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CHARLESTON -- The West Virginia House of Delegates approved a bill Tuesday that will open up competition for the state lucrative Medicaid managed care program, but opponents see the bill as a way to re-open old wounds from a 2015 lawsuit.
Senate Bill 476, exempting managed care contracts from purchasing requirements, passed the House in an 80-17 vote. The bill now returns to the state Senate to concur with changes the House made to the bill.
SB 476 would exempt the Department of Health and Human Resource's Bureau of Medical Services from all Purchasing Division requirements.
This would allow the bureau to no longer solicit requests for proposals to administer the state's Medicaid Mountain Health Trust program, instead returning to an application process to allow additional managed care organizations to do business in West Virginia. An exception in the bill would put the Bureau of Medical Services under Purchasing Division requirements when seeking services for specialized populations, such as foster care services.
"West Virginia has been an unhealthy state for many years," said House Health and Human Resources Committee Chairwoman Amy Summers, R-Taylor. "We need to open up the market here to allow opportunities for health insurance providers to drive quality. We've got to have mechanisms in place and companies that are helping our people get healthier."
The Mountain Health Trust is the managed care program for Medicaid and the West Virginia Children's Health Insurance Program. West Virginia can choose from three plans offered by UniCare, The Health Plan and Aetna Better Health of West Virginia. The state's three contracts for management of the Mountain Health Trust are worth a combined $1.7 billion.
According to Summers, the RFP process limits selection to three MCOs to bid on Medicaid services. The application process would allow any health insurance entity to apply as long as it meets the requirements of the Office of the Insurance Commissioner, be fiscally viable to pay claims and meet all requirements of the state Medicaid and Centers for Medicare and Medicaid Services system.
While the state had previously used an application process for soliciting proposals from managed care organizations, a lawsuit in 2015 required the state to go through an RFP process. The state last solicited RFPs for the Medicaid program in 2017 as a result of the lawsuit. Summers has offered bills since then to return the state to the application process, claiming it is less costly for the managed care organizations and the state.
As a result of a settlement agreement in the 2015 lawsuit with DHHR, all MCOs that bid through the Purchasing Division process are required to meet a minimum medical loss ratio of no more than 85 percent. According to the National Association of Insurance Commissioners, a medical loss ratio is "the share of total health care premiums spent on medical claims and efforts to improve the quality of care."
House Health Committee Minority Vice Chairman Mike Pushkin, D-Kanawha, said he was concerned with taking the state away from the RFP process. He said allowing the Purchasing Division to handle the RFP process might be more onerous and costly for MCOs, but he believes it makes the process more transparent and saves the state money.
"I'm just a bit troubled by this bill. That's an understatement," Pushkin said. "These are the biggest contracts I can think of in state government. What this bill seeks to do is remove transparency, go back to the old way of doing things, and the current process has saved the state money. It might be more costly for the MCOs, but it has saved the state money by going with the lowest loss ratio.
"Why even have a bidding process on anything if you're going to take away and remove the largest state contracts, billions of dollars," Pushkin said. "You want to remove transparency from how we bid out billion-dollar contracts to MCOs. I apologize, but I've not heard a good explanation for why we're doing this. I think it is really detrimental and I don't think it's being prudent stewards of the people's money."
"That is false. There is transparency here," Summers said. "Medicaid has to submit these contracts to CMS, which requires public comment, so it is very transparent."