HCA RELEASES HEALTHY OPTIONS SUCCESSFUL BIDDERS

The HCA released the names of the “apparently successful” bidders in it’s 2012-2013 managed care procurement process for Medicaid’s “Healthy Options” plan, and the surprises continue.

Of the 7 plans which had applied to enter the market, only 2 were considered apparently unsuccessful:  Premera and Columbia United Providers (CUP).

The winning bidders were:

—  Amerigroup
—  Community Health Plan of Washington
—  Coordinated Care Corporation
—  Molina Healthcare of Washington
—  UnitedHealthcare Community Plan

Premera, with both Regence and Group Health withdrawing from Healthy Options, would have been the largest Washington-based plan in the system, though it is impossible to know whether they would have eclipsed Community Health Plan as the local plan with the largest number of Healthy Options patients.  Community Health Plan currently makes up about 35% of the market.

Of the 5, 4 are for-profit, publicly traded plans from out of state.  Generally, this has raised concerns with some in the provider and policy community.  Among the new plans, Coordinated Care Corporation has distinguished itself by making a concerted effort to reach out to providers across the state.

The fact that Columbia United Providers was left off the list comes as tremendously noteworthy.  This was the only plan to currently provide coverage in Washington State, but which will lose the business moving forward.  They serve over 45,000 patients in Washington State and have been in this market since 1994 as a provider-led plan, focused primarily in southwest Washington.  It is unclear what this will mean for CUP moving forward.

The state had stated that a goal of the RFP process was add competition to the marketplace to help drive innovation.  Currently, there are 6 plans serving the market.  While at first glance this may appear to be a step back from driving competition, perhaps the influence of these more highly capitalized plans will bring about more competition even if there are fewer options for patients and providers.  This will get borne out more fully as the final negotiations move forward and the assignment of plans to counties is concluded.

Molina Healthcare, with about 50% of the current market, stood to lose the most with increased competition.  With a breadth of plans, and designation by county, it was thought that at a minimum, Molina would likely lose out in important market areas.  Given CUP’s base in Clark County, that would have been one obvious area where, since only 2 plans will typically be awarded a county, it might well have been the case that Molina would have lost access to that county.

However, Molina’s position in the market may well now be even more secure than when this process began.

—  Molina is a known commodity in the marketplace.  While there are mixed reviews of Molina’s ability to partner with patients and providers in the market, they have been here and have been working this market for some time.  At a minimum, it would appear well positioned to keep it’s patients and marketshare in the face of patients and providers having to pick a new plan and endure the transition.

—  This is a market relatively slow to change.  That is true with patients, which will often stick with what they know rather than review their health plan options and change.  It is also true with providers, who are culturally cautious and aren’t going to be excited by one new plan with one new way of filing claims to get paid.

We’ll see as things move forward how this plays out in advance of July 1.  We’ll have a post on the market’s response to the announcement soon.