AmeriHealth, Centene, UPMC win $7B in Medicaid contracts

The Pennsylvania Department of Human Services awarded a massive Medicaid bid last week to AmeriHealth Caritas, Centene Corp. and UPMC after delaying the decision for several months.

The contracts are for Pennsylvania’s new Community HealthChoices, a Medicaid program that covers managed long-term supports and services. The 420,000 people in the program are dually eligible for Medicaid and Medicare and often are among the oldest, sickest and most vulnerable.

Health insurers participating in the program will receive a monthly lump-sum payment for each covered patient. That per-member, per-month payment is expected to be about $1,400, meaning the taxpayer-funded program will spend nearly $7.2 billion annually, according to March estimates from consulting firm Health Management Associates. The contracts run through 2022 and have two option years.

The huge revenue potential prompted 14 companies to bid. AmeriHealth, Centene and UPMC will manage Community HealthChoices, which is scheduled to start next July. It was supposed to start at the beginning of 2017 but was pushed back to educate consumers, hospitals and doctors. The contracts also were supposed to be announced in June.

Critics have raised concerns with these types of privatized Medicaid programs. Some have argued health plans have motives to deny care to retain revenue, and there is little transparency. Medicaid officials, including those in Pennsylvania, say the programs offer the chance to coordinate care among patients, hospitals, doctors, nursing homes and other facilities.