State Auditor: Kentucky Isn't Ready for Expanded Medicaid Coverage

Jul 31, 2013


Kentucky’s State Auditor Adam Edelen is concerned about the Commonwealth’s ability support an added 300,000 resident’s to its Medicaid program. Expanded Medicaid coverage next year comes as part of the rollout of the Affordable Care Act.

Edelen’s office has issued a report detailing challenges providers face within Kentucky’s Managed Care model. Kentucky pays managed care organizations to process and pay claims. Medicaid providers continue to have trouble with complicated claims processes and long delayed payments   Edelen says an 8 percent drop in providers is an indicator that the Commonwealth will have trouble treating an influx of Medicaid eligible patients.

“Making sure they are properly compensated for the work they do and making sure that compensation comes in an efficient amount of time is key to the longtime financial viability of a level of healthcare that a lot of rural Kentuckians depend upon,”said Edelen

According to Edelen,  rural hospitals have the most trouble floating Medicaid related costs as they navigate complicated claims processes and wait for long-delayed payments.

“They lack the cash reserves that larger hospitals have and I think we all know that we want to make sure Kentucky is a state where everybody has access to quality healthcare, but for that to happen you’ve got to make sure that rural community based hospitals continue to be financially viable," said Edelen. 

According to Edelen, one hospital reported a nearly 300 percent increase in the amount of outstanding claim payments due to errors in claim processing, lack of clarity with certain MCO policies, contradictory communication with the MCOs or problems with coding.

Edelen's report concluded that some of the issues were the result of the quick transition to managed care. The managed care organizations had four months to establish operations in Kentucky. The report found that major issues continue to challenge the system.

Edelen said he supports Kentucky’s managed care model, but he intends to work with the Cabinet for Health and Family Services, which oversees the managed care organizations,  to implement changes suggested in his report.