DHH Announces Five Contract Recommendations for Next Phase of Bayou Health

Recommendation promotes recipient choice, adds benefits for enrollees and providers 

Friday, Oct. 24, 2014  |  Contact: Olivia Watkins; (225) 342-7913, olivia.w@la.gov

Baton Rouge, La. -The Louisiana Department of Health and Hospitals (DHH) today announced the recommendation of five managed care organizations (MCOs) to administer the next contract period for Bayou Health, which has transformed the way two-thirds of the state's Medicaid recipients receive health care services. All of the health plans selected will operate statewide.  

The Bayou Health program currently includes five health plans operating under two models. Earlier this summer, DHH announced changes to the program aimed at improving budget predictability, providing greater opportunity and incentives for MCOs to improve recipient health outcomes, adding benefits for Bayou Health recipients, and streamlining coordination between Bayou Health and the state's behavioral health managed care program. The most significant change for Bayou Health is the consolidation of its two models into one risk-bearing MCO model, in which managed care organizations are paid a monthly flat fee for managing the care of Medicaid recipients, reimbursing providers for services and maintaining a robust network of subcontracted providers to ensure benefits for Bayou Health members. 

Recommended Bayou Health Plans

• Aetna Better Health of Louisiana (new entrant)
• Amerigroup Louisiana, Inc. (current prepaid incumbent)
• AmeriHealth Caritas Louisiana, Inc. (current prepaid incumbent)
• Louisiana Healthcare Connections (current prepaid incumbent)
• UnitedHealthcare Community Plan (current shared savings incumbent)

The health plans were selected through a competitive procurement process and the release of a Request for Proposals (RFP) to solicit qualified providers. The RFP provided the department with the discretion to award contracts to between three and five MCOs. All three of the current prepaid plans were recommended for contract award, including Louisiana Healthcare Connections whose parent company Centene recently purchased the shared savings health plan Community Health Solutions. The other Bayou Health shared savings plan, UnitedHealthcare Community Plan, has been recommended for award of a prepaid health plan contract. One new entity, Aetna Better Health of Louisiana, was recommended for a contract award, resulting in a total of five prepaid health plans from which enrollees can choose. 

The proposals collectively include dozens of added benefits and services for both Louisiana recipients and providers. Examples of added value for recipients include certain vision and dental benefits for adults not covered under legacy Medicaid, coverage of certain vaccines for adults, weight management programs, benefits for over-the-counter drugs, 24-hour nurse support lines, physician home visits for postpartum care, and incentives to complete wellness screenings and other preventive care. Examples of added value for Louisiana providers include financial incentives for achieving quality and outcome metrics like enhanced wellness screenings or reduced emergency room use, enhanced reimbursement for preventive services, shared savings arrangements, and assistance in achieving medical home practice changes. The health plans will also collectively employ approximately 1,000 Louisiana-based staff, including care managers, social workers, billing specialists, plan leadership, and others.

"We were so pleased to receive five excellent proposals which will add value for both recipients and providers and enable us to maximize enrollee choice," said DHH Secretary Kathy Kliebert. "We hold Bayou Health up against any Medicaid managed care program in the country, and I want to thank our Medicaid team for their dedication and hard work in making it a reality."

"The evidence continues to mount that both our enrollees and taxpayers are better off because of Bayou Health," said DHH Medicaid Director Ruth Kennedy. "Our health plan partners have brought incredible value to the program that was never possible under our old Medicaid model, improving health outcomes and providing additional benefits and services to their members. I'm excited about the even further improvements that the next phase of Bayou Health will bring." 

The RFP was issued July 28; five entities submitted proposals by the September 26 deadline. All five were recommended for award. All of the technical proposals, with certain proprietary business information redacted as outlined in state law and in the RFPs, along with the score sheets used to evaluate the proposals, are available for review by the public at www.MakingMedicaidBetter.com.

DHH used a consensus scoring process to extensively evaluate all proposals. Eight teams separately reviewed each proposal to examine a specific aspect of that proposer's ability to provide services for Medicaid recipients:

• Team 1: Financial Requirements
• Team 2: Qualifications and Experience; Organizational Structure; Program Integrity
• Team 3: Provider Network and Development; Provider Management; Non-Emergency Medical Transportation; Added Value to Providers
• Team 4: Member Assessment and Care Coordination; Coordination of Carved out Services; Case Management; Member Transition; EPSDT; Utilization Management; Chronic Care Management; Added Value to Employees
• Team 5: Pharmacy
• Team 6: Customer Service; Member Grievances and Appeals; Marketing and Member Education Materials
• Team 7: Quality Management; Added Value to Members
• Team 8: Information Systems; Claims Management

The teams met independently to score their specific areas, and then DHH contract support staff combined the eight teams' scores to determine each proposal's total score.  

An MCO's operating cost was not a factor in these contract recommendations because DHH pre-determined MCO rates based on utilization in the program and market trends. All MCOs must reimburse most providers at least equal to the Medicaid fee-for-service rate, and the MCOs are required to spend at least 85 percent on direct patient care.

Because cost was not a factor, the recommendations were based on a potential MCO's qualifications, experience coordinating care for Medicaid recipients, additional benefits or value and how the MCO would work with patients and providers to improve health outcomes.

Several steps remain before MCO contracts are final and the networks are ready to begin operations. The Division of Administration must approve the evaluation process and the final contracts. Additionally, MCOs will undergo a thorough readiness review before any network can begin providing services to Medicaid recipients. To ensure network adequacy, each MCO must demonstrate it has a comprehensive network of primary care providers (and specialists, hospitals, pharmacies, and other provider types) in place to treat patients, sufficient support staff to handle administrative processes and provider relations, and the ability to meet all the deliverables specified in its proposals. The Centers for Medicare and Medicaid Services, the federal agency that monitors states' Medicaid programs, will review each MCO's contract and network adequacy, and must approve the contracts.

The new contracts are expected to start on Feb. 1, 2015. Recipients will be given the opportunity to choose the MCO that best meets their needs during a 60 day annual open enrollment period scheduled to start in November. Recipients who are a member of a current prepaid health plan (Louisiana Healthcare Connections, Amerigroup Louisiana, and Amerihealth Caritas Louisiana) will automatically remain with their current plan if they do not choose a different plan. Members of the current shared savings plans (Community Health Solutions and UnitedHealthcare Community Plan) will be automatically enrolled in a health plan based on an algorithm that includes their primary care physician's network participation, and their own historical MCO relationships.  All members will retain the option to change health plans for 90 days after enrollment. 

The MCOs will coordinate health care services for over 919,000 Medicaid recipients, including adults with disabilities who do not receive Medicare, children under age 19, their parents and pregnant women. Medicaid recipients not covered in MCOs include nursing home residents, Medicare dual eligibles and recipients enrolled for some specialty service Medicaid programs. Individuals who receive home and community based services are not automatically enrolled but may voluntarily opt in to a health plan. Individuals not enrolled in Bayou Health will continue receiving care through the current legacy fee-for-service system. Additionally, dental care and specialized behavioral health services, will continue to be separately managed by the dental benefits manager Managed Care of North America (MCNA) and the specialized Medicaid behavioral health MCO that is expected to be recommended for contract award on October 31.  

Doctors and other medical providers can sign contracts with as many MCOs as they wish and may remain Medicaid fee-for-service providers to treat any patients who are not included in Bayou Health. 

For more information on Bayou Health, including updates on the process, please visit www.MakingMedicaidBetter.com.

The Louisiana Department of Health and Hospitals strives to protect and promote health statewide and to ensure access to medical, preventive and rehabilitative services for all state citizens. To learn more about DHH, visit http://www.dhh.louisiana.gov. 

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