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CareSource partners with Texas company in bid to serve Texas Medicaid members

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[MM Curator Summary]: The Ohio-based MCO will partner with the largest FQHC in Texas.



Dayton-based insurance company CareSource announced today it is partnering with a Texas company in a joint venture to serve Medicaid customers in Texas.

CareSource is partnering with Legacy Community Health, a health care system with over 50 locations in the Texas Gulf Coast region, to form CareSource Bayou Health, which plans to apply to serve Texas Medicaid managed care customers.

CareSource Bayou Health will seek contracts to serve members in Harris and Jefferson counties who are part of the State of Texas Access Reform (STAR) Program and Children’s Health Insurance Program (CHIP) when the Texas Health and Human Services Commission releases its request for proposals.

“As a nonprofit organization, we focus on our members and the communities we serve, not shareholders,” said Erhardt Preitauer, president and CEO, CareSource. “With CareSource Bayou Health, we have an opportunity to be an innovative, sustainable partner to the state that will make a lasting difference in the health and well-being of Texans while driving better quality and outcomes.”

Preitauer said the partnership has been in the works for almost a year. They expect to hear from the state of Texas if they will be awarded a contract to offer services to Texas Medicaid customers by late 2023 or early 2024.

“The joint venture between CareSource and Legacy Community Health is unique because it aligns our quality and operational excellence as a managed care organization with their local expertise as Texas’ largest federally qualified health center (FQHC) focused on patient care,” Preitauer said.

CareSource is one of the largest employers the Dayton area, with about 3,000 employees here and approximately 4,500 total.

CareSource, which administers one of the nation’s largest Medicaid managed care plans, already covers 2 million people in Georgia, Indiana, Kentucky, Ohio, and West Virginia. CareSource is also part of a team offering services in Arkansas for people with developmental disabilities.

In August, CareSource announced it would also be serving Medicaid members in Mississippi as part of its partnership with TrueCare, which is owned by nearly 60 Mississippi hospitals and health systems.

CareSource reported an $11.2 billion gross revenue in its 2021 stakeholder report, which was up from its 2019 gross revenue of $10.6 billion. The company’s 2021 stakeholder report said 9.7% of costs went to administrative costs, which was up from 8.3% in the 2020 stakeholder report. In 2019, the company also reported an operating margin of $82.1 million.


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