MM Curator summary
The Ohio managed care contract valued at an estimated $1.5B was on hold while the AG negotiated the $88M settlement over PBM issues; once Centene agreed to pay the $88M, the managed care contract was awarded.
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- On Tuesday, Centene — the largest Medicaid managed care organization in the country — announced its Ohio subsidiary, Buckeye Health Plan, was awarded a new Medicaid contract by the state’s health department, to begin early 2022.
- Ohio Medicaid originally held off deciding on Buckeye’s proposal after the state’s attorney general sued Centene, alleging it breached its Medicaid contracts and used its pharmacy benefit managers to jack up prices for care, resulting in millions of dollars of overpayments by Ohio’s health department.
- Also Tuesday, Molina reported its subsidiary had nabbed a new Medicaid contract win in Nevada, its first in the state. The new four-year contract, with a potential two-year extension, will begin Jan. 1.
Insurers have been ramping up their presence in government programs as the economic volatility created by COVID-19 has caused some millions to lose job-based insurance, swelling Medicaid rolls and membership in the exchanges set up by the Affordable Care Act.
And more states are contracting with payers to manage their Medicaid programs. Currently, seven out of every 10 Medicaid enrollees are in plans run by an insurer, according to the Kaiser Family Foundation.
That growth has especially benefited payers with large government books of business, like Centene and Molina.
Centene on Friday was added to six managed care organizations already awarded shares of the $20 billion contract in Ohio, despite its history in the state.
In June, Centene agreed to pay the state $88 million to settle the dispute, and set aside more than $1.1 billion to to resolve similar claims in other states. Centene didn’t admit fault in any of the deals.
As a result of the settlement, Ohio Attorney General Dave Yost dropped his lawsuit against the St. Louis-based payer. Yost’s suit, originally filed in March, comes as legislators and regulators increasingly target pharmacy benefit managers to drive down pharmaceutical costs, especially as said PBMs merge with major health plans, complicating market incentives.
Centene said at the time of the settlement that it had restructured its PBM operations and aligned its Medicaid, Medicare and exchange products on more transparent pharmacy networks to eliminate “spread pricing,” a practice where PBMs eke out more money from taxpayer-funded health plans by charging the health plans one price for drugs but reimbursing the pharmacies differently.
Under the new contract, Buckeye will launch new technologies and local programs in partnership with providers and community groups to meet members health needs, Centene said. The subsidiary has been active in Ohio since 2004, and in 2020 was the state’s fastest-growing Medicaid plan according to market share, with more than 420,000 members, according to a release.
As for Molina, the Long Beach, California-based payer is now one of four managed care organizations offering coverage to roughly 630,000 Medicaid beneficiaries in Clark County and Washoe County. The addition of Nevada brings Molina’s Medicaid footprint to 19 states.
Nevada’s Medicaid and Children’s Health Insurance programs released a request for proposals for 2022 contract bids for the service area covering two urban counties of the state, Clark and Washoe, in March.
Contracts are worth about over $2 billion annually, according to consultancy Health Management Associates.
As part of the contacts, Molina will also participate in Nevada’s state-based ACA exchange. The state stipulates the payer must provide at least one silver and one gold qualified health plan by 2024 to ensure continuity of care for individuals and families that might experience a change in Medicaid or CHIP eligibility status.
Previously, Nevada only had three MCOs: Anthem, UnitedHealthcare’s Health Plan of Nevada and Centene’s SilverSummit Health Plan, according to the state health department.