Senate OKs bill to limit companies running Medicaid program

FRANKFORT, Ky. (AP) — Urged to reduce Medicaid bureaucracy, the Kentucky Senate passed a bill Wednesday to limit the number of managed care organizations hired by the state to run its massive Medicaid program.

The bill cleared the Senate on a 29-7 vote and now heads to the House. It would allow the state to contract with no more than three of the outside companies.

The state currently has five managed care organizations handling most of the state's $11-billion-per-year Medicaid program. The bill reflects frustrations with those outside companies, which their detractors say cause higher administrative costs for health care providers.

“Let's reduce the bureaucracy," said Republican Sen. Stephen Meredith, the bill's lead sponsor. “We 'don't need five managed care organizations that bring no value to the system whatsoever. All they do is deny payment and delay payment, period."

Senate Minority Floor Leader Morgan McGarvey sympathized with those frustrations but said the bill won't fix the problems. The Democratic lawmaker said limiting the number of MCOs in state law “ties the executive (branch's) hands."

The bill is moving through the legislature at a time the state is seeking bids from outside companies for about $8 billion in Medicaid business.

Last year, Republican former Gov. Matt Bevin's administration awarded Medicaid managed care contracts to five companies. His successor, Democratic Gov. Andy Beshear, canceled the contracts, reopening the process.

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The legislation is Senate Bill 30.