Opinion Editorial: Kentucky’s Move to Medicaid Managed Care Continues to Pay Off

by Tom Stephens, executive director of the Kentucky Association of Health Plans

Just 10 years ago, Kentucky found itself in a budget crisis that was largely precipitated by ballooning Medicaid costs. The state needed over $150 million to make up for shortfalls in the program. Elected leaders were staring at potentially devastating cuts to healthcare services for low-income and at-risk Kentuckians. This also posed a major threat to the state’s healthcare infrastructure because a 30% reduction in reimbursements for providers was in the offing without a major course correction in Frankfort.

At the time, Kentucky was using a Fee-For-Service (FFS) Medicaid model− a pay-as-you-go system that is unplanned in nature, which means care coordination is severely lacking, resulting in limited prevention services and lack of early treatment of chronic conditions. FFS also meant the biennial Medicaid budget was a moving target because providers were paid by volume, not value of services and there was limited accountability when it came to ensuring individuals were receiving appropriate care. The unpredictability of the FFS model forced a change.

Kentucky first introduced statewide managed care within its program in 2011 to maximize private competition, empower consumers with choice, promote personal responsibility, and ensure more efficient and predictable use of taxpayer resources.  Kentucky contracted with managed care companies through its Medicaid program to provide patient-centered care management and delivery of healthcare as well as additional services aimed at improving the health and well-being of the state’s Medicaid members.  The state designed this new model of providing healthcare services to address the state’s challenging baseline of health status and lifestyle dynamics.

[Read more in The Lane Report]