The Medicaid contracting mess
A look into what stories are missing from the narrative about Medicaid Managed Care Organizations
In a moment of male whimsy, U.S. Sen. Sheldon Whitehouse banged the gavel to open his keynote address at the May 28 health care summit at the R.I. Statehouse on Tuesday, May 28. Sen. Whitehouse began his address by lamenting the fact that the merger between Lifespan and Care New England did not go through. The Senator then urged the state to go all in and apply for the AHEAD program which would transition the state into a value-based, annualized payment system of care. The oversized role that Optum plays in the delivery of Medicaid managed care was not discussed.
This upcoming week, the Childhood Lead Action Project will host its annual celebration touting its efforts to prevent the man-made scourge of lead poisoning. The insidious nature of childhood lead poisoning is that it leads any number of educational, economic, and behavioral deficits that follow such children throughout their lives.
PROVIDENCE – For the second time in three years, the McKee Administration has had to slam on the brakes on its effort to award the Medicaid Managed Care Organization [MCO] contract to private health insurers, a contract worth some $3 billion a year for five years, for a total spend of roughly $15 billion.
The state’s MCO contract is one of the biggest – if not the biggest – financial investment in the health of more than 300,000 economically disadvantaged Rhode Islanders.
The state’s MCO contract had been awarded in July to just two applicants, Neighborhood Health Plan of Rhode Island and UnitedHealthcare of New England. But, following complaints from Blue Cross and Blue Shield of Rhode Island and Tufts Health Plan, whose proposals had been rejected, a new technical review has been ordered.
According to details contained in an Oct. 15 letter to Nancy McIntyre, the state’s purchasing agent, written by Jonathon Womer, the state’s Director/Chief Purchasing Office, the state’s award has been rescinded.
Instead, Womer ordered that the Executive Office of Health and Human Services “shall re-evaluate, on a consensus basis,” all of the four previous bids in response to the state’s request for proposals for the Managed Care Organization contract. [See link below to Womer’s letter, published initially by Rhode Island Current.]
Translated, the latest contracting snafu [the acronym for the military terms “situation normal, all fucked up”] has revealed some of the chronic symptoms of a broken health care delivery system in disarray – despite the best of intentions and diligence by many working within the state’s Medicaid enterprise.
The untold narrative.
To understand fully what has happened and why, it requires a lengthy historical discourse, delving into more than two decades of decision-making by state leaders
- The current Medicaid system was designed under the Reinvention of Medicaid, a legal framework approved by the General Assembly in 2015 and then funded in 2016 with an award of $129.7 million over five years from the Centers for Medicare and Medicaid Systems. [See link below to the ConvergenceRI stories, “A peek behind the curtain of reinventing Medicaid 2.0,” and “The Big Disconnect,” and “All the news that gets ignored.”]
Under the new system, the goal was to create a system of accountable entities to replace the fee-for-service payment method, where the accountable entities would share in the shared shavings created through bundled payments for a continuum of care. [See link below to ConvergenceRI story, “How do you become an ACO?”]
In 2021, a Senate Commission under the leadership of Sen. Josh Miller, undertook a comprehensive examination of the Executive Office of Health and Human Services, which had been created in 2006. Here is the series of articles that Convergence wrote, detailing the conversations and investigations by the Commission, which began with the story, “To have and have not,” and the opening sentence: “This is perhaps the most important story about the future of Rhode Island government that you will never read about – except in ConvergenceRI, because there were no other news outlets covering it.”
[See links below to ConvergenceRI stories, “To have and have not,” “Will Medicaid remain a part of RI EOHHS?” “Is RI prepared for the coming tsunami around Medicaid eligibility?” and “When do low Medicaid rates create a break glass emergency?”]
The biggest recurring problem was the failure to increase Medicaid rates for providers – rate increases that the General Assembly refused to fund because it would require new spending by the state. This led to a slew of disruptions within the entire health care delivery system – the inability to hire and retain a health care workforce, the economic breakdown of hospitals and nursing homes, making them vulnerable to acquisition by private equity firms
At the same time, the Unified Health Infrastructure Project, or UHIP, which the state attempted to rename as RI Bridges, proved to be a disaster, effectively destroying the state’s infrastructure for paying for Medicaid services for Rhode Island residents in need of nursing home and skilled nursing services. Nursing homes were forced to borrow money from the state to stay in business. [See link below to ConvergenceRI stories, “When it comes to UHIP, money talks, the needy walk,” “The case of the missing briefing book,” “Waiting for a technological Godot or someone like him,” “The issue is still UHIP,” ]
The onslaught of the COVID 19 pandemic in 2020 effectively broke the back of the entire health care delivery system in Rhode Island, exposing the financial unsustainable nature of the hospital enterprise.
Finding the missing narrative
ConvergenceRI met recently with a Rhode Island State Senator who wanted to know the history of the Medicaid program. In response, ConvergenceRI provided the Senator with some 30 stories published during the last decade that reported on what had happened.
One of the biggest parts of the missing narrative is the role that Optum, a for-profit, wholly-owned subsidiary of UnitedHealthcare, plays in the management of behavioral health care management for both Neighborhood Health Plan of RI and UnitedHealthcare of New England, the two largest private health insurers under the current Medicaid MCO system. [See link below to a story about Optum published by ConvergenceRI, “The state’s co-dependence upon Optum is not optimal.”]
Optum is one of the three largest pharmacy benefit managers in the nation. It is also one of the largest owners of physician practices. Further, it has positioned itself as a source of money to lend to physician practices in need of loans.
Without the ability to address the convoluted if not controlling role that Optum is playing in the delivery of behavioral health services for the private insurers responsible for providing Medicaid services under the Managed Care Organization contract, the deliberations under the new review of bidders remains an act of myopia, near sightedness. Indeed, at the health care summit held on May 28 at the State House, there was no mention of Optum. [See link to ConvergenceRi story, “Bang the gavel slowly.”]
As reporter Moe Tkacik talked about Optum in her interview with ConvergenceRI in June of 2023, “What I have found has been troubling.” [See link below to ConvergenceRI story, “Has health care fallen under the sway of organized crime syndicates?”]
Where do we go from here?
The path forward is difficult to predict, given all the disruptions to the health care delivery system in Rhode Island and throughout the nation, when it comes to how the Reinvention of Medicaid will end. Stay tuned.
