UPDATE 12/27/12 @ 1 p.m.
ASHLAND, Ky. (WSAZ) -- King's Daughters Medical Center has asked for permission to join as a plaintiff in a lawsuit against Coventry Cares of Kentucky.
Appalachian Regional Healthcare, Inc., along with eight
hospitals in southeastern Kentucky, filed this lawsuit last spring when Coventry tried to terminate its contract to provide healthcare services to patients in Coventry’s Medicaid managed care plan.
Coventry ceased operations with KDMC back in October.
KDMC is claiming that Coventry's process of paying King' Daughters' has resulted in underpayment of millions of dollars for services rendered.
The King’s Daughters complaint alleges KDMC is having many of the same problems with Coventry that caused ARH to file the suit in the first place. In an order entered June 20, 2012, in that lawsuit, Federal District Court Judge Karl Forester said Coventry was behaving “as though it wants to ‘cherry pick’ the healthiest of patients in order to improve its bottom line and push the sickest patients to another MCO.” He entered an injunction against Coventry, preventing it from cancelling the ARH contract until Coventry’s members had the opportunity to exercise their right to transfer to another MCO during the fall open enrollment. The Judge also expressed the hope that in the meantime Coventry would make the necessary improvements to its network. Instead, Coventry told its members in September it had cancelled its contract with King’s Daughters, causing many of them to change to a different MCO during the open enrollment that ended October 20, 2012.
Kentucky Spirit, has already announced that because of its losses it is pulling out of Kentucky’s Medicaid managed care program next July. Judge Forester found that without the ARH hospitals there was an “enormous geographic hole” in Coventry’s network. Now that
Coventry has cancelled its contract with King’s Daughters, that hole has doubled in size and now twenty-four out of the thirty-three counties in eastern Kentucky that comprise Regions 7 and 8 in the Medicaid plan do not have a hospital affiliated with the Coventry network where
obstetric services are available.
The Cabinet for Health and Family Services, which is responsible for oversight of Coventry and the other MCOs, has also been name in the complaint.
According to Tom Dearing with KDMC, Coventry's contract will run out Oct. 31.
Coventry and KDMC could not reach an agreement, however, KDMC still has an agreement with Wellcare and are urging patients to switch providers.
U.S. Senior Judge Karl S. Forester said Monday he would consider possible sanctions for the state Cabinet for Health and Family Services later. But he said he will not force the transfers now because an open enrollment period begins Aug. 20, allowing patients to switch on their own.
Forester said the cabinet failed to comply with a May court order allowing transfers from Coventry Cares, which wants to sever its contract with Appalachian Regional Healthcare. ARH, which has eight hospitals in eastern Kentucky, has claimed that the cabinet has hindered transfers of 8,400 who want WellCare of Kentucky, which still has a contract with ARH.
About 25,000 eastern Kentucky Medicaid patients are affected by the ruling Wednesday by U.S. District Judge Karl Forester, according to media reports.
Forester ruled that Coventry Cares must continue its contract with ARH through Nov. 1.
Coventry planned to sever its contract with ARH on May 4, but the hospital chain filed the lawsuit seeking to prevent the termination. Coventry agreed to continue its contract until June 30 while negotiating with ARH, but negotiations stalled.
Forester wrote that temporary injunctive relief is needed for the region's high-risk population.
Lawyers for Appalachian Regional Healthcare and managed-care company Coventry Cares were in court Tuesday arguing over whether Coventry could serve the needs of 25,000 eastern Kentucky Medicaid patients without using ARH facilities.
The regional heathcare system has eight hospitals and other health clinics throughout the region.
Coventry has said it wants to sever its contract with ARH, and ARH has asked that Coventry patients be given the opportunity to transfer to WellCare, another managed care company.
Coventry argued that it could serve the area reasonably without ARH facilities. The judge did not issue a ruling, but asked sides to submit proposed findings by Thursday.
The hearing scheduled for 9 a.m. in Lexington will discuss whether Coventry can maintain a viable network without ARH.
Contract negotiations between the two companies stalled repeatedly during the last two months.
Thousands of Medicare patients have been left wondering what the future holds.
However, patients covered by Coventry are being given the option to switch to Wellcare.
Wellcare is another MCO program.
Grayson resident Tom Boslaugh has a heart condition and says his doctors at King’s Daughters Medical Center have helped keep him alive the past 12 years, but if Medicaid provider Coventry Cares terminates their contract, he won't be able to continue getting the same treatment.
"What I'm really upset about is Coventry Care signed a contract, and I'm sorry. I'm almost 60 years old. I come from a time when if you signed a contract, it meant something," Boslaugh said.
Since November the hospital had 29,000 visits from patients covered by Coventry.
KDMC says this move is an obvious lack of commitment, and they're putting profits ahead of lives.
Coventry is one of three companies hired last year by the state of Kentucky to manage Medicaid.
Coventry has said the re-negotiations stem from not getting enough reimbursement from the state for very sick patients.
Westwood resident Jason Anders is disabled with bad knees. He says it's frustrating knowing his healthcare options may soon be shrinking.
“It's totally ridiculous, the way they're going to be doing patients," he said.
Coventry may also cut ties with Appalachian Regional Healthcare, which has 8 hospitals in eastern Kentucky.
Hospital officials say they're in talks and hope to reach and agreement to extend services.
The Lexington Herald-Leader reports 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 in Kentucky.,
Coventry has also notified King's Daughters Medical Center in Ashland that it will terminate its contract after May 26.
KDMC released the following statement Wednesday afternoon:
We have received a termination letter from Coventry, and are evaluating our response and discussing the situation with Coventry and the State of Kentucky. King's Daughters Medical Center keeps quality patient care first, and we strongly disagree with Coventy's attempt to back of out their contractual agreement to manage the Medicaid program in eastern Kentucky. Coventry's obvious lack of commitment to the people of eastern Kentucky, putting profits ahead of lives, will potentially leave thousands of Medicaid recipients without adequate healthcare options."
Between November 1, 2011, and March 31, 2012, KDMC saw more than 29,000 visits from patients covered by Coventry.
The moves come as Coventry continues contract talks with Appalachian Regional Healthcare, which has eight hospitals in eastern Kentucky.
Our sister station, WYMT-TV says if that if the two can't reach an agreement by then, Coventry will notify beneficiaries then the state will open up enrollment in the region to switch managed care organizations.
Coventry Cares has threatened to cancel a Medicaid contract with Appalachian Regional Healthcare, a hospital chain with facilities in eastern Kentucky and southern West Virginia.
Coventry Cares had said it was looking to pull out of its contract with Appalachian Regional Healthcare after Friday.
The two had been set to go to court to ask a judge to decide whether ARH could force Coventry to allow its members to continue receiving care at ARH facilities.
Stumbo said Thursday he is concerned the managed care organizations could trigger layoffs at Kentucky hospitals that don't receive timely Medicaid reimbursements for services to poor, disabled and elderly patients.
The managed care organization Coventry Cares has threatened to cancel a Medicaid contract with Appalachian Regional Healthcare, a hospital chain with facilities throughout the coalfields.
Kentucky Cabinet for Health and Family Services spokeswoman Jill Midkiff said her agency "is facilitating continuing discussion" between the managed care group and the hospital chain with hopes that a resolution will be reached.
Stumbo said lawmakers will be monitoring the situation closely.
Neville Wise, who is acting commissioner of the state Department for Medicaid Services says she has notified Coventry Cares that they have to give 30 days' notice before dropping a healthcare provider.
Coventry Cares had said it was looking to pull out of its
contract with Appalachian Regional Healthcare after Friday.
Meanwhile, a federal judge has set a hearing to decide whether
to grant an emergency order ARH requested to force Coventry to
allow its members to continue receiving care at ARH facilities.
Coventry spokesman Matthew Eyles said the company is opposed to the injunction.
Attorneys for ARH say patient care will be disrupted and workers will be laid off unless the judge issues an emergency order forcing Coventry Cares to allow its members to continue receiving care at its facilities after May 4.
ARH attorneys filed a request Tuesday seeking the injunction against Coventry. A hearing on the issue is set for Friday morning in Lexington.
If Coventry terminates its contract with ARH it would affect about 25,000 Medicaid receipts in eastern Kentucky and southern West Virginia. The healthcare system includes eight hospitals and several clinics and home-health agencies.
The state decided last year to switch Medicaid to a managed-care program as a way to save money, but problems have arisen during its implementation.