Louisiana picks companies for Medicaid managed care deals

August 5, 2019 GMT

BATON ROUGE, La. (AP) — Four companies have been chosen to manage the care of 1.7 million Louisiana Medicaid patients starting next year, winning multibillion-dollar deals that are among the most lucrative in state government.

Louisiana’s health department announced Monday that the contracts will go to AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana, Humana Health Benefit Plan of Louisiana, and United Healthcare Community Plan. All but Humana currently hold Medicaid managed care contracts with the state.

Terms of the new deals, which are supposed to begin in January, remain to be negotiated with Gov. John Bel Edwards’ administration.


Louisiana contracts with managed care companies to oversee services provided to 90 percent of its Medicaid recipients.

The state pays a per-member, per-month fee for each person enrolled in a health plan with the companies — mostly adults covered by Medicaid expansion, pregnant women and children. The enrollees get services through a network of primary care doctors, specialists and hospitals.

The current Medicaid managed care deals with five private companies, negotiated by former Gov. Bobby Jindal’s administration, expire Dec. 31. Two of those five companies didn’t win new contracts with the state: Aetna Better Health and Louisiana Healthcare Connections.

Those two losing bidders can protest the contract awards. If those protests are unsuccessful, Medicaid patients with those health plans will need to select a new coverage option through an open enrollment process that starts in October.

Rep. Jack McFarland, a Winnfield Republican, criticized the process used to select the companies and the lack of legislative review. He questioned why Louisiana Healthcare Connections, which he said is the largest Medicaid health plan in his district, didn’t get selected, forcing patients to choose a new plan.

“I have health care providers in my district that have concerns that they felt like one of the better managed care organizations has been left out,” McFarland said Monday.

He suggested lawmakers should have had approval — or at least some sort of review — over contracts that will lock the state into billions in spending for years.

“It hints of impropriety,” said McFarland, a member of the House budget committee. “I’m going to be held responsible for funding it, and yet I have no input on it. And that bothers me.”

The health department didn’t explain what set the four winning contractors apart from Aetna and Louisiana Healthcare Connections. But agency spokesman Robert Johannessen said the selections were made through an “unbiased, objective process.”

“We followed the state’s normal procurement rules. The (bid solicitation and review) was handled by the department the exact same way that we handle all procurements,” he said.

Jindal moved to the insurance-based model for much of the Medicaid program in 2012, shifting from a previous system of directly reimbursing doctors and hospitals with a fee paid for each service rendered to a Medicaid patient. The managed care contracts annually account for roughly one-quarter of the state’s operating budget.

Critics have panned the existing contracts as doing too little to ensure proper spending and improved health outcomes in Louisiana’s $13 billion Medicaid program. The Edwards administration has pledged to make changes in the next round of contracts, saying it wants contracts aimed at improving patient care and lowering costs.

Lawmakers extended the existing contracts in December 2017 at the urging of the Edwards administration, keeping the current companies in place for 23 months beyond the expiration date while the health department sought new bids for the work.


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