Q&A: Ohio embarks on Medicaid overhaul, here’s what you should know

Re-bid on contracts could have a big impact on CareSource and its nearly 4,000 Ohio employees.

Ohio is embarking on a sweeping overhaul of its health insurance program that covers the poor and disabled.

Dayton-based CareSource and other insurance companies that manage Medicaid plans on behalf of the state will have to once again win their contracts.

About 1 in 3 dollars in the Ohio operations budget goes to Medicaid. Since the last contracts were finalized in 2013, Ohio insurance companies have managed $86.3 billion for Medicaid.

This is also an opportunity for Ohio to rewrite its contracts to change how Medicaid dollars are spent. A frenzy of lobbyists and health care providers have already been writing Ohio Medicaid making the case for more money to their industry or changes in how the money is spent. The department has also been getting feedback from people enrolled in Medicaid about what should change with the current system.

This week Ohio Department of Medicaid announced it is accepting bids from insurance companies that want in. Here’s what you need to know about what’s happening and what’s next.

What is Medicaid? Who is covered by Medicaid?

Ohio Medicaid covered 3 million people with low incomes or disabilities as of August. This includes about 404,000 people in our region. The health insurance program is jointly funded by the state and federal government.

Why do insurance companies manage this money?

About 90% of Ohioans who are covered by Medicaid don’t have their benefits managed directly by the state government. Instead, people get an insurance plan managed by insurance companies like CareSource or Anthem or others. This is called Medicaid managed care. These insurers get a payment per member per month and use that money to pay for their member’s health care.

These companies process claims and negotiate who is in-network for people enrolled. The goal is that insurers are supposed to find creative ways to improve health for their members.

What could happen with the overhaul?

In a sense, Medicaid is Ohio’s biggest policy tool, said Loren Anthes, who researches Medicaid with Cleveland-based Center for Community Solutions.

Nearly half of Ohio children, half of Ohio births and large portions of addiction treatment and nursing home care are paid for by Medicaid. All kinds of things like better outcomes for opioid addiction or a more efficient use of taxpayer money in theory can be engineered by what kind of requirements a state puts in place for how Medicaid money gets spent.

Anthes said Ohio is falling behind on health issues, like whether kids get lead screening or adolescent care. At the same time, the system can be hard for providers to deal with. If providers decide not to deal with Medicaid, then patients lose access.

“It’s really complex for small providers to be able to get credentialed and bill, because they don’t just bill once, they have to have five different contracts with five different plans with five different terms and conditions,” Anthes said. “And that adds cost and makes it confusing.”

This is where the rebid comes in. By rebidding the contracts, the state can update the conditions for getting and spending Medicaid dollars and can re-select which insurers it trusts to meet its goals.

Some of the goals for whoever wins the contracts include transparency and accountability in managing its pharmacy benefits, eliminating administrative redundancies in the credentialing and enrollment process, simplify claims submissions and management, and providing high-intensity services for Ohio children and teens with complex behavioral health needs.

“We can achieve health care excellence by introducing a seamless service delivery system that works for members, providers, and community partners. Bidders will be assessed based on their ability and interest in partnering with ODM to achieve the goals of the future program,” said Ohio Medicaid Director Maureen Corcoran.

What does this mean for CareSource?

About 1.3 million Ohioans have their Medicaid plan through CareSource, making it the largest Medicaid managed care plan in the state and larger than the other four insurance plans combined.

“CareSource is Ohio’s highest quality and lowest cost Medicaid plan and is well positioned for the RFA. That said, this bid is critically important to our business, to the Dayton community and to Ohioans,” said Steve Ringel, Ohio market president for CareSource.

The Dayton insurer has many business lines, but its original core business is managing Ohio Medicaid benefits. CareSource will need to once again be awarded its contract with the state to continue doing this.

As the largest employer in downtown Dayton, 2,200 local jobs, and nearly 4,000 Ohio jobs, are tied to this re-bid, Ringel said.

What happened so far?

For the past 18 months, the DeWine administration has been doing the leg work leading up to this bid. This includes getting feedback from 1,100 different people and organizations.

What’s next?

By Oct. 29, insurers have to let Ohio Medicaid know they intend to apply. The request for applications will be posted until Nov. 20. Bidders can learn more at managedcare.medicaid.ohio.gov. Ohio Medicaid will let the winning bids know with award letters Jan. 25, 2021. The goal is for the newly rebid system to go live Jan. 5, 2022.

By the numbers: Ohio Medicaid

3 million: Ohioans covered by any type of Medicaid

2.7 million: Ohioans with Medicaid managed care

$86.3 billion: Ohio Medicaid dollars spent since the last rebid

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