Judge refuses to stop Kentucky Spirit from leaving the state, saying health cabinet has had plenty of time to prepare

A Kentucky Court of Appeals judge refused on Monday to stop Medicaid managed-care firm Kentucky Spirit from leaving the state on Friday, July 5. Chief Court of Appeals Judge Glenn E. Acree denied the Cabinet for Health and Family Services' emergency motion to require the company to stay through August.

Last week, a Franklin Circuit Court judge said  the state can't require Kentucky Spirit to keep serving Medicaid beneficiaries two months beyond its July 5 exit date. When filing the emergency motion last week, Cabinet officials said that if Kentucky Spirit leaves the state without a two-month transition plan, it will ?jeopardize the health? of 125,000 people.

However, Acree said the cabinet has had plenty of time to prepare for the company's departure, reports Beth Musgrave of the Lexington Herald-Leader. Furthermore, Kentucky Spirit said the state has refused to work with it to ensure an ?effective? transition, and Franklin Circuit Judge Thomas Wingate said last week that the state has ?been repeatedly cautioned by this Court to prepare for this contingency, and a lack of preparation at this junction does not warrant a grant of the extraordinary remedy of injunctive relief? requested by the state.

The cabinet argues that Kentucky Spirit did not communicate its intentions to leave, despite Wingate's May 31 ruling until the cabinet took Kentucky Spirit back to court earlier this month, reports Musgrave. However, Kentucky Spirit said in October 2012 that it was pulling out of Kentucky's managed-care system because it was losing too much money covering the 125,000 Medicaid enrollees contracted to the company.

So what will happen now? The cabinet has argued that the two other Medicaid managed care companies ? Coventry Cares and WellCare ? would take on the Kentucky Spirit beneficiaries and letters have been sent to Kentucky Spirit's clients and to health care providers.  A May ruling said Kentucky Spirit could face fines if it terminates its three-year contract before expiration in July 2014; Kentucky Spirit's appeal in that case is still pending. 

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