MDwise says state's Medicaid decision will disrupt care for thousands

MDwise, an Indiana-based nonprofit Medicaid managed-care organization, says a recent move by the Indiana Family and Social Services Administration (FSSA) to terminate its Medicaid contract will dismantle the company's business and affect health care access for more than 302,000 Hoosiers.

FSSA has notified MDwise that its contract will end Dec. 31, 2025. MDwise, which has participated in Indiana Medicaid for more than 30 years, said the decision will eliminate hundreds of jobs and disrupt long-standing patient relationships with providers across the state.

In its statement, the insurer said FSSA initially cited alleged breaches of contract last summer, including reporting issues it described as "non-substantive or technical in nature." The company said none of the claims involved its ability to deliver or pay for health-care services and that it had demonstrated it had cured the concerns.

MDwise said the state later opted to end the contract "for convenience," which the company described as effectively a termination without cause. According to MDwise, repeated attempts to meet with FSSA or propose alternatives — including a performance plan, dispute-resolution requests, settlement proposals and a request for a three-month delay — went unanswered.

"The Indiana Family and Social Services Administration's attack on MDwise should concern every Hoosier, especially those who rely on Medicaid for their health care needs," the company said in a press release. "We have operated in good faith at every turn, and the state's decision to terminate our contract 'for convenience' is unjustified and fails to consider the harm it will cause members, providers, employees and communities."

The company warned that a rapid transition could cause gaps in care for members with chronic conditions, disrupt care-management programs and interfere with provider access, pharmacy benefits and authorizations. MDwise also emphasized its long history of low denial rates and local community investment as part of its value to Indiana residents.

"Instead of working together toward an orderly solution, the state has chosen a rushed path that jeopardizes care for hundreds of thousands of Hoosiers. MDwise presented multiple proposals to ensure a smooth, responsible transition – all of which have been ignored," the company said. "Despite this setback, MDwise is not giving up. We remain committed to finding a responsible path forward that preserves access to care, protects local jobs and honors our 30-year legacy of serving Indiana's most vulnerable residents."

FSSA has said in public statements that MDwise was the most expensive and lowest-rated of the state's four Medicaid managed-care plans and that shifting members to the remaining plans — Anthem, CareSource and Managed Health Services — will support long-term sustainability of the program. The agency said existing treatments and authorizations will continue during the transition.

The move comes as Indiana Medicaid enrollment and costs remain historically high. MDwise has filed legal action challenging the termination; a Marion County judge has denied a temporary restraining order, allowing the state's decision to proceed.

MDwise members are expected to be reassigned or choose a new plan during the transition period ahead of the December 2025 end date.

This is a developing story and will be updated as new information comes to light.

This reporting is made possible by a grant from the Indianapolis African-American Quality of Life Initiative, empowering our community with essential health insights. https://iaaqli.org/

Contact Health & Environmental Reporter Hanna Rauworth at 317-762-7854 or follow her on Instagram at @hanna.rauworth.

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