Ohio overhauling $20B Medicaid program, but budget could pump the brakes

The DeWine administration’s overhaul of the more than $20 billion Ohio Medicaid program could halt under a budget amendment that would essentially restart the process.

Ohio Medicaid is already over two years into transforming its clunky bureaucracy and re-awarding billions of contracts with a new set of spending conditions, which should translate to better care for the 3 million Ohioans covered by the health insurance program for the poor and disabled.

The sweeping reforms range from stopping parents from having to give up custody when they can’t afford their child’s mental health care, slashing provider paperwork hassle and implementing long-demanded pharmacy reforms.

The new system is supposed to be in place early 2022.

But that could change because of the proposed state operations budget that just cleared the Ohio Senate. The budget now has an amendment that would prompt the state to give out Medicaid contracts under new rules -- most notably requiring that the contracts awarded lean toward companies based in Ohio with Ohio-headquartered parent companies.

“A couple of the Ohio companies, who for many years have been providing this service, and of course their employees and everyone else are here in Ohio, those folks were concerned what the process was and how it went forward,” Senate President Matt Huffman, R-Lima, said when discussing the Senate’s budget version, according to the Columbus Dispatch.

This would impact Paramount Advantage, which was one of the bidders based and headquartered in Ohio that just lost out on its bid to keep doing business with Ohio Medicaid. Paramount is operated by Toledo-based ProMedica and is appealing the decision.

Dayton-headquartered CareSource is another bidder also based in Ohio, but it won its contract.

It’s not clear what the proposed Ohio budget would mean for the locally based company, whose primary business line is its Ohio Medicaid contract. A message was left with a company spokesman.

The amendment drew criticism and concern from some of the people banking on an urgent overhaul.

One of the hallmarks of the new system will be a specialty program called OhioRISE to coordinate care for children with complex needs. Those incluss kids with significant mental health needs, who have sometimes spent time in foster care, in juvenile detention, or multiple other state systems.

Every year some Ohio parents choose to give up their child’s custody, sometimes returning an adopted child back to state care, because kids in state custody get all their expensive residential treatment covered. OhioRISE would help parents and children navigate these systems with experienced care coordinators and would cover residential treatment.

The Ohio Senate budget amendment does not call for a redo of the OhioRISE contract. But critics of the amendment noted the new overhauled system is full of interlinked programs that only work with the other parts in place, like how OhioRISE would be paid for with with savings from the other parts of the overhaul.

Lisa Norris, who has also been following the OhioRISE proposal, surrendered custody of her 12-year-old daughter on Tuesday in Franklin County because she had been unable to get the nearly $80,000 cash she would need up front to secure her daughter an open residential treatment spot. Norris said as an experienced special educator she knows the resources and there wasn’t another way to get her daughter care.

“I want no other family to ever have to sit in the court and make that decision yesterday because it’s devastating,” Norris said.

The DeWine administration’s overhaul is already underway. All the contracts awards have been announced and the administration did 18 months of pre-work before the bid, got feedback from 1,100 different people and organizations in the lead up to opening up bidding.

“The Department of Medicaid, from our perspective, spent a really incredible amount of time listening. They listened to providers they listened to consumers, they listened to families, they listened to stakeholders and advocates,” said Teresa Lampl, CEO with The Ohio Council of Behavioral Health & Family Services Providers, who is concerned the proposal could undo the work.

Pausing the overhaul would also pause the overhaul of Ohio Medicaid’s $3 billion pharmacy benefit system. The old system had been roiled in controversy over spending and transparency for years, and pharmacists had celebrated the incoming changes.

“The problem started in 2016, it didn’t see the light of day until the beginning of 2018. And here we are in 2021 with the ball on the tee to fix the problem, and this could throw a wrench into all of it,” said Antonio Ciaccia, pharmacy consultant with 3 Axis Advisors, who had lobbied for years for the changes with Ohio Pharmacists Association.

The new system is five contracts, which have already been awarded: one transparent pharmacy benefit manager instead of a handful of contractors; a central stop to get credentialed; a single clearinghouse for all provider claims and prior authorization requests; a new system to coordinate benefits for kids with complicated needs; and several large contracts for insurance companies to manage benefits and care.

The large contracts went to UnitedHealthcare, Human, Molina, AmeriHealth, Anthem and CareSource.

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