The Scramble Is On For Medicaid Money

You know there is big money to be made in health care when losing companies are pulling out all the stops in an effort to get a piece of $2.2 billion to manage a new Louisiana Medicaid program.

Medicaid is the federal-state health care program for low-income Americans.

Gov. Bobby Jindal is an advocate for letting the private sector manage as many government operations as possible, and health care is one of his primary targets.

The current state Medicaid system is managed by the state Department of Health and Hospitals, which allows a patient to choose a physician who treats Medicaid patients. The doctor bills the state for delivering the service to the patient.

Jindal wants to turn a big part of the program over to private companies. The goal is to set up coordinated care networks to handle about 875,000 of the state’s 1.2 million residents on Medicaid. Most of those affected are children.

Bruce Greenstein, secretary of the state Department of Health and Hospitals, and his staff are setting up the network system.

How it works

Patients, or their parents in the case of children, would determine which of three coordinated care networks they would like to join. They would be given an insurance card and receive care from health-care providers — doctors, specialists and others in the field — who are selected by the network.

The three companies that will get a monthly fee for each Medicaid patient that selects their network are Louisiana Healthcare Connections Inc., Amerihealth Mercy of Louisiana and AmeriGROUP Louisiana Inc.

Each company will be responsible for managing care, approving services and seeing that providers in their network are paid.

Two additional companies have been selected to oversee shared savings networks. Individual health care providers would still be paid for services rendered. However, there would be more coordination in how a patient is treated.

The two companies handling the shared savings networks are UnitedHealth of Louisiana Inc. and Community Health Solutions of America Inc. They would get a management fee based on what the state saves by the elimination of unnecessary health services.

Four companies that weren’t selected to participate in the new networks have filed protests. They claim there were inconsistencies in the way proposals were evaluated.

Greenstein has already rejected two of the earlier protests, saying there isn’t sufficient reason to overturn the decisions of the health agency teams that evaluated the proposals. Other protests will probably meet a similar fate.

Meanwhile, the issue has gone to state district court. Companies that were selected don’t want DHH to release details of their proposals. They claim that would compromise protected and confidential information that would violate their privacy rights.

Another court hearing is scheduled for Friday.

Medicaid is big business in any state, and it’s a $6.7 billion annual enterprise in Louisiana. The $4.5 billion not involved in coordinated care networks is spent on prescription drugs, nursing home care and payments to hospitals for treating the underinsured and uninsured.

The Jindal administration wants to begin the coordinated care networks in New Orleans in January. They would go statewide by May of 2012. It has been estimated the new networks will save the state $135 million in the first year.

Controversy has surrounded the coordinated care networks since they were conceived. Legislators said they were deceived when the plan was slipped into the state budget last year at the last minute.

Some health-care providers were opposed, fearing they would receive less compensation for their services. Their opposition softened when the rules were changed to say they couldn’t be paid less than they had been receiving.

Greenstein had a rocky confirmation process because of concerns about his involvement in the process that put his former employer in line for a state contract. However, he was confirmed.

The Legislature passed legislation by Sen. Willie Mount, D-Lake Charles, that would have given lawmakers authority to extend or end the coordinated care networks if they didn’t improve health care delivery. Jindal vetoed the bill even though it passed unanimously in both the House and Senate.

Patients lose support

Legislators had legitimate concerns. What, for example, would they be able to do if their constituents receiving Medicaid care through the new program had problems? The governor’s veto took lawmakers completely out of the picture and leaves patients at the mercy of the managing companies.

Now, the losing companies are complaining about the secrecy involved in selecting the five winners.

“The public has a right to know,” said the attorney for one of the losing companies.

And the winning companies are protesting the release of information that explains how they were selected.

“It is our obligation … to appear here to prevent disclosure,” said an attorney for one of the winning companies.

Critics of the new networks say company profits will mean less health care at higher costs. Supporters insist private companies can do a better job and save the state money over the long haul.

Pity the poor Medicaid recipient who can’t help but wonder whether he or she will be better or worse off once the dust settles.

Jim Beam, the retired editor of the Lake Charles American Press, has covered people and politics for more than five decades. Contact him at 494-4025 or [email protected] press.com.

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