Former KHA Chair: Edelen's Assessment of Rural Hospital 'Crisis' Will Point to Medicaid Managed Care

Jul 9, 2014

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The former chair of the Kentucky Hospital Association says state Auditor Adam Edelen’s efforts to compile data related to what he calls a financial “crisis” for rural hospitals will point toward the impact of Medicaid managed care.

Kentucky's managed care program contracts with private companies to assess claims and process payments to hospitals for the state’s Medicaid recipients.

Caldwell Medical Center CEO Charles Lovell just completed a one-year term as chair of the KHA. He says his hospital in Princeton routinely gets paid $50 for as much as $2,000 worth of medical treatment under the system.

“That hurts any and all hospitals, but for a small hospital our size, we don’t have the other services and programs and revenues to minimize that,” Lovell said.

Lovell says Edelen’s report will also find that rural hospitals are hurting due to federal cuts.

“We’re getting cut from a federal standpoint, we’re getting our reimbursements cut,” Lovell said. “Medicare is cutting reimbursements. Then you take the public side or the patient side, who now have higher deductibles or don’t have insurance. So it’s just a very cumulative effect.”

Edelen says his office is trying to deeper understand the financial hardships of rural hospitals so a lasting solution can be achieved. To do this, he has solicited the financial records of 66 public, nonprofit and for-profit hospitals in rural areas, including Caldwell Medical Center. A survey for rural hospitals will follow, before the final report is released this fall.

Edelen will visit the Princeton hospital for a public hearing on Friday, July 31. Earlier that day, he will conduct a similar meeting at Baptist Health Madisonville. For the full list of Edelen's public hearings, click here.