Judge Rules Against Medicaid Provider

May 29, 2013

FRANKFORT, Ky. -- A judge has ordered Kentucky Spirit to pay for preventative care that local health departments across the state provide to school children.

The Courier-Journal reports Franklin Circuit Judge Phillip Shepherd issued the ruling Tuesday.

The Medicaid managed care provider stopped paying for such services last summer, saying it wasn't obligated to cover the care under its contract with the state.

Shepherd disagreed and ordered the company to pay for care that has been provided since then. The state has estimated the amount to be nearly $8 million. The order affects 59 public health departments in Kentucky and the schools they serve.

In his ruling, Shepherd said that prior to contracting out for Medicaid services, the state routinely paid for services provided by health departments at schools.

"Kentucky Spirit is not free to disregard this longstanding interpretation of Medicaid eligibility and unilaterally re-interpret these to the detriment of local health departments," Shepherd said in the nine-page order.

Kentucky Spirit's parent company, Centene Corp. of St. Louis, released a statement Tuesday saying it is reviewing the order and "considering all options including an appeal."

Gov. Steve Beshear said Kentucky Spirit had "sought a loophole" to avoid paying for critical care for students.

"I applaud Judge Shepherd for rightly holding Kentucky Spirit accountable for the nearly $8 million it owes Kentucky's local health departments for services the other (managed care organizations) have paid without question," Beshear said.

The order pleased health departments and school districts.

"It's great news because there have been dozens of districts that have had to either say they are going to cut back on nurses, or that they are going to close clinics, or that they are going to dip into their reserves to try to cover the additional costs," said Brad Hughes, a spokesman for the Kentucky School Boards Association.