/House wants to throw out $3 billion in Medicaid contracts

House wants to throw out $3 billion in Medicaid contracts

The House approved an amendment Thursday that would require the Division of Medicaid (the Division of Medicaid) to bid contracts for its lucrative managed-care program. It is valued at around $3 billion per year. Managed care is where the agency employs insurance companies to provide health care for Medicaid beneficiaries. While the amendment was unanimously passed by lawmakers, some were concerned that it would set a dangerous precedent. “I support Mississippi True. Rep. Jarvis Dortch (D-Jackson) said that while I believe we should have a provider sponsored contract, is this how the Legislature should work? Come in and redo it after it’s been bid? This is the latest attempt to allow Mississippi True, an insurance plan that includes 60 Mississippi hospitals to be included in the state’s managed-care market. The new company, which is supported by the powerful Hospital Association of Mississippi, was unable to secure a contract last summer. Several powerful legislators cried foul, often publicly suggesting that the Division of Medicaid had unfairly favorit other companies. United Healthcare, Magnolia Healthcare and Molina Healthcare were all awarded contracts. All three of these companies are located in the state. Mississippi True and another insurance company sued the Division of Medicaid within weeks of the announcement. They claimed that the agency unfairly favoured these companies. Several legislators agreed. The bill was presented by Rep. Jason White (R-West). Thursday’s amendment forms part of the House Medicaid technical bill. It reauthorizes rules that govern the state’s Medicaid program. An earlier version of this bill would have granted Mississippi True a small managed-care contract under the pretext of a pilot program, mandating that the agency transfer up to 10% of managed care patients to the new company. This provision was approved by the committee but few people were happy with its current form. Current managed care contracts ensure that each company participating in the program receives at least 20% of the managed care population. Mississippi Today was informed last week by Chuck Reece who is chairman of the board at Mississippi True that a 10% cut to the population “wasn’t actuarially sound.” It won’t work. But it’s not impossible. Even those who supported the legislation, such as White, were concerned that giving more than 10% of the population to this company would make the “pilot program” a “straight no-bid contract to hospitals.” The amendment approved Thursday was unanimously. However, these concerns weren’t eliminated. Dortch asked if the Legislature was entering legal territory during the floor debate. Are you concerned that this could set a bad precedent?” Dortch stated that there is currently a lawsuit in progress and that we are settling it as a legislative body. “If Mississippi True wants it, why don’t we just give the contract to Mississippi True?” However, this question was a bit rhetorical. The bill was approved by Dortch and many of his coworkers, 108 to 3. The size of Medicaid’s current budget, which is $6 billion, has been a problem for lawmakers for years. The agency introduced managed care in 2011 as a way to reduce costs. Managed care is a program that pays insurance companies a flat fee per beneficiary. This gives these companies incentives to keep their patients healthy and reduce the amount of services they use. The hospitals are at odds with managed care companies for years, arguing that managed-care reimbursements are less consistent than traditional Medicaid. Hospitals can take over these complaints and receive a share of the managed care pie through a provider-sponsored plan. Mississippi True’s widespread support is due to its wide reach. Mississippi True, unlike the other managed care companies, is a partnership that includes 60 hospitals throughout the state. This means that most legislators will have a member hospital within their district. Last week, when the House Medicaid committee was discussing an earlier draft, Rep. Becky Currie (R-Brookhaven) stated that voting against Mississippi True was a vote against “your hospitals.” Because they are for it.” The original contracts were procured by Medicaid’s former executive Director David Dzielak who resigned in December. Dzielak’s last 12 months had been marred by claims of special interests, especially during the bidding process to procure managed care contracts. White presented his support for Drew Snyder, interim director, and suggested that a procurement process with him would be more fair. White stated, “So we’ll let that light shine in and see where it takes us from there.” The Division of Medicaid stated that it wasn’t yet clear how the contract rebidding would impact the agency. A release from the agency stated that there were many proposals for technical amendments bills that could lead to significant changes to Medicaid programs. However, this is still early in the process and many changes will be needed before the legislation reaches Governor’s desk. “We only discovered the language of this specific amendment today and are still investigating how it might affect the agency,”