(Editor’s note: This post will be updated as news comes in.)
As we predicted, WellCare Health Plan has won a significant contract – contracts in seven of eight of Kentucky’s Medicaid administrative regions – as state officials announce the winners in the state’s Medicaid manage-care bonanza.
WellCare shared its good news with Wall Street analysts via StreetAccount:
11:34 ET 7/07/11 [StreetAccount] WCG Wellcare Health Plans Selected by Kentucky to Serve Medicaid Program ($55.06 +$1.67)
- WCG announced that the Kentucky Cabinet for Health and Family Services has selected WellCare of Kentucky, Inc. to serve the state’s Medicaid program in seven of the state’s eight regions.
- Approximately 560,000 beneficiaries will be served by multiple health plans in these seven regions.
- Services for these members are expected to begin on or about October 1, 2011.
- WellCare currently serves approximately 13,000 Kentucky residents through its Medicare Prescription Drug Plans.
- The company is not updating its 2011 financial guidance in conjunction with this award.
But a surprising development is that St. Louis-based Centene Corp. is one of the company’s receiving part of the contracts, which, in total, are worth more than $4 billion. Full disclosure: Insider Louisville did not have Centrene as one of the five companies who responsed the Cabinet for Health and Family Service’s April request for proposal seeking managed-care Medicaid administrators.
Centene operates in 12 states including Arkansas, Arizona, Florida, Georgia, Illinois, Indiana, Maryland, Mississippi, Ohio, South Carolina:
CNC announced that Kentucky Spirit Health Plan, a wholly-owned subsidiary of Centene, has executed a contract with the Kentucky Finance and Administration Cabinet to serve Medicaid beneficiaries in Kentucky. The contract has an initial three-year term with the potential for four one-year extensions.
- Expect to serve approximately 180,000 members in Kentucky generating annual revenues in excess of $700M. The contract is expected to commence in Q4 of 2011.
- Updated financial guidance including this contract award will be provided during Centene’s 2011 Q2 financial results conference call on July 26, 2011.
11:17 ET 7/07/11 [StreetAccount] CNC Centene awarded Medicaid contract in Kentucky ($37.22 +$0.47).
Passport Health Plan’s contract has been renewed. Passport officials confirmed in a news release the Cabinet for Health and Family Services signed the firm to continue providing Medicaid services for members in the plan’s sixteen county service area, which includes Jefferson County and surrounding counties.
Passport’s spending problems and issues last year related to conflicts of interest led the Beshear Administration to revamping not just Passport, but Kentucky’s Medicaid system, switching from fees-for-services contracts to managed-care contracts.
Passport’s previous contract, which just expired, was worth about $780 million. The new contract, which cut the value of the new contract $38 million tp abpit $740 million, runs through June 30, 2012, according to a news release and media reports.
Also, Coventry Health Care is reporting it, too, has a BIG piece of the action, with contracts in seven of the eight regions:
BETHESDA, Md. (July 07, 2011) – Coventry Health Care, Inc. CVH +0.99% announced today that it has received notification from the Commonwealth of Kentucky of an award to provide services for the Commonwealth’s Medicaid program. The Commonwealth awarded contracts to Coventry in seven of the eight regions with implementation starting in the fourth quarter 2011 subject to the company fulfilling readiness requirements. Coventry has already started building the infrastructure necessary to enroll beneficiaries, including provider networks, health information technology resources, and other services. Coventry will provide further financial details after the commencement of the contracts.
Here’s more via Lex18.com in Lexington: CoventryCares of Kentucky – a Medicaid product of Coventry Health and Life Insurance Company. Coventry Health and Life Insurance Company is a subsidiary of Coventry Health Care, Inc. Coventry companies currently offer Medicaid managed care services in eight states: Florida, Maryland, Michigan, Missouri, Nebraska, Pennsylvania, Virginia and West Virginia.
The company notes in its announcement to Wall Street insiders that it “already has started building the infrastructure necessary to enroll beneficiaries, including provider networks, health information technology resources and other services.”
At the Frankfort news conference announcing the contracts, Kentucky Gov. Steve Beshear said expansion of managed care in place of fee-for-services contracts will save $375 million in Kentucky’s General Fund, which pays for most state programs, over the course of the new contracts.
The federal government pays for about 80 percent of Medicaid reimbursements, so total savings will reach $1.3 billion over three years, Beshear said, according to media reports.