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The right model for Kentucky

Medicaid in Kentucky

Over the past decade, Kentucky’s Medicaid program has evolved into a modern, patient-centered program that serves over 1.6 million Kentuckians. As part of this model, MCOs coordinate healthcare services for nearly 9 in 10 of all Kentuckians enrolled in Medicaid.1

Kentucky’s Medicaid program provides healthcare to individuals facing economic and social barriers, as well as expanded benefits and services to improve their health and wellbeing. In Kentucky, that population includes 2 in 3 nursing home residents and 3 in 7 individuals with disabilities.2

9 in 10

Kentuckians enrolled in Medicaid covered by managed care

Higher quality care

Improving population health


MCOs empower members to engage with their own healthcare, providing educational information and support for preventive services. This approach has helped improve several key health metrics in Kentucky.

MCOs are helping to address the opioid epidemic by working with providers on prescribing practices and instituting checks to curb the abuse of opioids among Medicaid enrollees. For example, MCOs in Kentucky are helping to facilitate access to medication-assisted treatment (MAT). MAT is the use of medications, in combination with counseling and behavioral therapies, to provide a holistic approach to treating substance use disorders.4

In 2019, Kentucky’s Medicaid program had 55 MAT prescriptions for every 100 opioid prescriptions, far above the nationwide ratio of 35 MAT prescriptions per 100 opioid prescriptions.5

Standards of care

Competitive procurement, strong contract requirements, accredited metrics

Unlike the fee-for-service model, the managed care model is measured against specific quality standards at both the federal and state level. MCOs are accredited and regularly reviewed by state agencies as well as the National Committee on Quality Assurance (NCQA) using up to 69 quality measures.6

In Kentucky, agencies like the Cabinet for Health and Family Services closely analyze health data, consumer assessments, and other metrics to make sure that MCOs are providing the highest quality care.7 These agencies also partner with MCOs on ways to improve health outcomes in the state while simultaneously providing competition and choice for recipients.

Between 2016 and 2019, Kentucky MCOs improved their average score on 75% of individual quality measures.8

Managing costs and risks

Delivering transparency and predictability for Kentucky

With managed care, states pay a fixed, per-member, per-month rate, which allows them to budget with transparency and predictability. If the cost of care exceeds the original funding amount, MCOs assume full financial responsibility for any overages. This structure incentivizes MCOs to improve population health which keeps the focus on the quality and value of care.

The managed care model promotes general wellness to prevent serious illness; focuses on prevention to avoid costly medical expenses; and encourages relationships with primary care physicians in lieu of emergency room visits.

Kentucky’s administrative efficiency ratio ranks in the top 10 nationally, with more than 90% of every Medicaid managed care dollar spent directly on healthcare services for Medicaid members. In 2019, Kentucky’s managed care approach translated to overall Medicaid savings of $1.2 billion to $1.7 billion and between $219 million and $310 million in savings for the state’s share of its Medicaid costs.9

Preventing fraud, waste, and abuse

In 2019, the managed care model had a national Medicaid improper payment rate of 0.04%, compared to the fee-for-service model rate of 13.90%.10 With states facing unprecedented care and economic pressures in the midst of a pandemic, the managed care model delivers critically needed stability to millions and strengthens our country’s Medicaid health safety net.


in savings in 2019

Patient experience

Treating the whole patient

MCOs can help treat patients holistically, serving as the glue that binds community resources with integrated physical and mental health services. This approach helps to improve the patient experience, and in 2019, 82% of adults in Kentucky rated their health plan an 8/10 or higher.11

MCOs use information technology and real-time data analysis to develop a comprehensive picture of the member. This approach can help address potential health issues early, like decreased leg circulation as a result of advanced diabetes. After implementing Medicaid managed care, Kentucky saw a 17% decrease in amputations due to untreated diabetes.12

MCOs also help address the social factors that can affect health. Nationally, 77% of MCOs report supporting housing activities, 73% report supporting nutrition activities, and 51% report supporting education activities that aid the Medicaid population.13 Unlike the fee-for-service approach, the managed care model is built to bring together disparate parts of the delivery system.

Helping Kentuckians through the COVID-19 pandemic

MCOs have played a critical role meeting the needs of Kentuckians throughout the COVID-19 pandemic. Through advanced data modeling and analytics, MCOs have conducted outreach to at-risk individuals and ensured lifesaving measures like early testing, continued routine care, extended refills, and access to the vaccine.

MCOs are especially focused on supporting underserved inner city and rural populations, helping to vaccinate the Medicaid population through efforts such as:

  • Transportation coordination for plan members.
  • Homebound vaccination visits.
  • Follow-up on second dose appointments based on claims data.
  • Multi-channel outreach to MCO enrollees via calling, texting, and mailing information.
  • Gift card incentives ranging from $25 to $100 to encourage individuals aged 12 and older to complete vaccinations.14

Provider experience

Helping Kentucky providers

MCOs use value-based payment models that incentivize, empower, and reward providers for the quality of care. MCOs also help maintain strong provider networks and offer clinical support, continuing education, and technological innovations that enable providers—especially rural providers—to deliver higher quality care.

Due to the flexibility of the managed care approach, MCOs can provide relief payments to support providers in times of crisis. During COVID-19, MCOs are providing advanced payments to providers (separate from the CMS payment program) and advocating for additional federal action that can ensure critical support to providers during this pandemic.15