The state chose CareSource and five other insurance companies for a massive contract to manage benefits for the $20 billion Ohio Medicaid program.
These contracts announced Friday are the largest the state has ever issued, and the rules for how the money is spent is one of the most influential policy tools the state has. The contracts are the main business line for Dayton-based CareSource, one of the largest area employers.
The new system is intended to overhaul clunky bureaucracy and make the health insurance program more user friendly for the 1 in 4 Ohioans covered.
“This is a bold, new vision for Ohio’s Medicaid program — one that focuses on people and not just the business of managed care,” Ohio Medicaid Director Maureen Corcoran said.
Ohio Medicaid aims to launch the new system in early 2022. Any company that wants to protest the decision will need to file a protest by April 23.
CareSource and the other insurance companies working with Ohio Medicaid were asked to refer requests for comment back to the state.
The contracts announced Friday are preliminary because they are not signed yet.
It’s not clear yet how the new system will impact CareSource’s core business — managing 1.3 million Ohioans’ Medicaid benefits — compared to the old system or whether CareSource will lose market share.
Ohio Medicaid covers 3.2 million people with low incomes or certain disabilities, including more than 412,000 people in the local nine-county region. About 90% of Ohioans who are covered by Medicaid don’t have their benefits managed directly by the state government. Instead, people get an insurance plan managed by insurance companies like CareSource.
Nearly half of Ohio children, half of Ohio births and the majority of nursing home care is covered by Medicaid. By rebidding the contracts and resetting the conditions for how the money gets spent, the DeWine administration is trying to engineer better outcomes for the different Ohioans with Medicaid.
Some examples of these changes include that providers will be able to work out one Medicaid contract, instead of having to broker deals with all the different Medicaid plans. Claims billing and prior authorizations will be processed through a single system instead of with each plan individually.
Loren Anthes, who researches Ohio Medicaid for Cleveland-based Center for Community Solutions, said providers can get bogged down in all the paperwork and redundancy that can come with Medicaid payments.
“By simplifying things, streamlining them administratively, means doctors and nurses and other folks who are serving the Medicaid population can focus more on delivering care, rather than appropriately managing the red tape,” Anthes said.
In addition, some of the changes include:
- A new separate program will help kids with lots of behavioral health needs and help their families navigate the different systems their child gets services from. Aetna will manage this new separate program.
- Insurance plans like CareSource must contribute 3% of annual profits to community reinvestment, and that number eventually increases to 5%.
- Ohio’s Medicaid plans will work with a single company that will transparently manage pharmacy benefits.
- There will also be provider advisory councils so that providers can be heard by the insurance companies.
Jim Tassie, Ohio Medicaid deputy director, said the department wants insurers in the new system to work together, “not competing against each other by offering certain bonuses or trinkets,” but instead working for a holistic, collective impact on the Medicaid population.
Along with working more with each other, Tassie said the insurance plans will work more with community organizations.
“One of the things that we learned from many of our members is they turn to their community organizations, whether it’s their community action agency or a federally qualified health center or even their primary care provider. Those are the folks to whom they look to get guidance on their health care,” Tassie said, adding that this is part of the reason why the insurers have to give some of their profits back to the community.
The new program will be carved up among six insurance companies with the possibility of a seventh.
Along with CareSource, others selected were UnitedHealthcare, Humana, Molina Healthcare, AmeriHealth Caritas, and Anthem Blue Cross and Blue Shield.
Centene’s subsidiary Buckeye Community Health Plan could potentially be added to the program as a seventh but the department wrote that it is “deferring for additional consideration” on that decision. Centene is currently contesting a lawsuit filed by Ohio Attorney General Dave Yost.
When the state was deciding who to award these contracts to, they gave each of the bidding insurance companies a score and CareSource scored the lowest. UnitedHealthcare scored the highest.
Some people in the Dayton-area with Medicaid are covered by one of the insurance plans that lost their bid.
Members will continue to receive services with their current managed care plans until the transition in early 2022 and will not lose coverage. Members will have the opportunity to select a new plan during the 2021 open enrollment period later this summer. If members do not select a plan, one will be automatically assigned to them.
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