Dayton-based insurance company CareSource is adding a new business to its roster.
The company plans submit a bid to the U.S. Department of Defense to provide clinical services to the military through CareSource’s new subsidiary, CareSource Military and Veterans.
“Much of what CareSource has been doing in recent years has positioned us to make moves that will help us grow our mission in areas where we know we can make a difference,” said Richard Topping, chief legal officer at CareSource.
“Both Congress and the Department of Defense have laid out a goal of utilizing high quality, innovative, and cost-effective industry best practices to improve quality of care for Department of Defense beneficiaries. CareSource can answer that call.”
CareSource, which administers one of the nation’s largest Medicaid managed care plans, is one of the largest employers the Dayton area, with about 3,000 employees here and about 4,500 total. CareSource anticipates that growth will continue if it enters the defense sector.
“We would be growing both through one or more acquisitions of defense contractors and by scaling up, hiring staff as needed to meet the responsibilities of our new contract or contracts,” Topping said.
CareSource estimated a 2019 direct economic impact in the Dayton of $438.3 million, with an additional indirect impact of $175.7 million, according to its 2021 stakeholder report. The U.S. Department of Defense’s fiscal year 2023 budget request includes $37.2 billion for the Defense Health Program, or 4.8% of its $773 billion total budget request.
“We see this as a fantastic opportunity for growth for both CareSource and for Dayton,” Topping said about its new subsidiary.
In 2020, CareSource received capital investments from Welsh, Carson, Anderson & Stowe, and the private equity firm became a minority owner of CareSource Management Services. CareSource has since expanded services to additional states. CareSource covers 2 million people in Georgia, Indiana, Kentucky, Ohio, and West Virginia. It is also part of a team offering services in Arkansas for people with developmental disabilities.
“CareSource has a sizeable veteran and active-duty population in each of the states it supports and recognizes the unique needs and care of veterans, active-duty service members and their families,” Topping said. “CareSource has also built an expertise in navigating government programs and partnering with the public sector to accomplish what is needed for our members.”
In August, CareSource announced it would also be serving Medicaid members in Mississippi as part of its partnership with TrueCare, which is owned by nearly 60 Mississippi hospitals and health systems.
Then it announced plans in September to make a bid to service Medicaid customers in Texas. CareSource Iowa Co. also submitted a bid to serve Medicaid members in Iowa, but its proposal was not accepted, according to the Iowa Department of Health and Human Services.
CareSource currently provides clinical services through its subsidiary company The Columbus Organization.
CareSource reported an $11.2 billion gross revenue in its 2021 stakeholder report, which was up from its 2019 gross revenue of $10.6 billion. The company’s 2021 stakeholder report said 9.7% of costs went to administrative costs, which was up from 8.3% in the 2020 stakeholder report. In 2019, the company also reported an operating margin of $82.1 million.
Topping said the company is focused on growing through one or more acquisitions of defense contractors that will be bidding on the Department of Defense’s Medical Q-Coded Support and Services (MQS) contracts coming up for re-procurement. If they are successful in entering this space, it should happen within the next 12 months.
“CareSource is encouraged by this opportunity and looks forward to this and other ways we can support military, veterans and their families in the future,” Topping said.
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