KHI News Service
December 5, 2011
"TOPEKA — Twelve companies have formally expressed interest
in bidding on a Kansas contract to provide Medicaid managed care services,
according to state procurement officials who have refused to identify the
firms.
However, it is no secret that among the 12 are some industry
giants in what has become one of the fastest-developing sectors of the health
care industry.
Of the seven most prominent potential bidders identified by
KHI News Services through interviews and various searches of public records,
one is a Kansas-based mutual insurance company owned by its policyholders. The
other six are for-profit, publicly traded companies headquartered in other
states or subsidiaries of such companies.
Here’s a brief rundown on each of the seven:
• Sunflower State Health Plan Inc., a subsidiary of St.
Louis-based Centene Corp. On Sept. 22, Sunflower filed application with the
Kansas Insurance Department for certification as a Health Maintenance
Organization. One of the state’s requirements of bidders is that they be a
Kansas-approved HMO. Sunflower’s application was still in the review process as
of last week, according to insurance department officials. Sunflower’s
president, according to the filing documents, is Christopher D. Bowers, senior
vice president of Centene’s health plan business unit. He previously ran a
Centene subsidiary in Texas.
Centene has employed several Kansas lobbyists, including
Matt Hickam, who until 2010 was a principal in Kensinger & Associates, the
lobbying firm owned by David Kensinger, chief of staff for Gov. Sam Brownback.
Centene also has employed lobbyist Ashley McMillan, former
executive director of the Kansas Republican Party and president of the advocacy
group Kansans for No Income Tax.
Other lobbyists registered with the Kansas Secretary of
State to represent Centene or its subsidiary, Cenpatico Behavioral Health, are
Mike Hutfles and James Gardner.
Centene, after a series of rapid acquisitions in the last
few years, now operates health plans in Arizona, Arkansas, Florida, Georgia,
Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Mississippi, Ohio, South
Carolina, Texas and Wisconsin.
Centene shares are traded on the New York Stock Exchange.
Centene reported a net loss of $43.6 million in 2006 but by last year had
reported annual net earnings of $94.8 million and had become a Fortune 500
company, according to its 2010 annual report.
“We are seeing increased demand for these products and
services as states continue to grapple with tight budgets. Specifically, there
is a growing trend for states interested in issuing RFPs to move their
highest-cost (Medicaid) beneficiaries, including Aged, Blind, or Disabled and
LTC (long-term care) into managed care, to maximize cost savings,” wrote Centene
Chief Executive Michael Neidorff in his 2010 message to shareholders.
Centene is among the companies that focus primarily on
providing Medicaid managed care services.
• Wellcare of Kansas is a subsidiary of WellCare Health
Plans Inc., which is based in Tampa, Fla. WellCare was launched in 1985 as a
Medicaid provider for the state of Florida. It has grown since then and now has
health plans in about a dozen states and offers Medicare plans. Recently, it
had a number of high-profile problems with state and federal officials. The FBI
raided the company’s headquarters in October 2007.
In March this year, the company’s former executive team,
which was sacked as a result of the investigation, was indicted for conspiracy
to commit Medicaid fraud. The company has paid the government more than $200
million in settlements since then but still faces whistleblower lawsuits from
former employees who claim that WellCare profited between $400 million and $600
million from defrauding the Florida and federal governments.
WellCare stock is traded on the New York Stock Exchange. The
company’s vice president of government and regulatory affairs is Bryan Baier,
once a staffer for former Kansas House Minority Leader Tom Sawyer. WellCare of
Kansas filed for Kansas HMO status with the state insurance department on Oct.
28. The application is still being reviewed, according to department officials.
The chief executive of WellCare and its Kansas subsidiary is Alec Cunningham.
• Amerigroup Kansas, Inc. is a subsidiary of Amerigroup,
which is headquartered in Virginia Beach, Va. Its president is Aileen
McCormick, also president of Amerigroup Texas. The company filed application
for certification as a Kansas HMO on Oct. 28. The company claims to cover one
of every 42 Medicaid beneficiaries nationwide.
Founded in 1994, it has 5,000 employees nationwide and
became a Fortune 500 company last year. Like Centene, Amerigroup is considered
a “pure-play” Medicaid managed care company in that Medicaid is its primary
business focus. Its shares are traded on the New York Stock Exchange.
Amerigroup is one of two managed care companies under
contract to New Mexico to provide services for that state’s long-term care
population. It has drawn complaints from the nursing home industry there. “I
don’t want to get myself in trouble, but Amerigroup is the one I get the most
complaints about now,” said Linda Sechovec, leader of a nursing home trade
group in New Mexico. Sechovec said both managed care companies in the state
have failed to make payments as promptly as the nursing homes would like, but
dealing with Amerigroup has been more difficult.
She said her group’s board of directors was considering
whether to oppose the company’s contract renewal. “We didn’t resolve that
question at our last meeting, but it’s on the table,” she said. “Should we
stage a protest against contractors that can’t get their house in order? That’s
Amerigroup.”
Amerigroup is the nation’s second largest provider of
Medicaid managed care services, covering about 2 million people.
• United Healthcare is a subsidiary of United HealthGroup,
which is headquartered in Minnetonka, Minn. The parent company has more than
80,000 employees and operates in all 50 states. It is considered a “multiline”
insurance company in that it offers plans covering people outside Medicaid.
Jarrod Forbes is a registered Kansas lobbyist for United Healthcare. The
company’s stock is traded on the New York Stock Exchange. The chief executive
is Stephen Hemsley. It is the nation’s largest provider of Medicaid managed
care services, covering about 3 million people.
• Coventry Health Care is a multiline insurance company that
operates nationally. It announced in October its agreement to purchase
Children’s Mercy Family Health Partners, which currently is the largest
Medicaid managed care company in Kansas. Children’s Mercy is one of two
companies under contract with the state to operate its HealthWave program,
which provides health coverage for children in low-income families and pregnant
women.
Coventry was incorporated in 1986 and since then has
steadily acquired a number of regional companies. Its chief executive is Allen
Wise. Its corporate headquarters is in Bethesda, Md. Its Kansas lobbyists
include former House Speaker Doug Mays, Cheryl Dillard and Steve Robino.
Coventry is the nation’s 10th largest provider of Medicaid managed care
services, covering about 462,000 people.
• Aetna is the nation’s seventh largest company when it
comes to Medicaid coverage, covering about 1.2 million people. It is
headquartered in Hartford, Conn.
• Blue Cross Blue Shield of Kansas is the state’s largest
provider of private health insurance. Providing Medicaid managed care services
would be a major new emphasis for the company, which is owned by its
policyholders. It has a well-established network of providers for private
insurance, and those relationships might give it an edge in developing a
network of Medicaid providers. It covers people in all Kansas counties except Wyandotte
and Johnson.
“We are constantly evaluating the changing marketplace and
exploring opportunities to grow our business so we may continue to serve
Kansans as we have done for nearly 70 years,” said company spokesperson Mary
Beth Chambers. “We recognize that Medicaid is likely to become a larger part of
the Kansas health care marketplace in the future, which is why we are giving
serious consideration to the state's Medicaid managed care RFP.”
This article from KHI News Service:
http://www.khi.org/news/2011/dec/05/major-insurance-companies-hunt-kansas-medicaid-con/
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