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Health and Family Services Cabinet
Kentucky Awards Medicaid Administrative Agent Contract

Press Release Date:  Friday, August 19, 2005  
Contact Information:  Gwenda Bond or Vikki Franklin
(502) 564-6786

Kentucky Awards Medicaid Administrative Agent Contract
First Health Services will administer innovative component of Medicaid modernization

FRANKFORT, Ky. (August 19, 2005) Kentucky has selected First Health Services to administer the new Kentucky Health Choices program, the care management component of Governor Fletcher’s Medicaid modernization initiative.

“This innovative program will help us achieve the goal of Medicaid modernization—to bring Kentucky’s Medicaid program into the 21st century,” said Governor Ernie Fletcher. “Modernization is made up of three major components: benefit management, technology and care management. Kentucky Health Choices puts in place the third and final component of the necessary infrastructure to move Kentucky Medicaid forward.”

Under the terms of this five-year contract, First Health Services will administer policies set by the Kentucky Department for Medicaid Services (DMS) relating to provider and member education and case management and disease management. Kentucky Health Choices will also coordinate a new provider credentialing process consistent with private sector practices, peer review organization functions and a full-service call center.

“Given our experience helping states to improve the management of their Medicaid programs and reduce costs, we are eager to assist the state in implementing its innovative effort to reform the Kentucky Medicaid program,” said Teresa DiMarco, President of First Health Services.

Currently, the Kentucky Medicaid program covers more than 691,000 enrollees with an annual budget of $4.7 billion. Kentucky Medicaid is facing a $675 million shortfall in fiscal year 2006.

Over the past eighteen months, the Fletcher administration has focused on modernizing the Medicaid program, including benefit management and technology through contracts for a Pharmacy Benefits Administrator (PBA), also awarded to First Health Services, and a new Medicaid Management Information System (MMIS), awarded to EDS.

“Our Medicaid program as it exists is simply not sustainable,” said Mark D. Birdwhistell, Cabinet for Health and Family Services Undersecretary for Health. “Now that we have the three legs of our modernization footstool in place we can develop the care management approaches that will help protect services for our most vulnerable Kentuckians.”

Kentucky Health Choices will focus on improving the care for high-risk, high-cost patients, including long-term care and behavioral health patients, as well as individuals with special health care needs, through case and disease management. The program will also operate a 24/7 member services 800 number that will include access to a “nurse triage” medical advice call service to help members understand their illness and access appropriate levels of care.  Kentucky Health Choices’ aim is to reduce costs and improve health outcomes by promoting healthy lifestyles, managing the care of high-utilizing patients and minimizing inappropriate care.    



Last Updated 8/19/2005