Daily Independent (Ashland, KY)

February 4, 2013

KDMC might join suit

Motion was submitted Tuesday

Kenneth Hart
The Independent

Lexington — By KENNETH HART

The Independent

LEXINGTON A motion by King’s Daughters Medical Center to join a federal lawsuit against one of Kentucky’s managed care Medicaid providers is now being considered by the presiding judge in the case.

Having been fully briefed, the motion was submitted Tuesday to the chambers of U.S. District Karl S. Forester, according to court records.

KDMC and its affiliates filed a motion in December to intervene as a plaintiff in the suit, which was filed in April against Coventry Health and Life Insurance by Appalachian Regional Healthcare Inc. The suit also names the state Cabinet for Health and Family Services and its secretary, Audrey Haynes, as defendants. ARH, which operates a network of eight hospitals in Kentucky and two others in West Virginia — filed the suit after Coventry tried to terminate its contract to provide health care services to patients in Coventry’s Medicaid managed-care plan.

Coventry and the Cabinet both filed briefs in opposition to allowing KDMC to join the suit. In its pleadings, Coventry accuses KDMC and ARH, “horizontal competitors” in the health care market, of engaging in “collusion ... intentionally designed to gain leverage over Coventry to raise reimbursement rates.

“Allowing KDMC and ARH to engage in such collusion under the cloak of the pending lawsuit between ARH and Coventry would provide nothing less than a judicial endorsement of such collusion amongst competitors,” the brief states.

King’s Daughters’ reply in support of its motion, filed by attorney Allison Brown Vermilion of Lexington, states that both the Cabinet’s and Coventry’s pleadings “make clear their dissatisfaction that yet another health care provider is seeking redress for the harms it is suffering because of Kentucky’s chaotic implementation of Medicaid managed care.” However, absent from either pleading is “any good reason” why KDMC should not be allowed to join the suit, the reply states.

The reply also refutes the various other reasons stated by the Cabinet and Coventry as to why KDMC should not be allowed to intervene, including lack iof timeliness, KDMC’s and ARH’s claims not sharing legal and factual questions and the Cabinet’s claim of immunity, which, the Cabinet argues would result in the immediate dismissal of KDMC’s claims.

KDMC claims Coventry’s process of paying the hospital’s claims has resulted in consistent underpayment of millions of dollars for services rendered by the hospital. Additionally, KDMC has said it believes Coventry was canceling provider contacts in eastern Kentucky to pursue profits in other, more lucrative areas of the state. Beginning Jan. 1, Coventry was awarded a contract by the state to provided managed care services to Region 3, which includes Louisville and the surrounding areas.

Coventry told its members in September that it canceled its contract with KDMC, causing many to switch to different MCOs during the open enrollment that ended Oct. 20, the hospital said.

Coventry was one of three successful bidders to become authorized MCOs for Kentucky’s Medicaid recipients. The others were Wellcare and Kentucky Spirit. However, the MCOs claim they’re losing money because the rates paid to them by the state are not adequate to cover the cost of the care needed by Medicaid patients. Kentucky Spirit has already announced it’s pulling out of the program in July.

KENNETH HART can be reached at khart@dailyindependent.com or (606) 326-2654.