Medicaid rebid stripped from Ohio budget. Other actions unclear

MM Curator summary


The requirement to ensure a local plan wins contracts has been removed from the latest Ohio budget bill.


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The full implications of this week’s budget negotiations for a redesign of the Medicaid managed-care system seemed unclear Tuesday.

The Toledo Blade reported that language that would have required the Ohio Department of Medicaid to re-do a massive redesign and procurement in its managed-care system was stripped from the version of the state budget that was passed Monday. But the package was said to retain special considerations for Medicaid managed-care companies that are headquartered in Ohio.

Advocates following the issue closely said they were still studying the matter. The office of Gov. Mike DeWine declined to comment.

Two Northwest Ohio lawmakers, Senate President Matt Huffman, R-Lima, and Sen. Theresa Gavarone, R-Bowling Green, had inserted language requiring that the Medicaid system rebid the work after Paramount Advantage, a subsidiary of Toledo-based ProMedica, lost out badly in the original procurement earlier this year. Paramount said the process was biased against it.

The loss of the business, ProMedica has said, will cost the region 600 jobs. The company didn’t respond to a request for comment Tuesday.

Gavarone told The Blade that she was disappointed that language that would give Paramount another shot was stripped out during conference-committee negotiations. She was a member of the committee.

Critics of the attempted do-over said it threatened the launch of OhioRISE, a program that would create wraparound services to up to 60,000 kids with complex behavioral needs. Such children are currently in the care of multiple agencies and in some cases, parents have to surrender custody to county health officials so that they can get the services they need. The program is a major priority of DeWine’s.

Also, rebidding the work threatened to at least delay restructuring the way the $29 billion-a-year Medicaid system purchases most of its prescription drugs. Managed-care providers currently hire pharmacy middlemen who work behind a veil of secrecy and have been shown to mark up generic drugs by hundreds of millions of dollars on Ohio.

The Medicaid redesign takes that work away from managed-care companies and gives it instead to a separate pharmacy middleman, or benefit manager, who would work directly for the state. The idea is to give state officials a window onto pricing and reimbursement data, as well as decisions regarding which drugs get preferred treatment.

Perhaps most significantly, when the budget conferees apparently eliminated language requiring that Medicaid managed-care business be re-bid, they upheld the philosophy of competitive procurement. Some critics expressed fears that if the re-bidding requirement stayed in the budget, it would have sent the wrong message to future disappointed bidders: If you lose out initially, all you have to do is lobby and litigate your way back into the game.


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