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Ky. Senator: Managed Care Taking Toll On Health Providers

LRC Public Information

A Kentucky lawmaker says the state’s managed care organizations are shortchanging health care providers and driving hospitals out of business in the process. Sen. Ralph Alvarado wants more guarantees for providers when it comes to payments.

While supporters applaud managed care organizations, or MCOs, for helping control Medicare costs, Alvarado, a physician, argues the organizations are refusing payment in cases where tests are medically necessary. Take an emergency room patient complaining of chest pain, for instance. He says doctors must perform a battery of assessments to zero in on the problem.

"Let's say they wind up having musculoskeletal pain instead of an actual cardiac condition, but what the MCOs are doing is going back and saying, 'Oh, you had to spend $2000 to figure that out. We're only going to pay you $50 for the visit, minus an $8 co-pay that the person isn't going to pay, and they're getting $42," Alvarado told WUKY, adding that the response is "an outrage."

To remedy this, the Winchester Republican has crafted two bills – one requiring MCOs to reimburse providers at a previously settled rate for ER tests and another introducing a new appeals process for hospitals.

A representative from the Cabinet for Health and Family Services, however, argued that avenues are open for providers to challenge MCOs in court and the cabinet does not have the judicial authority to take on those appeals.  

The Senate Health and Welfare Committee heard testimony on the issue Monday, but did not act on any legislation.

Josh James fell in love with college radio at Western Kentucky University's student station, New Rock 92 (now Revolution 91.7). After working as a DJ and program director, he knew he wanted to come home to Lexington and try his hand in public radio.
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