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[MM Curator Summary]: Molina has a surprise Medicaid RFP loss due to challenges meeting DSNP requirements.
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The health insurer expected to be offered a contract to manage the care of Medicaid seniors in a new long-term services and supports program, but wasn’t able to stand up products in time.
Molina’s contract loss in Indiana is not expected to change the payer’s financial outlook. Gerenme via Getty Images
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- Molina will not be offered a Medicaid contract from Indiana that the payer expected to receive, after it was tied up in regulatory red tape, Molina disclosed on Monday in a filing with the Securities and Exchange Commission.
- Indiana’s long-term services and supports contract required the health insurer to have a dual-eligible special needs plan available for 2024, but Molina wasn’t able to stand the product up in time because of CMS administrative requirements, according to the filing.
- The regulatory requirements shouldn’t affect any of Molina’s other current or pending Medicaid contracts, the payer said. Molina still expects to bring in 2024 premium revenue around $38 billion.
Indiana’s Pathways for Aging is a new program meant to help seniors on Medicaid receive long-term care in a home and community-based setting. Long-term services and supports programs offer a variety of medical and social services to people who need help with daily activities because of age, disability or chronic illness.
The state is awarding contracts to managed care organizations before Pathways launches in 2024. Molina, along with Elevance, Humana and UnitedHealthcare, was supposed to receive a contract to manage beneficiaries’ care in the new program.
However, the Indiana Family and Social Services Administration notified Molina in late September that it wouldn’t receive the contract to participate in Pathways. Molina said it would have had a DSNP product available by 2025, but Indiana already determined that Molina hadn’t met readiness review requirements.
The contract was expected to run for four years, with the potential for two one-year renewal terms. Pathways, when launched, will cover roughly 100,000 qualifying Hoosiers.
“Indiana is the only state in its portfolio in which a Medicaid contract, whether actual or expected, has been affected by the CMS administrative proceeding,” Molina said in the filing, adding that the contract loss would not be material to the payer’s financials.
Molina did not respond to a request for comment on what CMS requirements held up its DSNP launch.
The contract loss comes after recent Medicaid wins for Molina in California, Iowa and Nebraska, which should collectively add more than $4 billion in annual premium revenue for Molina and offset the worst of member losses from Medicaid redeterminations, according to management.
“While the Indiana development is slightly disappointing, we remain bullish on [Molina] given the substantial amount of new business won over the last year,” JP Morgan analyst Calvin Sternick wrote in a note Monday.