Wednesday, January 13, 2016

Senate bill tackles health care reimbursements

An adolescent is admitted to a psychiatric hospital last April for taking a gun to school. Before the child could shoot a classmate who had bullied him, he elbowed a teacher in the ribs. That’s when the teacher discovered a 9 mm pistol.

The teacher took the gun and the child, whose father was in prison for murder, was admitted to a psychiatric hospital – but a Medicaid managed-care organization refused to pay for this treatment, said The Ridge Behavioral Health Systems CEO Nina Eisner. She used the example while testifying at today’s meeting of the Senate Standing Committee on Health and Welfare.

Eisner spoke in support of Senate Bill 20. The legislation would create an independent review process for health care providers to appeal claims that have been denied by managed-care organizations (MCOs), private companies contracted by Kentucky to administer Medicaid. Under the current structure, appeals have to be made directly to the MCOs.

Currently about 1.1 million individuals are served via MCOs in Kentucky, and this accounts for about 69 percent of the total state Medicaid budget. Last year Kentucky renegotiated the MCO contracts in hopes of reducing the number of disputes over rejected claims but health providers testified that it’s still an ongoing problem.

Eisner, who is also the chairwoman of the 42-member Kentucky Association of Hospitals Psychiatric and Chemical Dependency Forum, said there are examples all over the state of patients with homicidal ideations unable to get their care paid for by MCOs.

“Senate Bill 20 is a very important piece of legislation to us because it gives all Kentucky Medicaid providers access … to an independent appeal process to resolve legitimate disputes with Medicaid managed care organizations,” she said. “It is really untenable and it is also unreadable to expect Kentucky providers to deliver health care services for free. The bill gives providers nothing more than an opportunity for an independent administrative hearing to address legitimate disputes concerning medical necessity denials.”

Sen. Ralph Alvarado, R-Winchester, is the primary sponsor of SB 20. The legislation is modeled after, and nearly identical to, existing laws in Virginia and Georgia where three of the five Kentucky MCOs are already operating. Similar legislation was also introduced last year.

SB 20 calls for the Kentucky attorney general’s office to be the independent arbitrator, prompting Sen. Reginald Thomas, D-Lexington, to ask how much that will cost.

Alvarado said the appeals process costs Georgia, a state with three times the number of Medicaid patients, about $4 million per year. Alvarado added that he has asked legislative staff to come up with a cost estimate for Kentucky but said it could possibly be about a third of Georgia’s costs.

Thomas also expressed concern that there could be a potential conflict of interest with the attorney general’s office because it already investigates medical providers through the Office of Medicaid Fraud and Abuse.

Despite the concerns, the SB 20 unanimously passed the committee. It will now go to the full Senate for consideration.