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Congressman Calls for Probe of Possible Medicaid Fraud by Coventry Cares

Medicaid insurance company Coventry Cares has attempted to end its contract with Appalachian Regional Healthcare (ARH). According to the Chicago Tribune, House Speaker Greg Stumbo has said that he believes the company’s actions border on Medicaid fraud and has called for an investigation of Coventry Cares and the company that operates it, Coventry Life and Health Insurance Co.

Congressman Stumbo has also reproached ARH, the largest health care provider in Eastern Kentucky, for suggesting that, if the contract were terminated, ARH would be required to reduce its force by 300 to 400 jobs through both reduced hours and layoffs. Congressman Stumbo has said that he sees no justification for ARH’s claims that so many layoffs would be needed.

ARH runs eight hospitals and other facilities, such as home-health agencies and clinics. Approximately 25,000 Medicaid beneficiaries living in Eastern and southeastern Kentucky are members of Coventry Cares.
Coventry Cares intended to cease payment for most services performed at ARH facilities as of Friday, but Kentucky officials ordered the company to continue paying for services performed at ARH facilities for the next thirty days. In the meantime, ARH and Coventry Cares have been court ordered to negotiate their differences.

Coventry Cares is one of the three insurance companies that offer managed-care services to elderly, poor, and disabled people under Medicaid throughout most of Kentucky. The state implemented this system last year, trying to save money.

Congressman Stumbo has expressed concern that Coventry Cares may have been using improper tactics to attract Medicaid patients. He expressed particular concern about whether Coventry Cares or either of the other Kentucky managed-care companies have offered potential members promises of “no-copay.” Allegedly, such inducements used to encourage Medicaid recipients to switch their coverage to a specific managed-care organization could be violating Kentucky’s consumer protection laws as well as bordering on Medicaid fraud.

On its side, Coventry Cares says that its contract has become too expensive to manage, that the company has been given more high-risk, costly patients, and that the state has not held all of the managed-care providers to the same standard. According to its spokesman, the company has requested a risk adjuster for managed-care organizations whose members are among the most sick and most costly patients to manage. Coventry Cares also denies any wrongdoing.

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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