FRANKFORT, Ky. (AP) — Gov. Steve Beshear vetoed a bill Friday that would have set up a process to resolve payment disputes between medical providers and Medicaid managed care organizations.
Beshear told reporters at a Capitol press conference that the bill could have led to excessive costs to state government and interfered with contracts between doctors, hospitals and the managed care groups. The second-term Democrat said he would take administrative actions, instead, to handle payment disputes.
House Speaker Greg Stumbo, D-Prestonsburg, had proposed the legislation because of complaints that Medicaid payments weren't always being made promptly. Beshear said a review found that most claims over the past year had been approved and paid.
"I understand and appreciate what legislators were working to accomplish with House Bill 5, and I fully agree with its intent," Beshear said. "It's clear they are driven by a desire to maintain reliable and accessible health care in their communities. "But as written, HB5 has possible unintended consequences that reach far beyond the so-called 'prompt pay' dispute."
Beshear said his plan will look for weakness in the state's relatively new managed care system and initiate an educational effort to encourage hospitals, doctors and other medical providers to accept managed care as part of a new culture in health care.
The governor borrowed one provision from Stumbo's bill that would make the Kentucky Department of Insurance responsible for reviewing payment disputes.
In addition, Beshear has ordered the state's three managed care organizations — Wellcare, Coventry and Kentucky Spirit — to meet with every hospital in the state to reconcile accounts receivable. He said that effort is to begin immediately.
Beshear also ordered targeted audits of the managed care groups by the Department of Insurance.
"Our collective goal has always been to provide quality medical care for Medicaid patients, and we have already seen real success on that front," Beshear said. "Now our job is to troubleshoot remaining problems, and our action plan does that ... without the unintended consequences that could jeopardize the managed care program in Kentucky."
Beshear said the managed care system, implemented in late 2011, has saved "hundreds of millions in taxpayer dollars."
Beshear said Kentucky's Medicaid population has had an increase under managed care in the number of diagnostic screenings, body mass index recordings, blood pressure monitoring and smoking cessation consultations. He also reported a significant decrease in the number of diabetes-related amputations.
"Getting our people healthy and keeping them that way is not just good health policy, it's good economics," Beshear said. "That's why we will never return to the old fee-for-service system. This is a significant cultural shift in medical care that has already happened across the country in both the private insurance market and in the Medicaid system."
Stumbo said passage of his legislation by the House and Senate shows a real problem exists.
"We will continue to monitor the situation, and every legislator will talk with their local providers to see if the new approach is working," Stumbo said in a statement. "The intent of HB 5 was to give all parties a fair forum to resolve disputes, and I believe the governor's directive is clear. We could pass a thousand laws, but a directive from the governor has a great positive effect."