Another Kentucky Medicaid Provider Battle Looming

May 9, 2012

LEXINGTON, Ky. -- One of the Medicaid providers hired by the state in an effort to cut costs of providing care to poor people plans to renegotiate its contract because it's not getting enough reimbursement from the state for very ill patients.

Coventry Cares has said it wants to renegotiate its agreement with Baptist Healthcare System or it will let its current contract expire on Nov. 1. Baptist Healthcare has five hospitals located in Lexington, Louisville, La Grange, Paducah and Corbin.

Coventry also has notified King's Daughters Medical Center in Ashland that it will terminate its contract after May 26, though hospital officials say they are in talks and hope to reach an agreement to extend services.

The moves come as Coventry continues contract talks with Appalachian Regional Healthcare, which has eight hospitals in eastern Kentucky. A deadline on those talks was moved from May 4 to June 30 after ARH filed a federal lawsuit against Coventry.

Baptist Healthcare spokeswoman Ruth Ann Childers said the hospital system has agreed to talks.

"We are hopeful and optimistic and fully intend to work with Coventry in good faith on this issue," Childers said. "We don't want anybody who wants to come to the Baptist Healthcare System not to be able to do so if we can work it out at all."

Coventry spokesman Matt Eyles said there's time for the parties to reach an agreement.

"Our contract with Baptist does not expire until November 1, which is over five months away," Eyles said. "We are hopeful that we can find a solution that balances member access, affordability, and quality. Instead of waiting, we thought it would be better to inform Baptist about the reality of our situation to improve the chances of a timely solution.

"With several months' data and experience and, given recent risk adjustment developments, we are now looking across providers to create the most effective, highest performing network."

Coventry is one of three companies hired last year by the state to manage Medicaid in a move that was supposed to cut costs, but there's been a rocky transition.

Coventry has said the re-negotiations stem from not getting enough reimbursement from the state for very sick patients. State officials did a risk adjustment in April, but Coventry says in court documents that it's not enough.

Coventry has more than 25,000 people in the ARH service area. Information from the Cabinet for Health and Family Services shows more than 22,000 Coventry patients in counties where Baptist has hospitals, though it was unclear how many use Baptist Healthcare.