A proposed state initiative for Kentucky’s Medicaid program has officials optimistic that the measure will reduce costs and improve care for patients on Medicaid.

The state Cabinet for Health and Family Services has released a Request for Proposal asking managed care organizations to bid for control of health care services for eligible Medicaid patients.

Proposals are due May 25, and the state hopes to initiate the program by July 1.

The state is seeking this approach to managing Medicaid as a way to drive down costs and improve the coordination of care.

“We believe this is the right move to deliver appropriate, efficient, economical and effective care to Kentucky’s Medicaid population,” acting state Medicaid Commissioner Neville Wise said in a statement.

More than 800,000 Kentucky residents are on Medicaid. Estimates from 2006 by the Foundation for a Healthy Kentucky indicated that 23 percent of the Barren River district population was enrolled in Medicaid.

Dennis Chaney, director of the Barren River Area District Health Department, said he is not anticipating a “tremendous amount of change” to the fee-for-service arrangement that health departments have in place for clinical services offered under a new Medicaid managed care system.

“With health departments continuing to participate in the fee-for-service arena, we will continue to pay our match and get the reimbursement rates we’ve always gotten,” Chaney said.

Chaney said one of the goals of a new Medicaid managed care program would be to improve health outcomes for Medicaid patients based on the Healthcare Effective Data and Information Set, a set of performance measures used by managed care providers.

“I’m confident that probably any managed care organization who would be making an application would include those HEDIS measures,” Chaney said.

State officials are looking for improvements in health care outcomes for Medicaid patients in the areas of diabetes, oral health, prenatal care, coronary artery disease and colon and cervical cancers.

Chaney said the managed care organization structure that the state wishes to employ is similar to what was attempted on a smaller scale in the 1990s in Louisville and the surrounding area.