House Speaker Greg Stumbo sponsored the bill, with support from the Kentucky Hospital Association (KHA), in hope of improving the misunderstandings regarding Medicaid managed care and require private, out-of-state managed care organizations (MCOs) to pay the millions of dollars that they currently owe Kentucky hospitals for treatment given to Medicaid patients. The organization’s concerns were also echoed in the annual audit for the Kentucky government, which was released in early March. The state auditor, too, said that there needed to be better processes when it comes to the payments of Medicaid managed care.

“This is a significant issue for a number of our members,” said KHA President Michael
Rust in a statement. “Managed care organizations continue to deny payments to providers for services they have already provided to Medicaid patients placing a heavy financial burden on hospitals.”

MCOs and the Cabinet for Health and Family services did not favor the bill, voicing their concerns as well.

After vetoing the bill, the Governor pledged to implement a strategy for MCOs to reconcile what they owe to providers and for the Department of Insurance to conduct targeted audits of the MCOs. Rust indicated that if Beshear’s plan is successful, it is a step in the right direction, according to a statement.

Another decision that Beshear faces: the expansion of Medicaid coverage, which several state legislatures are considering after the Supreme Court allowed states to opt out of the Affordable Care Act’s Medicaid expansion. A report released in early March by organizations Kentucky Voices for Health and Families USA said the expansion would create 14,700 jobs and add $1.7 billion to Kentucky’s economy by 2016. Through 2022, Medicaid expansion would save the state up to $51 million in uncompensated care costs in which the state pays for uninsured people that can’t cover medical visits. The expansion would give about 399,000 Kentuckians affordable health care under an expanded Medicaid program.

“As a low-income state and a state confronted with profound health challenges, Kentucky cannot afford to pass up this historic opportunity to expand health coverage for its residents,” Regan Hunt, executive director of Kentucky Voices for Health, said in a statement. “Expanding Medicaid in Kentucky will also provide additional resources for local health care providers such as physicians, hospitals, pharmacies, home health agencies, and nursing homes. This means that more Kentuckians will have better access to quality care.”
 

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Led by Matthew McHugh, PhD, assistant professor at the University of Pennsylvania School of Nursing, the study found that increased nursing-to-patient staffing ratios and a good work environment for nurses could help reduce 30-day readmission rates for Medicare patients with heart failure, myocardial infarction and pneumonia.

The research team analyzed data from a cross-sectional survey of 20,000 registered nurses working at 210 hospitals in California, New Jersey and Pennsylvania, which questioned them about hospital work environment, nurse staffing levels and educational attainment. It also used data about hospitals’ structural characteristics, ownership, teaching status and size from the American Hospital Association Annual Survey and data on admissions and readmissions of patients between the age of 65 and 89 years old from state discharge abstract databases.

In compliance with the ACA, the Centers for Medicare and Medicaid Services will reduce payments to hospitals that have higher than normal readmission rates for patients with heart failure, acute myocardial infarction and pneumonia, which is why the team decided to focus on these three diseases.

After factoring in patient and hospital characteristics, the research revealed that nurse staffing levels and nurses’ work environment had a significant impact on readmission numbers for patients being treated for one of the three diseases. Plus, the percentage of nurses with baccalaureate degrees in nursing also had a significant effect on readmissions for patients with pneumonia specifically.

“Our findings indicate that improving nurses’ work environments and reducing their workloads can reduce readmissions for Medicare patients with common conditions,” McHugh said in a statement. “It is certainly worthwhile for hospital administrators to examine these two factors and explore whether they can be optimized to improve patient outcomes and reduce admissions.”

Each additional patient per nurse added to an average nurse’s workload had 7 percent higher odds of readmission for heart failure patients, 6 percent higher for pneumonia patients and 9 percent higher for myocardial infarction patients within 30 days of being discharged. Care in hospitals with good versus poor work environments for nurses had 7 percent lower odds of 30-day readmission for heart failure patients, 6 percent lower for myocardial infarction patients and 10 percent lower for pneumonia patients.

For those nurses that worked in hospitals with good work environments, 59 percent said they were confident that their patients could manage on their own when discharged, versus 48 percent.

The Princeton, N.J.-based Robert Wood Johnson Foundation Nurse Faculty Scholars program provided funding for the study.

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“Huge, huge cost increases were driving a greater percentage of people into the uninsured category every year,” Beebe told the Pew Center’s Stateline news service.

The governor launched his health care payment improvement initiative at the beginning of October, although the private insurance component won’t begin until January. The program essentially offers doctors financial incentives to improve their efficiency in providing care. The main difference between this plan and similar initiatives in other states is that Arkansas is applying the same billing rules and standards of care to Medicaid and private insurance companies. Medicare is also considering joining the effort. Medicaid has become known for paying its providers the lowest rates, creating a difference between it and private insurance. There is also a large variance between what doctors charge for treating patients with the same conditions from one hospital to another. The combination of these effects creates much financial uncertainty for hospitals, headaches for patients, and high costs for the state.

The new program takes dramatic steps to address several scenarios that tend to systemically lead to increased costs, with each type of insurance focusing on different areas. Medicaid and private insurers will now designate a doctor as the “principal accountable provider” for each time they treat someone who falls into one of these categories. Doctors will receive bonuses for keeping costs under specific thresholds or penalties when they exceed them by too much.

The situations that fall under the new law for Medicaid will include when a patient comes into the doctor’s office with a common cold, a form of attention deficit disorder, or for pregnancy, childbirth or perinatal care. The state’s two largest insurers, Blue Cross Blue Shield and QualChoice of Arkansas, chose perinatal care and hip/knee replacements, as those were the most costly conditions that affect large numbers of their customers. Blue Cross also singled out congestive heart failure for the program.

All doctors in the state received reports from Medicaid and insurance companies in June, informing them how their costs compared to counterparts in other states in the various categories. Doctors have also been informed about the range their costs must fall into over the next year to avoid penalty or gain rewards. This year, doctors will be given reports on the costs of all the services they order for patients, which will give them a much bigger picture of the financial impact. According to Pew, medical services provided directly by doctors account for only seven percent of all medical costs. Most of the costs come from the services that doctors order, which is also the area where they often have the least knowledge about cost.

There has been a large amount of controversy around the bill. The residents of Arkansas, and the larger medical community inside and outside the state will surely be watching the program closely to see if it has a place in the future of health care funding.

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