Healthcare Law Blog

Watch out MCOs--What to do with Medicaid Managed Care Organizations’ Payment Denials. Medicaid’s Findings of Alleged Overpayments—Relief?

With reported revenues in the billions of dollars and net profits not far behind, insurance companies providing a Medicaid Managed Care product are making huge profits on Kentucky’s Medicaid business.  Across the country, lawsuits are being filed that go so far as to allege that these Medicaid Managed Care Organizations (“MCOs”) have been unjustly enriched and have made fraudulent misrepresentations, as well as negligent misrepresentations to providers and their staff. WellCare, in particular, is the subject of a new action in Florida based, in part, on its Kentucky Medicaid business.  While these lawsuits create a very important way to address reimbursement issues, Kentucky providers have a new avenue to pursue claims against MCOs.  In April of 2016, the Kentucky legislature directed that health care providers have a process by which a Medicaid MCO’s final decision denying a healthcare service or claim could be reviewed and appealed.  Under the statute, providers could receive an independent, third-party review of denied Medicaid managed-care claims, as well as an administrative process for review. Prior to the new process in Senate Bill 20, the only avenue for appeal was to the MCO itself or through the Department of Insurance’s policy of reviewing claims regarding failure to make prompt payment, which was a process established by policy, not regulation.   Finally, in December 2016, the final regulations implementing the statute and providing the process for appeal were promulgated by Kentucky’s Department for Medicaid Services (“DMS”), making available long-awaited relief for health care providers facing denied claims from Medicaid MCOs.  More >