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LOUISVILLE, Ky. (WDRB) -- One of Kentucky's Medicaid managed care providers wants to terminate its three-year contract with the state after only a year. Kentucky Spirit Health Plan said Wednesday it wants to end the contract as of July 5th of 2013. The state says the company, which offered the lowest bid, cites lost profits as the reason for ending the contract.
Kentucky Governor Steve Beshear said in a news release, "...we are disappointed in Kentucky Spirit's decision to break its contract. We have worked with the company to address its questions since Kentucky Spirit agreed on the contract terms last year."
Kentucky Spirit serves 140,000 clients and says it will help them make the move to another provider. Those clients can contact Member Services at (866) 643-3153 for more information.
Kentucky's Cabinet for Health and Family Services also promised that clients' health care will continue without interruption as they switch to another managed care organization. The state says Kentucky Spirit serves about 125,000 Medicaid recipients in 104 Kentucky counties.
The decision is expected to cut about 200 jobs in Lexington, amounting to $12 million in wages and benefits.
Three other contractors also provide Medicaid services to the state.
Kentucky Spirit is also filing a formal dispute with the state for damages.
The company says it came into the market in November of 2011 with the goal of, "helping the Commonwealth achieve a high-quality healthcare program at a significantly reduced cost for tax payers." But it says it has since decided, "that there is not a viable path to a sustainable Medicaid managed care program in Kentucky."
Cabinet for Health and Family Services Secretary Audrey Tayse Haynes said Wednesday, "I am deeply frustrated that this publicly traded, Fortune 500 company has chosen to put profits above people and will not honor the terms of its contract. The managed care model is working in many states and is working here in Kentucky."
In a news release, Kentucky Spirit boasted of its successes, including a 30 percent increase in well child visits, a 94 percent decrease in "doctor shopping" for narcotics, and a 30 percent reduction in pharmacy costs.