Kentucky Spirit to terminate Medicaid contract with state early; Cabinet assures recipients no interruption in service

Kentucky Spirit, a Medicaid managed-care provider, will terminate its contract with the state’s Cabinet for Health and Family Services a year earlier than scheduled, effective July 5, 2013. The company serves approximately 140,000 Medicaid recipients in 104 Kentucky counties. According to the CFHS, Kentuckians enrolled in Kentucky Spirit coverage “will continue to receive health care with no interruptions, and the Cabinet will ensure a smooth transition for those patients to another managed care organization in the coming months.”

Kentucky Spirit said in a statement Wednesday that it is committed to helping its clients it serves transfer to one of Kentucky’s three other Medicaid contractors. In addition, the move will cut some 200 jobs in Lexington, representing $12 million a year in wages and benefits.

The Courier-Journal‘s Tom Loftus writes that Kentucky Spirit has been in months of discussions with the Cabinet for Health and Family Services about its contract. The company also said it has filed a formal dispute with the cabinet for damages it has incurred throughout the process. Gov. Steve

Beshear issued his own statement informing the company that the state “will hold this company accountable to its contractual commitments through whatever means necessary on behalf of both the members and the taxpayers.”

Overall, Kentucky’s transition to Medicaid managed care has not been smooth, explains the Lexington Herald-Leader’s Beth Musgrave. Many doctors, hospitals and other providers have complained about late payments and cumbersome reimbursement processes; some of which have had to be resolved in court.

To see the Kentucky Spirit statement, go here.