State picks private companies for Medicaid service

State health officials Monday named the five companies chosen to implement the Jindal administration’s new health care delivery system for the poor.

The managed care program will cover two-thirds of the state’s 1.2 million Medicaid recipients – mainly children – and moves the state toward privatization of a good part of its $6.7 billion health care program for the poor.

Critics have argued that the program diverts health care dollars into insurance company profits. Proponents contend the program will help reduce costs and improve the health of those covered by it.

Twelve entities vied for the contracts to offer “coordinated care networks” which emphasize preventive and primary care and emphasize “best practices.” Insurers or third party entities develop health care networks of physicians, hospitals and others to provide patient care.

“We picked the five best,” said state Department of Health and Hospitals Secretary Bruce Greenstein. “They are five plans with significant experience in the Medicaid market in changing the behavior of the recipients and enrollee that lead to better (health) outcomes.”

Nine companies were interested in implementing a prepaid program involving the payment of a flat sum, or insurance premium, to cover health care costs.

Chosen for the “prepaid” program were Louisiana Healthcare Connections Inc., AmeriHealth Mercy of Louisiana and AmeriGROUP Louisiana Inc.

Three others filed for a “shared-risk” model under which fees are paid for services rendered. Two were chosen: United Healthcare of Louisiana, Inc., and Community Health Solutions of America.

Up to three entities could be chosen for each health care region.

The CCNs are scheduled to be operational statewide by May 1. A phase-in begins in the Orleans area region Jan. 1.