Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and
business strategies about Medicare Advantage plans, product design, marketing,
enrollment, market expansions, CMS audits, and countless federal initiatives in
MA and Medicaid managed care.
By Lauren
Flynn Kelly, Managing Editor
August 24, 2017 Volume 23 Issue 16
As part of a major overhaul of its managed Medicaid program,
Illinois intends to combine multiple managed care programs and extend them
statewide through contracts awarded to five managed care organizations, down
from 12 that currently serve the program. The state will contract with
CountyCare Health Plan under a separate option to cover only Cook County. The
Illinois Dept. of Healthcare and Family Services (HFS) on Aug. 11 unveiled its
intent to award the statewide contracts to Blue Cross and Blue Shield of
Illinois, Meridian Health Plan and the Illinois subsidiaries of publicly traded
insurers Centene Corp., Molina Healthcare, Inc. and WellCare Health Plans,
Inc., which all currently serve the state (see table, this page).
Aetna Inc. was the only publicly traded MCO that bid but did not
win a recommendation, continuing a “string of relatively recent contract losses
across its Medicaid business,” observed Credit Suisse securities analyst Scott
Fidel in an Aug. 14 research note. Those include losses in Missouri, Nebraska
and Pennsylvania — all states where it was also an incumbent, he pointed out.
Credit Suisse estimates that Illinois Medicaid represents approximately $750
million in annual revenue for Aetna, based on a $290 per-member per-month rate.
“However, the ultimate impact on [earnings per share for Aetna] is likely not
material, as [Illinois] Medicaid margins have been anemic due to the dicey
fiscal situation in the state,” he wrote, citing a 116.3% medical loss ratio
that Molina reported in Illinois for the second quarter as an example.
Illinois Faces Budget Woes
The new contract recommendations also follow Aetna’s recent threat
to pull out of the state program if it was not paid the roughly $700 million it
claims to be owed. According to the Chicago Tribune, the state has
about $15 billion in overdue bills, including $5 billion in unpaid group health
insurance claims and $3 billion in overdue payments to Medicaid MCOs. A federal
judge ordered the state to clear two-thirds of that Medicaid debt by June 30,
2018; the state comptroller late last month released $740 million in funds to
partially pay it down. When reached by AIS Health, an Aetna spokesperson said
the insurer has no comment on the latest contract loss or any possible plans to
protest.
Meanwhile, Cigna Corp. and Humana Inc. did not submit themselves
for consideration “as they both have very small market share positions in the
current program,” observed Fidel. Anthem, Inc. and UnitedHealthcare, Inc.,
which do not currently hold Medicaid contracts in Illinois, had expressed
interest at a bidders’ conference in early March but were not on the final list
of bidders. According to HFS, nine MCOs ultimately bid for the reprocurement.
The two other plans excluded from the selections were NextLevel Health, which
exclusively serves Medicaid recipients in Cook County, and Trusted Health Plan,
Inc., a Washington, D.C., Medicaid MCO that does not currently serve the state.
NextLevel is appealing the state’s decision, according to Crain’s
Chicago Business.
When asked why bids submitted by Aetna and NextLevel were not
adequate for re-selection, an HFS spokesperson responded, “Using best practices
from Illinois and other states, a multi-agency evaluation team of professionals
thoroughly reviewed every aspect of all the proposals. This included experts on
quality, managed care, health care delivery, information technology, finance,
and other areas relevant to managed care in Illinois. Plans were chosen through
a competitive and transparent process.”
But Democratic lawmakers in the state want to “unwind that
process” through a bill that would amend the Illinois Procurement Code
governing state contracting to include contracts with MCOs, reports Crain’s.
The bill passed through the general assembly two days after the bid selections
were unveiled and is likely to be vetoed by Gov. Bruce Rauner (R), whose
Medicaid reboot could cost the state up to $13.5 billion a year. That’s up from
the current $10.5 billion annual cost, but the state expects to save
approximately $1 billion over four years partly because the MCOs would be paid
lower rates, added Crain’s.
The new streamlined program will extend mandatory managed care
from the current 30 counties to all 102 counties in Illinois, incorporate
value-based payment models, further integrate behavioral and physical health
services by combining its three current managed care programs that serve
different populations, and extend the program to cover special needs
children (MAN 3/30/17, p. 4). Including the addition of foster care
youth who will be covered under a separate contract by Centene’s IlliniCare
subsidiary, HFS aims to include 80% of the 3.1 million Medicaid-eligible adults
and children in the state in managed care.
Upon successful negotiations with each MCO, the contracts are
slated to start on Jan. 1, 2018, and run for four years, with options to renew
for up to an additional four years. Bid protests must be received by Aug. 25.
Visit http://tinyurl.com/ma42dm6.
Market Share of Illinois
Medicaid HMOs, June 2017
|
Plan Name
|
Enrollment*
|
Market Share
|
Counties Served
|
|
Meridian Health Plan
|
376,685
|
20.00%
|
27
|
|
Blue Cross and Blue Shield of
Illinois
|
343,221
|
18.23%
|
6
|
|
Aetna
|
220,878
|
11.73%
|
9
|
|
Family Health Network
|
219,294
|
11.65%
|
6
|
|
Centene Corp.
|
205,810
|
10.93%
|
12
|
|
Molina Healthcare, Inc.
|
159,095
|
8.45%
|
19
|
|
WellCare Health Plans, Inc.
|
144,803
|
7.69%
|
14
|
|
CountyCare Health Plan
|
141,154
|
7.50%
|
1
|
|
NextLevel Health
|
54,167
|
2.88%
|
1
|
|
Community Care Alliance of
Illinois
|
7,868
|
0.42%
|
9
|
|
Humana Inc.
|
5,099
|
0.27%
|
6
|
|
Cigna Health and Life Company
|
4,668
|
0.25%
|
6
|
|
Total
|
1,882,742
|
||
|
*Enrollment data refers to the
state’s Integrated Care Program (ICP) and Family Health Plan/Medicaid
expansion populations.
SOURCE: MMM, Medicare and Medicaid
Market Data, AIS’s newly revamped interactive database and newsfeed on the
public-sector markets. Visit https://aishealthdata.com/mmm for more information
and a free demo.
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