Blue Cross and Blue Shield to acquire Paramount Medicaid contract [The Blade, Toledo, Ohio]

Dec. 22—Anthem Blue Cross and Blue Shield on Wednesday announced the company had agreed to acquire a Medicaid contract held by Paramount Advantage, action that comes six weeks after a judge threw out a lawsuit alleging the state had improperly shut Paramount Advantage out of a lucrative managed-care contract.

In the announcement Wednesday, Anthem Blue Cross and Blue Shield said the transaction was expected to close before the anticipated July 1 implementation date of Ohio's new Medicaid managed-care program. Anthem was recently awarded a statewide contract to serve Medicaid beneficiaries across all populations as a new entrant to the program, the statement said.

The contract held by Paramount Advantage currently serves 256,000 Ohio Medicaid enrollees.

On Nov. 9, an attorney had said Paramount Advantage, the insurance arm of ProMedica, would appeal the ruling in the suit making the allegations against the Ohio Department of Medicaid.

Paramount building in Maumee.

Ellie Buerk

Paramount claims bias in trial against Medicaid after loss of $22 billion contract

In a separate written statement, Tausha Moore, ProMedica's director of public relations, said that if the transaction closes as planned, Paramount will not pursue further legal action against the Ohio Department of Medicaid.

The announcement stated that:

— Upon closing the transaction, Anthem Blue Cross and Blue Shield will begin administering benefits for these members in coordination with Paramount Advantage during a transitional period.

— Beginning July 1, 2022, Anthem will provide all aspects of operations related to the new Ohio Medicaid managed-care program. This includes current members of Paramount who remain with their current plan, in addition to any members assigned to Anthem as a result of its entry into the Ohio Medicaid managed-care program, and other beneficiaries who elect to enroll with Anthem.

— Paramount Advantage's contract with the Ohio Department of Medicaid runs through June 30. It provides health-care services to eligible recipients for aged, blind, or disabled and covered families and children, including Healthy Start and Healthy Families and Adult Expansion, Medicaid benefits.

Financial terms of the Anthem Blue Cross and Blue Shield's acquisition of the Medicaid contract were not disclosed.

Both Paramount Advantage and Anthem Blue Cross and Blue Shield issued separate statements.

"Anthem Blue Cross and Blue Shield shares Paramount's commitment of investing in Ohio communities, improving lives and well-being and focusing on care for the whole person," said Lori A. Johnston, president of Paramount Health Care.

"Paramount has been honored to serve our Medicaid members over the years," she continued. "We believe that out of the managed care organizations chosen for the new Ohio Medicaid contract, Anthem is best suited to continue providing access to the high-quality healthcare and support services that our members have come to expect. The transaction provides a seamless transition for our members and we will continue working with Anthem during the transition period to achieve that goal."

Greg LaManna, Anthem Blue Cross and Blue Shield's Medicaid president in Ohio, said that his company was looking forward to "expanding access to comprehensive, high-quality healthcare services for more Medicaid-eligible individuals."

"This transaction expands our commitment to further the Next Generation of Ohio Medicaid Managed Care in advance of the new Medicaid contract," he said.

The transaction is subject to approval by the Ohio Department of Medicaid and filings with certain federal and state agencies, the announcement stated.

On Nov. 9, Julie Lynch of Franklin County Common Pleas Court denied Paramount's request for an injunction against the state, saying it failed to meet the high hurdle of proving the state intentionally acted on a bias against the company. Paramount was the only current provider not to get a contract.

"Paramount does not win on the merits, and the harm of not being awarded a new contract is not irreparable," Judge Lynch said. " ... At most, it is the cost of creating the application. The issuance of the injunction would disrupt the new Medicaid program launching in July of 2022, which is the culmination of years of hard work, and it is designed to improve the health care for 3 million Ohioans."

The company had challenged the department's selection of six competing companies to provide managed-care services for 3 million Medicaid clients as part of a total of $22 billion in five-year contracts. The company had sought contracts to serve Ohioans in the western and northeastern portions of the state.

It contended the rules of the process were changed in midstream to rig it against regional companies in favor of national names with experience in multiple states, despite Paramount's two decades of experience in Ohio.

The company also argued that the application reviewers were biased against it because in 2019 it had pointed out an error in patient assignment algorithms that it contended would have cost the company $100 million.

The suit, filed in July, was an attempt to force the Ohio Department of Medicaid to cancel and rebid recently awarded managed-care contracts after the Maumee-based Paramount Advantage was left in the cold.

The company had said 600 jobs could be at stake.

"Anthem and ProMedica are working to identify open roles within both organizations that may interest affected Paramount employees," the statement Wednesday from Ms. Moore said. "This would create opportunities for Paramount employees to join Anthem or continue with ProMedica in a different capacity."

Ensuring quality care for members and minimizing local job losses have been top priorities for Paramount, the statement also said.

"Entering into this agreement with Anthem will help address concerns related to these top priorities," it said.

First Published December 22, 2021, 3:16pm

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