Centene breaks Medicaid contract with state, exits market

Centene is breaking its contract to administer Medicaid for Kentucky after only one year and calling out the state for failing to properly run the Medicaid managed care program.

Kentucky Spirit, the Centene subsidiary operating in Kentucky, said the state hasn't made the Medicaid system affordable for it and other private companies providing insurance. It also filed a formal dispute with the Kentucky Cabinet for Health and Family Services for damages incurred under the contract, reported the Associated Press.

The company reported a second-quarter net loss of $38.8 million, partly due to higher medical costs in Kentucky, which retroactively assigned members to the health plan, Business First reported.

Centene officials said it has tried to work with the cabinet to address its concerns about the Medicaid program, but discussions haven't resolved the differences. "Consequently, we do not believe there is a viable path to a sustainable managed-care program in Kentucky," Jesse Hunter, executive vice president of operations for Centene, said Wednesday in a statement. "As a result, we are in the unfortunate position of having to take steps to terminate the contract and exit the market."

But by terminating its contract with Kentucky, Centene may find itself fighting a lawsuit in the future, reported WFPL. "Kentucky Spirit is breaking their contract and that will end up in court, because they don't have a right to break their contract," Gov. Steve Beshear said. "There's a dispute system that's built into the contracts and they could have availed themselves to that. But there's no right to just arbitrarily quit and go home."

To learn more:
- here's the Centene statement
- read the WFPL article
- see the Business First article
- check out the Associated Press article