, adding that the problem needs a national solution, perhaps like Kentucky's registration-and-reporting system for sales of pseudoephedrine and other decongestants. "You're going to have to have a system that applies in every state," he said. "I'm concerned about the millions of people who need to go buy cold medicine."

Bryant noted that law-enforcement officials say most pseudoephedrine sold in Kentucky goes to make meth, and asked Beshear if those officials had convinced him of the need for a prescription law. "I haven’t heard that statistic," Beshear said, reiterating his indecision. "It’s tough one because there isn’t any easy answer to it."

The meds-for-meth bill is one of the legislature's major issues, with drug manufacturers finacing heavy advertising campaigns against it but major political figures in Appalachian Kentucky weighing in for it. On Thursday, the bill pased a Senate committee on a bipartsan 6-4 vote after competing testimony from 5th District U.S. Rep. Hal Rogers and Pat Davis, the wife of 4th District Rep. Geoff Davis, all Republicans.

The bill's supporters also include House Speaker Greg Stumbo, the legislature's top Democrat, and Senate President David Williams, the top Republican, who is seeking his party's nomination for governor in the May 17 primary election.

Williams also favors a statewide smoking ban. Beshear, who is unopposed for the Democratic nomination, said Kentucky isn't ready for such a law, but will be once local bans become more prevalent: "Once you start getting experience with it, I think your business community becomes more comfortable with it … and people enjoy it."

The governor said momentum for a statewide ban "is building, but I don’t think we're at the point where everybody in the state is ready to go in that direction." He said his administration took a step against smoking by making cessation programs eligible for Medicaid.

Asked about a Stumbo proposal to ban smoking in cars with children, Beshear called it "an interesting concept" that deserves discussion but said the idea is "probably in the same situation" as a general ban, which has been offered as a bill by Rep. Susan Westrom, D-Lexington.

Williams' opponents in the Republican primary, Jefferson County Clerk Bobbie Holsclaw and Louisville businessman Phil Moffett, oppose a statewide smoking ban. Holsclaw favors local bans, but Moffett said at a recent Kentucky Press Association forum that the dangers of secondhand smoke have been "overblown."

Bryant asked Beshear if he plans to endorse a package of nursing-home legislation. "I’m talking to legislators who have some good ideas on how we can increase the protections to our elderly," the governor said. "We’ve got to do even better. The restrictive part is, we have no money … but that shouldn’t stop us and should not be an excuse for not doing some of the non-monetary things we can do to protect our elderly."

Beshear was not asked about specifics of the package, but for years Kentuckians for Nursing Home Reform and other advocates have lobbied for minimum staffing requirements at nursing homes. The long-term care industry, one of the more influential in Frankfort, has beaten back those efforts, arguing that homes need more flexibility and state inspections ensure proper care.