Texas HHS announces managed care organization contract awards

This week, Texas HHS announced the contract awards  to managed care organizations in corresponding service areas for the STAR+PLUS product. The contracts will become effective September 1, 2020 and will be effective for 3 years. 

The contracts are as follows: 

  • Harris service area: Aetna, Amerigroup, United Health Care
  • Hidalgo service area: Aetna, Molina Inc., Superior
  • Dallas service area: Aetna, Amerigroup, Superior
  • Bexar service area: Aetna, Amerigroup, Superior
  • North East service area: Molina Co., United Health Care
  • Tarrant service area: Amerigroup, United Health Care
  • West service area: Superior, United Health Care
  • Central service area: Superior, United Health Care
  • Travis service area: Superior, United Health Care
  • El Paso service area: El Paso, Superior
  • Nueces service area: Superior, United Health Care
  • Jefferson service area: Amerigroup, United Health Care
  • Lubbock service area: Superior, United Health Care

Currently, HHSC contracts with five separate plans — list all five — to provide care throughout the state to seniors who qualify for Medicaid and also have a disability.

Following the announcement, Molina CEO Joe Zubretsky said he was “very disappointed” to hear the results. The company was not selected to return to five of the six regions it has served through the Star+Plus program. 

 

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The loss of these contracts is expected to result in nearly $1 billion in losses for Molina, as well as a decline in membership and a disruption in the cost reduction plan. 

“The team has grown margins to industry-leading levels, even in the face of a significant revenue decline in 2019. We are committed to meeting the challenge again and will continue to pursue the revenue opportunities that lie ahead,” Zubretsky said in a statement to Modern Healthcare

Molina won contracts in two regions including Hidalgo and the North East Service area. 

Cigna Corporation and Anthem also stand to lose millions in premium revenue after losing ground in the Texas Medicaid Star+Plus program. Cigna’s loss of its only three regions in the state could mean a $908 million hit to revenue. Anthem, meanwhile, could lose an estimated $260 to $400 million

Health plans have 10 days to file a protest to the awards, and a number of plans are expected to do so.