Local health firm loses state pact

47,000 Medicaid patients affected; 80 workers could lose jobs

By Marissa Harshman, Columbian health reporter

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About 47,000 Medicaid patients in Clark County may soon be forced to find new doctors. But so far, patients have no reassurance there will be enough local physicians willing to serve them.

The state Health Care Authority, which oversees seven health programs, has selected five health insurance plans that appear to have successfully bid to provide Medicaid services to Washington residents. The selected insurance plans will manage care for the state’s Healthy Options and Basic Health members, who are mostly women and children.

Columbia United Providers, a Vancouver-based group which currently provides the health plans, was not selected. CUP has filed a formal protest to the decision. The contracts are set to be finalized Feb. 29 and will be in effect from July 1, 2012 to Dec. 31, 2013.

If the decision stands, the local CUP members will have to select new health insurance plans and, in most cases, new primary care physicians. The decision would also leave the 80 workers at CUP unemployed.

CUP is a community-based health insurance plan owned by PeaceHealth Southwest Medical Center and other Clark County health care providers. The group has managed the health care for local Medicaid patients since 1994.

The five plans recently selected by the state are Amerigroup, Community Health Plan of Washington, Coordinated Care Corp., Molina Healthcare of Washington and UnitedHealthcare Community Plan.

Amerigroup and UnitedHealthcare are Fortune 500 companies and Coordinated Care Corp. is a subsidiary of Centene, another Fortune 500 company.

Molina Healthcare is a for-profit company based in Long Beach,

Calif., and provides health care services to 4.3 million people in 16 states. Community Health Plan is a Washington-based nonprofit group founded by a network of community and migrant health centers in the state.

CUP officials fear the state’s bidding process may represent a fundamental change in the values of the state’s managed Medicaid program.

“If the state’s remaining program consists primarily of multistate, large plans, Washington’s opportunity to collaborate with locally focused health plans to innovate on health system efficiencies and improve quality will be severely curtailed,” said Ann Wheelock, CUP chief executive officer.

The state decision has also sparked concern among CUP members and physicians.

About 170 Clark County primary care providers contract with CUP, in addition to specialists, pharmacies, hospitals and other medical service providers. That accounts for about 95 percent of non-Kaiser physicians in the county, said Cindy Orth, vice president for external affairs at CUP.

Many local private physicians and physician groups are not currently contracted with the other health plans, raising questions about who will care for Medicaid patients if CUP is gone, Orth said.

Dr. Susan Hughes, a family medicine doctor with the Family Wellness Center, said she doesn’t believe the out-of-state plans have the capabilities to care for local patients.

“They may have approval from the state to move forward, but they don’t have a panel to deliver, and CUP does,” she said.

The Health Care Authority required that bidders have an “adequate provider network,” said Jim Stevenson, spokesman for the Health Care Authority. However, it’s unclear whether they were required to have those networks established before submitting a bid. Stevenson said he could not provide additional comment about provider networks because contracts are not final.

Molina and Community Health Plan both currently provide services in Washington, including Clark County. Molina, according to its website, has 28 contracted primary care providers in Clark County. Community Health Plan has 13, according to its website.

A Centene spokeswoman said she could not comment about its provider network since the contract process is ongoing. Amerigroup Washington chief executive officer Maureen McLaughlin said in a written statement that the company has been building relationships with providers for the past 18 months but didn’t provide additional details.

UnitedHealthcare did not respond to The Columbian request for comment on its provider networks.

Better reimbursement

The Health Care Authority selected the successful bidders based on several factors, including cost, access and quality. The most heavily weighted factor was cost, which appeared to bump CUP out of the running since it reimburses its physicians at a higher rate than the state average.

The authority set target reimbursement rates for each region in the state based on historical data and assumptions about future cost reductions and increases. The bid request also gave a cost range for bids. For most regions, the range for Healthy Options services was from 3 percent above to 3 percent below the target rate, Wheelock said.

But not Clark County. Clark County was not grouped with other counties, and the local range was from 3 percent above the target rate to 12 percent below, she said.

“The state was essentially inviting other plans to come in and low-ball the bid,” Wheelock said.

The Health Care Authority’s bid request said it thought there could be significant cost savings in Clark County, chiefly from physician reimbursement, Orth said.

“One of our concerns is they singled out Clark County for this bid process,” Orth said.

Primarily, she said, it’s because CUP reimburses physicians at a rate higher than the state average.

The state uses conversion factors to determine reimbursement rates. Each specific service has a weight code. That code is multiplied by the conversion factor to get a reimbursement amount.

CUP uses a higher conversion factor for most services. For example, the state conversion factor for maternity services, as set by the Health Care Authority, is $37.40. CUP has a conversion factor of $44.88. The private insurers use a conversion factor of $65 to $80.

CUP officials said its higher rate is necessary in order to get private practitioners to take on low-income patients.

“We paid higher than the Medicaid rate because we had to buy access,” said Dr. Lisa Morrison, CUP medical director.

In Clark County, Kaiser Permanente is a provider of health care services for a significant portion of the privately insured population. Kaiser serves few low-income, state-insured patients. That means the rest of the providers in the community have to balance state-insured patients with the remaining privately insured patients, Morrison said.

Dr. Colleen Fox, an obstetrician for PeaceHealth Medical Group, used to work in private practice for 12 years. The higher reimbursement rates are what allow the providers to keep their businesses running, she said.

“It’s really a way that we can still provide good health for the community and still keep our lights on,” Fox said.

Clark County is also unique because it has only one Federally Qualified Health Center, the SeaMar clinics. In other communities, those clinics, which receive state and federal subsidies, contract with health plans to serve a greater portion of the state-insured population. But SeaMar doesn’t have the capacity to serve the 47,000 local Medicaid patients, which means CUP has to contract with private providers.

The Health Care Authority hoped the bidding process would lower costs and help save the state money.

The changes may save the state money in the short-term, Wheelock said, but they are also pulling apart a local network that has been built over the past two decades.

Stevenson, with the Health Care Authority, said it’s too early to know how much money the state will save by switching health plan providers.