Additional Details About Separation of UofL and KentuckyOne Health Emerge.

Much remains to be worked out.  University of Louisville Hospital Profitable but CHI and KentuckyOne Health suffering major financial losses.

Claimed to be effective as of Dec 14, an initial document initiating the separation and anticipated divorce of the University of Louisville and KentuckyOne Health became available today, December 22.  Given the complexity of the existing contractual partnership and some earlier hints of marital conflict, the 3-page document submitted as an amendment to the original Joint Operating Agreement (JOA) is surprisingly both short and bland.  The principal function of the amendment is to change the term length of the original agreement from 20 years to an ending date 6 months away on June 30, 2017 at which time University Medical Center, Inc. (UMC) resumes its pre-marital control of the entirety of University of Louisville Hospital and the James Graham Brown Cancer.  It is obvious that many consequent details remain to be revealed or worked out. Indeed, the document anticipates that additional counterparts to the amendment will be added.

A 6-month wind-down period for one spouse to leave the house in an orderly manner is specified by the conflict resolution agreements of the JOA.  Although not specifically mentioned in the amendment, the change of termination date triggers a cascade of other important actions of which the most important is that the complex interlocking operational Academic Affiliation Agreement (AAA) also becomes void on June 30.  A new AAA has been prepared well ahead of schedule.  It has reverted to a traditional Affiliation Agreement used between UofL and its hospital partners and returns control of all academic, clinical, educational, research, financial, and hopefully ethical matters back to the University where such belongs.  Hooray! Continue reading “Additional Details About Separation of UofL and KentuckyOne Health Emerge.”

Update On The Rising Prices of Insulin Between 2013 and 2016.

Earlier this month I published a survey of the cost of insulin to the Medicaid and Medicare programs of Kentucky and the nation.  Fully 9.1% of the total cost of Kentucky’s outpatient Medicaid drug program went to pay for the several brands of Insulin still available. It was obvious that some brands cost a lot more per prescription or claim than others and that the most expensive brands were prescribed most often!  I used this critically important drug as an example of how the market for prescription drugs in America is badly broken.  Since then I stumbled on two additional federal databases that provide additional insight into how much these drugs cost at the local pharmacy counter where the rubber hits the road. These are federal surveys that determine the National Average Retail Prices paid by the consumer (NARP), and the National Average Drug Acquisition Cost (NADAC) for the pharmacy.  Both these programs provide data at the cost per milliliter level, and otherwise facilitate apple-to-apple comparisons of the different brands.  In brief, the additional data confirm that in 2013, for the same size bottle, the newer insulin analogs cost 71% more than the older “human” insulins.  By 2015, all prices had increased; some substantially.  Valuable information about the retail prices of drugs is being kept from public inspection. Continue reading “Update On The Rising Prices of Insulin Between 2013 and 2016.”

Soaring Insulin Prices Highlight Broken Pharmaceutical Policy.

Just business– or greed?  You be the judge.ky-medicaid-insulins-2015-treemap-lg

Discovered and patented almost 100 years ago, insulin is a critical drug for the treatment of both childhood Type I and adult onset Type II diabetes mellitus.  Diabetes is a costly disease for our society in more ways than one.  In 2015, the cost to the Kentucky Medicaid program for insulin alone annualizes to $101.8 million.  Insulin consumed 9.1% of Kentucky Medicaid’s entire non-hospital drug expense while making up only 1.1% of all prescriptions.  In 2013, the last year in which Medicare Part-D drug utilization data are available to me, insulin consumed 7.3% of total Medicare reimbursement for drugs in Kentucky costing a total of $141.8 million.  In both federal programs, insulin consumed a larger portion of the drug budgets in Kentucky than nationally.  A review of several reasons why insulin has become so expensive illustrates what is very wrong with our national drug policy. Continue reading “Soaring Insulin Prices Highlight Broken Pharmaceutical Policy.”

Big-Change or No-Change in Post-Election Kentucky Healthcare?

I have been out of the country these last two weeks and am trying to catch up. Perhaps the biggest news item while I was away happened just as I left town – the election of Matt Bevin as our next Governor.  I had only just learned of this fact when I was contacted by an out-of-state reporter who asked whether people in Kentucky who gained coverage through Medicaid expansion or through our KYNECT state insurance exchange should be concerned.  If so, why would people who only so recently obtained healthcare coverage vote for Mr. Bevin – as they obviously must have in winning fashion?

Of course they should be concerned!
I responded that based on Mr. Bevin’s campaign promises and comments alone, as reported by our local press, current KYNECT and Medicaid expansion recipients have every reason to worry about their future coverage and access to healthcare.  I would certainly worry if I were in their shoes and not the satisfied Medicare beneficiary that I am.  In the heat of the campaign, and to appeal to virulent anti-Obama haters, Tea-Partiers, and other conservative voters; Mr. Bevin unequivocally promised to undo as much as possible of the Affordable Care Act (ACA) implemented in Kentucky by Governor Steve Beshear.  At least that is what I heard.

Real promises or campaign maybes?
Campaign promises included unwinding Kentucky’s successful KYNECT insurance plan, or switching it from a state-run plan to a federal plan.  It also seemed clear to me that Mr. Bevin promised to end or roll back the Medicaid expansions that have numerically provided the most coverage to previously uninsured Kentuckians. (Mr. Bevin later apparently hedged his promise to something short of a full roll-back.)  Much was made during the campaign of Mr. Bevin’s possible confusion of Medicare and Medicaid, and statements about whether beneficiaries of publicly-financed healthcare should be required to submit urine tests for illegal drugs.  I took some of this to be red-meat stuff thrown Trump-style by both parties to their admiring crowds.  I would rather see Governor-elect Bevin improve what we have rather than walk away from it solely to satisfy his political base. Continue reading “Big-Change or No-Change in Post-Election Kentucky Healthcare?”

New Medicaid Managed Care Providers for Kentucky.

But only for new beneficiaries and not in Region 3?

Significance to Norton-UofL dispute over pediatric care.

We have been waiting for these next shoes to drop. The Commonwealth of Kentucky has announced its award of new contracts to three Medicaid Managed Care Organizations (MCOs) to provide services to new Medicaid beneficiaries in the 104 Kentucky counties not in Region 3. The contracts went to: Anthem of Kentucky (a division of Wellpoint that is an entirely different company from WellCare), Humana, and Passport (University Health Care, Inc.). These additions come just ahead of the major expansion of Kentucky Medicaid resulting from the federal Patient Protection and Affordable Care Act, known affectionately to some as Obamacare. Some 300,000 new beneficiaries will be added to the current 715,000 beginning January 2014. Continue reading “New Medicaid Managed Care Providers for Kentucky.”

Passport Takes Further Commanding Lead in Region 3 Medicaid Managed Care.

Who is getting paid for what? Why should we care?

Some months ago I reported on the shifting enrollments of Medicaid Managed Care beneficiaries among the four Managed Care Organizations (MCOs) in Region 3, which includes Louisville and a few surrounding counties. Although the initial assignments by the state gave roughly equal numbers of beneficiaries to each of the MCOs selected to do business in the Region, Passport was able to leverage its previous home-court, sole-source advantage; and cooperation from its existing participating providers to recapture the lion’s share of patients from its new competitors. In this installment, I show the final enrollment figures as of April 2013 when the relatively unfettered ability of a member to change from one plan to another expired. The big winner continues to be Passport which expanded its Region 3 market share to 75% compared to 64% early last February.

enrollment-april2013

Medicaid Managed Care was reintroduced elsewhere in the state in January 2012. In little more than a year, the distribution of enrollees outside Region 3 shifted to favor two of the three MCOs. (It didn’t help that one of the MCOs has already expressed interest in leaving the state.) Competition, as opposed to cooperation, produces winners and losers. The hope (and it remains a hope) is that patients will come out winners. I present some enrollment figures below as well as the rates paid by the state to the MCOs to cover the care of beneficiaries. A table of the data can be downloaded here.

Continue reading “Passport Takes Further Commanding Lead in Region 3 Medicaid Managed Care.”

Passport Medicaid Health Plan Winning Majority of Medicaid Beneficiaries.

reg3-enrollfeb-graphRegion 3 of Kentucky’s Medicaid system, comprising Jefferson and nearby counties, is in the throes of a major reorganization. Beginning January 1, the previous monopoly to provide Medicaid services held by a consortium of providers organized by the University of Louisville was withdrawn. State contracts were offered to three additional Medicaid Managed Care Organizations (MCOs). The timing of this major change was not the most felicitous, given that the statewide Medicaid managed care system newly put in place January 2012, could be said sympathetically to be in chaos. Medicaid managed care has been operational in Region 3 for several years and was providing acceptable clinical services, albeit under a cloud of abusive if not illegal management by its UofL-controlled financial administration. (One might say it was used as a slush fund. No one went to jail, but people lost their jobs and a major reorganization was demanded by the state.)

Given that the new contracts and procedures in Region 3 are essentially the same as those now used statewide, it is instructive to see how things have been going in the rest of the state. Alas, the precedents are not rosy. “Medicaid-Meltdown” is a term that is frequently being used. The rocky start may be one of the reasons the state is withholding its approval of expanding the Medicaid program under the new federal Accountability and Affordability Act to provide more Kentucky individuals health insurance coverage. In that regard, an interim report funded by the Foundation for a Healthy Kentucky and prepared by the Urban Institute and the University of Kentucky is receiving much attention nationally and is relevant to Region 3’s future. (Click the “Medicaid” category link in the left column of the Blog home page for available earlier comments.) Continue reading “Passport Medicaid Health Plan Winning Majority of Medicaid Beneficiaries.”

A Grenade Explodes in Jefferson County’s Medicaid Managed Care.

Look for something better to rise from the rubble.

Earlier this week, my friend and colleague Terry Boyle of Insider Louisville gave us all a heads-up that the Kentucky Medicaid Cabinet would be announcing the results of its search for additional Medicaid Managed Care Organizations (MCOs) to operate in Kentucky’s Region 3 in Jefferson and surrounding 15 counties. This prediction was spot-on. Today the Commonwealth announced it had finalized contracts with four MCOs that will begin services January 1, 2013. This is big news, and must have been a terrible disappointment for Passport and the University of Louisville.

Passport has been operating under a special Federal dispensation that permitted it to have a monopoly for the past 15 years to provide clinical care to Medicaid beneficiaries in region 3. For reasons not entirely known to me (but that I can guess) that privilege has been revoked. In less than three months, Passport will be joined by Coventry Cares, Wellcare of Kentucky, and Humana. No doubt there is much scrambling going on to assemble provider networks of hospitals and healthcare workers. Coventry Cares and Wellcare already have statewide networks of Medicaid providers, and Humana has extensive local private and Medicare networks that it may be able to call into service for Medicaid beneficiaries. In fact, Passport is lucky it has not been asked to provide a statewide network as previous MCOs were required to do. This would likely have sunk Passport and seems to me to be a major concession to them. Continue reading “A Grenade Explodes in Jefferson County’s Medicaid Managed Care.”

Big News Day Yesterday!

Is the University of Louisville losing its grip on the messages?

Yesterday was a big news day for most of the threads that this policy blog has pursued over the last few months. You can follow the discussion by using the Topic Links below or at the right. The thing that ties them together is the involvement of the University of Louisville which has vested interests in the outcomes. Continue reading “Big News Day Yesterday!”

Governor Beshear Releases Critical Report on Passport Medicaid Managed Care.

Louisville’s Passport loses its Medicaid Monopoly.

Why is it, whenever the bright light gets turned on, that the University of Lousiville doesn’t look so good? Last month, a friend reported some doctors lounge gossip that the University folks were all in a tizzy over some breaking event related to Passport or indigent care. With the announcement of the release of the highly critical review by State Auditor Edelen of the University’s management of the Quality Community Care Trust which provides public money for indigent care University Hospital, I thought I had an explanation. Continue reading “Governor Beshear Releases Critical Report on Passport Medicaid Managed Care.”