Court rules Kentucky Spirit must pay the state damages

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FRANKFORT, Ky. (AP) — The Kentucky Court of Appeals says a company that once managed 125,000 Medicaid recipients must pay the state damages for leaving the contract early.

Kentucky Spirit was one of three companies that initially handled the state's Medicaid claims when it switched to a managed care model in 2011. But the company decided to terminate the contract after one year. State health officials said the company could not leave before three years without paying a significant penalty.

Kentucky Spirit sued, and in 2013 a circuit court judge sided with the state. The company appealed that decision, but the Court of Appeals again sided with the state in a ruling Friday. The company could appeal to the Kentucky Supreme Court.

State officials said they do not know how much money the company would have to pay.

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