Described as a “major sea change”, Kentucky Governor Steve Beshear announced Thursday that more private companies will manage the state’s growing $6-billion Medicaid program as part of new three-year contract.
The governor said the plan will save taxpayers $375 million in General Funds that pay for most state functions and another $1.3 billion in all funds. The managed care contracts and other efficiencies will also balance the Medicaid budget this fiscal year, according to the governor’s office.
A byproduct of the new contracts will be the creation of 543 new jobs.
“We were confident that moving Medicaid from a mostly fee-for-service system to managed care would create significant savings, preventing unnecessary and devastating cuts to our priorities such as education and job creation. These contracts show the savings are real,” Beshear said in a news release. “Managed care will provide consistent, comprehensive care to patients, so our vulnerable families will continue to get the quality medical services they need.”
Four contracts were awarded to managed care organizations to provide services to Medicaid recipients across the commonwealth. Three of those contracts are with new vendors, and will serve more than 560,000 recipients.
The three new contracts were awarded to:
- CoventryCares of Kentucky – a Medicaid product of Coventry Health and Life Insurance Company. Coventry Health and Life Insurance Company is a subsidiary of Coventry Health Care, Inc. Coventry companies currently offer Medicaid managed care services in eight states: Florida, Maryland, Michigan, Missouri, Nebraska, Pennsylvania, Virginia and West Virginia.
- Kentucky Spirit Health Plan – a subsidiary of Centene Corporation headquartered in Missouri, which has 27 years of experience managing Medicaid plans, and currently provides services in 12 other states: Arkansas, Arizona, Florida, Georgia, Illinois, Indiana, Maryland, Mississippi, Ohio, South Carolina, Texas and Wisconsin.
- WellCare of Kentucky – a part of WellCare Health Insurance of Illinois, which currently serves 2.2 million members in seven states: Florida, Georgia, Hawaii, Illinois, Mississippi, New York and Ohio
Previously, Passport Health Plan held the state’s only managed care provider contract but was embroiled in controversy following a scathing report from the state auditor that uncovered lavish spending and conflicts of interest by board members. Beshear had threatened to terminate Passport’s nearly $800 million contract if the company didn’t adopt recommendations for improvement.
Despite the controversy, state officials renewed Passport’s contract to provide services to 170,000 Medicaid recipients in Jefferson County and 15 nearby counties.