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Managed-care shift hard for Kentucky

| Saturday, July 13, 2013, 8:27 p.m.

GREENSBURG, Ky. — Kaden Stone loves playing baseball, riding his bike and watching “Duck Dynasty” on TV at his red brick ranch-style house in rural, south-central Kentucky.

Despite his energy, the tiny 8-year-old boy with a crew cut and missing front tooth can't eat much, the result of congenital bowel problems that have required dozens of surgeries and procedures. He needs PediaSure, says his mother, who was shocked when Kaden's Medicaid managed-care plan stopped paying last fall for the expensive nutritional drink, saying it was not “medically necessary.”

“We couldn't believe it, because he had only gained four pounds in a year, and the doctor says he had to have it because he wasn't flourishing,” Angelina Alcott said. “He's only 3½ feet tall and 48 pounds.”

Ever since Kentucky rapidly shifted patients from traditional Medicaid to private health plans that manage their care for a set price, problems have been widespread. Patients complain of being denied treatment or forced to travel long distances to find a doctor or hospital in their plan's network. Advocates for the mentally ill argue that the care system for them has deteriorated. And hospitals and doctors say health plans have denied or delayed payments.

Experts warn that what happened in Kentucky should be a cautionary tale for other states that rush to switch large numbers of people enrolled in Medicaid, the state-federal program for the poor and disabled, to private managed-care plans in hopes of cutting costs and improving quality. Nearly 30 million Americans on Medicaid now belong to a private health plan, as states move away from the traditional program that paid doctors and hospitals for each service they provided.

Beginning in January, millions more will become eligible for Medicaid under the federal health law, and many will be placed in managed care.

“The Kentucky case is a harbinger of what can happen when states don't allow enough time and devote sufficient resources to strengthen the Medicaid agency's oversight capacity and systems — or develop strong contracts and care-monitoring systems from scratch if they haven't contracted with managed care plans before,” said Debra Lipson, a senior researcher at Mathematica Policy Research.

Medicaid managed care appears to be running more smoothly in states that phased it in gradually.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

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