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Bill Seeks to Address Claims Denied by MCOs

Last week the state Senate Health and Welfare Committee discussed how to hold managed care organizations (MCOs) accountable for their medical necessity decisions.

Senate Bill 20 would create an independent review process for health care providers to appeal claims denied by MCOs. Sen. Ralph Alvarado (R-Winchester), a physician and the bill’s sponsor, said that now when a claim is denied, medical providers have to repeatedly appeal to the MCO. If they continue to deny the claim, the provider’s only recourse is to go to court. Alvarado said some MCOs may use the denial process to help them avoid paying claims.

The senator said he based his legislation on laws from states where several of Kentucky’s MCO’s also operate. Aside from being a common sense way to conduct the review process, Alvarado argued his bill would not increase costs and would help insure against abuse.

One person who has seen many legitimate claims be denied is Nina Eisner, CEO of The Ridge Behavioral Health System in Lexington and chair of the Kentucky Hospital Association’s Psychiatric and Chemical Dependency Forum. She said MCOs reject claims on what she says are medically necessary services, which leaves the provider paying the bill.

Eisner said another problem is that many of the physicians who conduct medical necessity reviews for MCOs are not in Kentucky and therefore don’t understand the difficulty of accessing care in rural areas. She said MCOs Coventry and Aetna have 38 percent of their reviewers in the state, Wellcare has only 25 percent, and Anthem Medicaid has no reviewers in the commonwealth.

In her testimony, Eisner cited the case of an adolescent who needed in-patient psychiatric care. She told lawmakers there are “hundreds of such examples.”

There was some discussion from Sen. David Givens (R-Greensburg) and Sen. Tom Buford (R-Nicholasville) about clarifying who pays the costs when claims are appealed, but aside from some tweaking to the bill’s language, SB 20 passed with all in favor and is awaiting a decision in the House.

Follow @ReneeKET on Twitter for updates throughout the day, and for a recap of the full day’s activities, watch Legislative Update, weeknights at 11 on KET. You can also follow the Kentucky General Assembly on KET’s Legislative Coverage app for your smartphone or tablet.