Medicaid managed-care firm files suit, alleging the state’s rush job resulted in unreliable financial information for bidders

Medicaid managed-care company Kentucky Spirit alleges in a lawsuit filed Monday that Gov. Steve Beshear so hurriedly privatized the service last year that he gave incorrect cost information to the bidders. The company said it relied on the bad information and thus has lost $120 million since its work began a year ago.

John Cheves of the Lexington Herald-Leader reports that Kentucky Spirit had hoped that it could let its contract terminate a year earlier than scheduled without paying the damages that Health and Family Services Secretary Audrey Haynes has now said the state will pursue. Cheves writes that Kentucky Spirit says they relied on a “data book” — what managed-care companies used to estimate costs in their bids — prepared by the accounting firm PricewaterhouseCoopers. (Read more)