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Managed Care Official Criticizes Kentucky's Approach to the Medicaid System

The CEO of a major Medicaid managed care company (MCO) is criticizing Kentucky for the way the state deals with businesses like his.Michael Neidorff is the CEO of Centene, which operates Kentucky Spirit, one of three statewide MCOs that has managed Medicaid patients for the state since last year.In a recent call with Wall Street investors, Neidorff criticized Kentucky officials and the mindset they have about what managed care can do for the state.“I’ve never seen a state where they’re thinking more about the surplus they’re booking rather than the sustainability of the program,”  he said.Governor Steve Beshear began the move away from state-run Medicaid and to a managed care system in Kentucky two years ago to help shore up a gap in the state's Medicaid budget. But the system has been plagued with problems since its roll-out. Among other issues, Kentucky Spirit has fought with the state and doctors and hospitals over reimbursement rates. Beshear has maintained that the program will work and reports so far indicate the state has been saving a significant amount of money.The call also revealed that Kentucky Spirit had originally bid and initially accepted a contract to run Medicaid in the Louisville region, which is currently up for bidding. But Neidorff said because the state was unwilling to change some terms, Kentucky Spirit dropped out of the bidding."They asked us to come and negotiate a contract and we said we would sit down with them but these things were on the table. And when we got to those discussions we didn’t see them making those changes so we voluntarily withdrew our bid for region 3, so we’re not going to participate,” he said.The Louisville contract is expected to be finalized soon, since new MCOs will be required to start providing service next year. 

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