Multiple mega firms pursue Kentucky’s $4 billion Medicaid contract including Coventry, UnitedHealth
Pursuit of Kentucky’s Medicaid managed-care contract is heating up – multiple contracts in eight regions projected to be worth $4 billion – with the largest health insurers and managed-care providers in the United States vying for a piece of the action.
Insider Louisville has confirmed through multiple sources that at least five companies have responded to the request for proposals Kentucky’s Cabinet for Health & Family Services posted in April, with negotiations between state officials and insurance executives continuing in Frankfort.
One bidder – WellCare Health Plans Inc. – has even posted on-line seven new top executive positions in Louisville related to the managed-care contract including managers of regulatory affairs, provider relations, network development and regional operations.
• WellCare, based in Tampa. WellCare is a for-profit, publicly traded company that trades on the New York Stock Exchange under the symbol “WCG.” WellCare executives posted on their website a letter of intent to enter into contract negotiations for Kentucky’s medicaid business. A spokeswoman declined to comment for this post. The company has about 2.2 million members, according to its financial statements. It reported about $1.6 billion in revenue for 2010.
• UnitedHealth Group, based in Minneapolis. UnitedHealth is the largest health insurer in the United States, ranked by revenue. United Health is a major Humana Inc. competitor, but is substantially larger than the Louisville-based health insurer/health care provider. UnitedHealth reported $94.2 billion in 2010 revenue compared to about $34 billion for Humana. UnitedHealth trades on the New York Stock Exchange under the symbol, “UNH.”
• AmeriGroup, based in Nashville. AmeriGroup is a for-profit managed-health care company and the eighth-largest publicly traded health care company ranked by revenue, according to its website. It has about 2 million members, with operations in Florida, Georgia. Maryland, Nevada, New Jersey, New Mexico, New York, Ohio, Tennessee, Texas and Virginia. The company reported $5.8 billion in revenue for fiscal year 2010. AmeriGroup trades on the New York Stock Exchange under the symbol “AGP.”
• Coventry Health Care, based in Bethesda, Md., is a for-profit that trades on the New York Stock Exchange under the symbol “CVH.” The company has about 1.6 million members, according to its website. Total 2010 revenue was $11.6 billion.
* Passport Health Plan. Passport is a non-profit entity created by local hospital groups including the University of Louisville and Norton Healthcare, and indirectly controlled by them. Passport currently has a $740 million contract to manage Medicaid in one of Kentucky’s eight regions. The region includes Jefferson County and 15 surrounding counties, covering about 165,000 people. That contract ends at the end of the month. AmeriHealth, based in Iselin, NJ, is the third-party contractor that supplies Passport’s staff other than top executives. AmeriHealth has about 265,000 members New Jersey, Delaware, and Pennsylvania, according to the company’s website.
Jill Bell, Passport vice president of public affairs, told Insider Louisville earlier this month that Passport is relocating to a larger space in Commerce Crossings from downtown. Bell added that Mark Carter, Passport’s interim CEO appointed by Gov. Steve Beshear, is “confident of Passport’s future.”
A 2010 state audit of Passport led to a total shake up of the managed-care entity including the replacement of all its top executives. Then, state officials’s request for proposals opened up administration of Medicaid in Kentucky to all comers.
Officials with Kentucky’s Cabinet for Health and Family Services declined comment. Jill Midkiff, CHFS communications director, said state officials can’t comment while a request for proposal is active. State officials are scheduled to close the negotiations and award contracts by July 1.
Sources tell Insider Louisville executives at several of the companies are confident they’ll land at least part of the Medicaid contracts, and are shopping for office space and other services.
The RFP states that a master agreement covering at least 800,000 Kentuckians – one out of every three residents – would provide and manage health care services for members enrolled in Medicaid. Services would include physical health, mental health and dental.
The RFP also makes clear the state hypothetically could award more than one company part of the business in each of the eight regions, or one company the entire piece of business. Or variations in between.
The transition must be complete no later than early 2012, according to the RFP including creation of a provider network along with all the management structures and systems needed to manage federal Medicaid funds as they flow into the state.