This week, Pennsylvania's Department of Human Services expects to award Medicaid contracts worth more than $7 billion annually that cover almost 421,000 low-income, disabled adults.
But the contracts were scheduled to be awarded in June, raising questions about why state officials have dragged their feet.
The new program, Community HealthChoices, is Pennsylvania's managed long-term supports and services, or MLTSS. Low-income people enrolled in MLTSS have both Medicare and Medicaid coverage, and they usually need intensive care. Like other privatized healthcare programs, the state will pay insurers to manage the care of those beneficiaries.
The first phase of Community HealthChoices was supposed to start Jan. 1, 2017, but was pushed back to July 1 to give the state more time to educate consumers and providers about the program. The second and third phases are projected to start in 2018 and 2019.
Pennsylvania originally expected to pick the winning insurers in June. Kait Gillis, a DHS spokeswoman, previously told Modern Healthcare the contracts instead would be announced in early August, which did not happen. Gillis said Thursday the program is still on track to begin next July, and “the announcement will be made within this week.” No reasons were given as to why the state delayed in choosing the winning companies.
Insurers are expected to receive more than $1,400 per member per month on average, well above capitated rates in basic managed Medicaid programs, according to an analysis by consulting firm Health Management Associates.
Fourteen insurers submitted bids. Several for-profit, publicly traded companies like Centene Corp., Molina Healthcare and UnitedHealthcare threw their hats in the ring, as did local not-for-profits like Geisinger Health Plan. There will be between two and five insurers for each of the program's three regions.
Sarah James, a financial analyst at Wedbush Securities, said in a July research note that Centene and UnitedHealthcare are two likely front-runners for the new Pennsylvania contracts because they already have a big presence in Pennsylvania's broader managed Medicaid program. However, the state's managed Medicaid program is having its own problems. The state asked for new, revised bids in July after previously picking winners. Aetna won an injunction to stop the state from going forward with the contracts.