CareFirst takes over management of Medicaid plans from University of Maryland Medical System

The University of Maryland Medical System has sold its health plans that provide insurance coverage to tens of thousand of Medicaid beneficiaries in the state.

UMMS and the buyer, CareFirst BlueCross Blue Shield, declined to disclose terms of the deal.

But the move, approved by regulators and closed this week, expands CareFirst’s reach into management of Medicaid plans. Medicaid is a government-funded health program for low-income people that is managed by private carriers in Maryland.

The deal affects 56,000 people, including 50,000 in Medicaid plans and 6,000 in certain Medicare Advantage plans that serve people who qualify for both Medicaid and Medicare, the federal health program for seniors and those with certain disabilities.

Specifically, CareFirst BlueChoice acquired University of Maryland Health Advantage Inc., a Medicare Dual Eligible Special Needs health plan, and University of Maryland Health Partners, Inc., a Medicaid managed care organization.

The move puts more people under the banner of CareFirst, already the dominant carrier in Maryland.

The medical system and the insurance carrier depicted the acquisition as a “partnership” where beneficiaries would continue to have access to a network of providers that UMMS created that includes those within and outside of the medical system but under CareFirst’s management.

CareFirst has been working for years on programs aimed at better managing health outcomes for beneficiaries in all of its plans. The goal is to coordinate care of people’s chronic conditions such as high blood pressure and diabetes and emphasize preventive medicine between primary care doctors and specialists. Officials say the efforts mean less spending on health care, particularly hospital visits, and better overall health.

State and federal authorities have been pushing all carriers and providers in this direction, through carrots and sticks. In heavily regulated Maryland, hospitals but not doctors are capped in what they can earn from patients. With providers outside of that system, it’s left to carriers such as CareFirst to devise incentives to reduce costs and improve care through providers' offices.

“As a not-for-profit healthcare company, serving all residents through time and circumstance is an essential expression of our mission,” said Brian D. Pieninck, president and CEO of CareFirst, in a statement.

“This partnership brings the best capabilities of CareFirst and UMMS together in a new model and is part of our broader efforts designed to deliver care focused on value and improved health outcomes,” he said. “Our work with the UMMS team will provide opportunities for deeper collaboration and innovation designed to bring our shared communities greater value, expanded access to high quality care, better consumer experiences, and more equitable care for all Maryland residents.”

UMMS is a system of 13 hospitals and other health providers across the state.

Officials said the care should not be interrupted during the transition.

“The transition of our Health Plans to CareFirst means our patients will have access to a wider range of services that they can count on to help manage their health, and will get access to providers throughout the state,” said Dr. Mohan Suntha, president and CEO of UMMS, in a statement. “The deepening of our longstanding partnership with CareFirst opens up exciting new possibilities to better serve our communities' vulnerable populations together.”

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