Financial losses pile up for ProMedica subsidiary Paramount

Aug. 24--Financial woes for Paramount, the insurance subsidiary of ProMedica, continue to stack up, as records reveal it posted nearly $50 million in second-quarter operating losses during the same time period it began discussing the potential of eliminating Medicaid coverage entirely.

ProMedica leaders met with Gov. Mike DeWine Tuesday to discuss financial concerns surrounding Medicaid a short time after The Blade first reported in June that the health care giant was considering removing Medicaid coverage following a rough first quarter of $28.5 million in operating losses.

Records posted in late June show an even worse second quarter, where that number climbed to $49,631,000 for the months April, May, and June, totaling $78,131,000 in losses over the first six months of 2019. Furthermore, the most recent quarterly disclosure says that Paramount has accumulated an operating income loss of $89.4 million between the last two quarters of 2018 and the first two quarters of 2019. It noted that "the losses in the insurance division were attributable exclusively to the Paramount Advantage (Medicaid) product line."

Last year, ProMedica recorded a net operating income of $43.3 million and annualized operating revenues of $6.7 billion.

Tausha Moore, a spokesman for ProMedica, said Friday that the Toledo-based health care system, which serves around 240,000 patients as part of Ohio's Medicaid plan, hasn't come to a decision on its Medicaid future. She restated that it hopes to continue providing coverage but will drop the service if it isn't "economically sustainable," as ProMedica Chief Financial Officer Steve Cavanaugh has said previously.

Maureen Corcoran, the state's director of Medicaid, said her department has met with ProMedica, among other Medicaid providers to "address concerns," but said those conversations aren't anything "unusual." She said she wasn't at liberty to discuss financials of other Medicaid providers across the state in comparison to Paramount, but said "all of them had concerns," about specific areas as it relates to Medicaid.

Ms. Corcoran said that because Medicaid is broken into different categories, her department must continually review how those categories are made up to make sure they're "getting it right." One category that ProMedica has asked the state to review according to Ms. Corcoran is the Medicaid expansion group, which came into play after the passage of the Affordable Care Act. She said it's a "newer" group that has changed, sparking the need for more evaluations. The expansion group was put in place to cover more low income Americans under the act. Thirty-two states have since accepted federal funding to expand Medicaid according to healthinsurance.org.

"The primary question that we have to pay attention to, is to be evaluating 'Do we have people in the right categories?'" Ms. Corcoran said. "Are we categorizing people correctly? Are we paying correctly? What we've been doing for weeks is looking at data analyses."

Ms. Corcoran believes any talk of ProMedica getting rid of Medicaid is premature, adding that a hypothetical exit would be "a lengthy transition."

"Based on my conversations with Paramount, they're focused on continuing to support Medicaid individuals," she said.

Dan Tierney, a spokesman for the governor, added that Mr. DeWine has been working to improve Ohio's Medicaid program since his campaign kicked off, but wouldn't discuss specifics surrounding Paramount's Medicaid struggles. He reiterated that the meeting this week was at ProMedica's request. On Tuesday he insisted Mr. DeWine has taken meetings with "others in the market" and said Mr. DeWine "is always willing to meet with" Medicaid providers.

"The governor wants a strong Medicaid program throughout the state of Ohio," Mr. Tierney said in a phone interview Friday. "One of the governor's goals that he talked about during his campaign was to make the Medicaid program even better. We're working on a new procurement process to make sure we get the best deal possible for taxpayers."

Paramount President Lori Johnston and ProMedica Chief Executive Officer Randy Oostra weren't available for comment Friday.

In June, Ms. Johnston said if Paramount were to drop Medicaid, it would "transition" those affected to other plans across the state, adding that: "Under no circumstance would a current Paramount Medicaid member lose health insurance coverage."

Ohio has five Medicaid providers in total. In addition to Paramount -- Buckeye Health Plan, CareSource, Molina Healthcare, and UnitedHealthcare also serve Medicaid to those who qualify. This includes populations of: low-income individuals, pregnant women, infants and children, older adults, and people with disabilities.

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