La. Medicaid program losing insurer for Bayou Health plan

Calder Lynch Show caption
Calder Lynch

The state’s Medicaid program is losing one of the private companies providing health insurance under its Bayou Health initiative.

But it won’t mean any immediate changes to some 200,000 Medicaid recipients enrolled in the plan or those providers delivering services.

Community Health Solutions of America is signing over its contract to another Bayou Health provider — Louisiana Healthcare Connections. LHC is a subsidiary of Centene Corp.

According to the Centene Corp., the purchase price will be between $110 million and $140 million.

The transaction is subject to state and federal health agency approvals, state Department of Health and Hospitals Chief of Staff Calder Lynch said Thursday.

Once the authorization is received, Lynch said those Medicaid recipients enrolled in Community Health Solutions will have an opportunity to choose among the remaining four plans available. There is no automatic transfer to CHS’ successor, he said.

“Any major change has to trigger a special enrollment period,” said Lynch.

The transaction would trigger the first substantial change since the Jindal administration kicked off the program, which privatized health care delivery for two-thirds of the state’s 1.2 million Medicaid recipients. The idea is to provide coordinated management of care to improve the health of those enrolled while curbing escalating costs.

It also comes as current contracts are nearing an end and the state is preparing to issue a new request for proposals from insurance companies as early as July.

Bayou Health’s first full fiscal year of implementation came in 2012-13. Companies were selected in July 2011.

Five companies have been providing the insurance coverage. Three of them receive monthly premiums to pay for policies: Louisiana Healthcare Connections, AmeriHealth Mercy of Louisiana and AmeriGroup Louisiana. Two others have operated on a model under which they are paid for services rendered: United Healthcare of Louisiana and Community Health Solutions of America.

Both types of plans have financial incentives to achieve savings.

The companies were chosen out of a dozen contenders.

Lynch said Louisiana Healthcare Connections-Centene has served notice that as it takes over Community Health’s contract with the state, it will move those accounts to an insurance premium model. That would leave only United Healthcare of Louisiana the only fee-for-service-based provider.

Follow Marsha Shuler on Twitter @MarshaShulerCNB. For more coverage of the state capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog .