Two insurers protest Pa. decision on Medicaid contracts

Jan. 06--Two health insurers that lost out on $12 billion in a half dozen state contracts are protesting the awards, with one insurer saying it planned to aggressively pursue "all options and remedies at our disposal."

About 2.2 million Pennsylvanians have health insurance through Medicaid, the state-federal program that covers people who are poor or disabled. There's currently uneven coordination of care for Medicaid patients, and the state's contracts are a bid to improve care and reduce costs.

The state rejected bids by Aetna and UnitedHealthcare to coordinate medical care for their Medicaid members.

Downtown-based Gateway Health was the big winner Thursday, picking up contracts to serve Medicaid members throughout the state. Ranking second in number of areas served was UPMC Health Plan with four regions, and Philadelphia-based AmeriHealth Caritas Health Plan, which was awarded three regions.

"We strongly disagree with the state's decision, have filed a formal protest with the Pennsylvania Department of Health Services and are aggressively pursuing all options and remedies at our disposal," UnitedHealthcare said in a statement.

The Minnetonka, Minn.-based insurer has a combined total of more than one million members in all of is plans in Pennsylvania, including commercial and military plans.

In a statement, Aetna said it was disappointed by the announcement and had also filed a protest with the state. The company has more than 210,000 Medicaid members in Pennsylvania.

Pennsylvania's Medicaid managed care program is called HealthChoices and the state wants 30 percent of money spent on medical care to hinge on how well the patient does after treatment, not the number of medical procedures performed.

Contract winners were selected based on criteria including current performance, customer service and member satisfaction.

Among the tools that contract winners have to achieve the state's goals are enrolling members in accountable care organizations, using bundled payments for a group of medical services and emphasizing a team approach in primary care.

"We're going to reward folks for providing the right services, not just more services," Department of Health Services Secretary Ted Dallas said in a prepared statement.

"You get what you pay for, so we're shifting the focus of Pennsylvania's Medicaid system toward paying providers based on the quality, rather than the quantity of care they give patients."

Kris B. Mamula: [email protected] or 412-263-1699

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