Schweitzer administration considering whether to hire private firm to manage part of Medicaid

2010-10-13T16:47:00Z 2010-10-14T01:55:22Z Schweitzer administration considering whether to hire private firm to manage part of MedicaidMIKE DENNISON Gazette State Bureau The Billings Gazette
October 13, 2010 4:47 pm  • 

HELENA – The Schweitzer administration is considering a test run of having a private, managed-care firm run Medicaid, the state’s $900 million health care program for the poor.

Top state health care officials confirmed late last week that they’re preparing a possible request for companies to bid on a contract early next year to manage Medicaid in a five-county area that includes Helena and Great Falls.

Anna Whiting Sorrell, director of the state Department of Public Health and Human Services, said the managed care “demonstration project” would cover all Medicaid patients in the five-county area. The program could save money and improve health care quality for patients, she said.

“We know that other states are doing it; we’re trying to figure out how it would work in Montana,” she said.

Sorrell emphasized that the discussion is “very preliminary,” that no final decision has been made, and that federal health officials must sign off on the project, because the federal government funds at least two-thirds of Medicaid.

However, agency documents obtained by the Gazette State Bureau include a timeline that calls for putting out the contract for bid in January, signing it by next summer and implementing the project in January 2012.

Department documents also reveal that state health officials have been talking for more than a year about expanding private managed-care of Medicaid, including a proposal from Centene Corp., a St. Louis-based managed care firm that operates in several Midwestern and Southern states.

Centene, a $4 billion company that has a claims-processing center in Great Falls, submitted a detailed proposal in August 2009, to extend private managed care of Medicaid across the state and to many of the program’s 90,000-plus Montana patients.

A memo from a top state Medicaid official this August expressed strong doubts about the proposal, which Centene said could add jobs in Great Falls, improve the quality of care for patients, maintain “fee schedules” for hospitals and physicians — and save the state anywhere from $10 million to $26 million a year.

Yet sources told the Gazette State Bureau that Gov. Brian Schweitzer directed health officials to pursue managed-care options for Medicaid.

Sarah Elliott, spokeswoman for the governor, said Tuesday that he had asked the health department “to move forward exploring ideas where citizens can best access the complicated health care industry,” and that can save taxpayer money and provide “better health outcomes.”

Deanne Lane, a spokeswoman for Centene in St. Louis, said Tuesday that the company employs nearly 200 people at its Great Falls center and “welcomes any new opportunities as we continue to improve health outcomes while saving states valuable resources.”

Under managed care, a private firm would take over management of part of the Medicaid program, receiving a set amount of government money to provide services to eligible patients.

Through arrangements with patients and health care providers, such as hospitals, physicians and nursing homes, the company would “manage” care with an eye toward routing patients to lower-cost services, thus saving money. The company gets a cut of the savings.

Medical providers that would be affected by any change said this week that they have not been consulted by the Schweitzer administration, and that the state’s possible move toward more managed care of Medicaid is a surprise.

“We’re kind of in the dark on what the governor’s office is thinking,” said Bob Olsen, vice president of MHA, which represents most of the hospitals in the state. “There’s been no communication at all. ... The only thing I can say is that we would be very interested in seeing the details of what they have in mind and how this might work.”

State Sen. Dave Lewis, R-Helena, also said the administration should consult with the Legislature on such a significant policy move, because saving money on managed care of Medicaid would mean less payments to health care providers, less care for patients, or both.

“If you’re going to take that much money out, who’s going to get less money?” said Lewis, vice chairman of the Senate Finance and Claims Committee. “They still don’t have an answer on that one.

“Everybody deserves a lot more information, the Legislature and the public. If they’re going out on in January (with the contract), they’re kind of fast-tracking it.”

The demonstration project considered by the department would cover Medicaid patients in Lewis and Clark, Cascade, Chouteau, Teton and Judith Basin counties.

Sorrell said the area offers a good mix of urban and rural populations, to see how managed care would work in both settings.

The department is reviewing the plan now, will decide soon whether to proceed, and plans to bring providers and others into the discussion, she said.

“Once we complete our review, we’ll be working closely with the providers and with the people who count on us to get their health care,” Sorrell said.

Sorrell said Centene Corp. contacted her agency last year about expanding managed care of Medicaid, but that since then, the state has spoken with other companies. But now that the state is considering putting out a managed-care contract for bid, “we’ve stopped those conversations,” she said.

In July, the Washington Post reported that Centene and other managed-care firms that specialize in Medicaid are laying the groundwork to win additional contracts, anticipating the scheduled 2014 expansion of Medicaid contained in the federal health reform bill passed in March.

Montana officials have said the expansion could double Medicaid rolls in the state, to as many as 200,000 people.

The Post’s coverage also said managed care of Medicaid by private firms has not been without its problems, with some companies accused of undue profits by taking per-patient payments and not providing adequate care.

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