The new program is set to launch March 1
Louisiana's state health agency Thursday tapped a publicly traded managed-care specialist to run an overhaul and expansion of mental health and addiction services for the state's Medicaid and uninsured populations.
The impending contract for Magellan Health Services Inc. is part of Gov. Bobby Jindal's push to convert much of the Medicaid insurance system from the existing fee-for-service model to a system of coordinated-care networks. Separately, the Jindal administration is in the late stages of contracting with five firms to run coordinated care networks for about $2.2 billion in Medicaid business for more than 800,000 residents.
The Magellan contract, which still must be negotiated and approved by federal authorities, will involve behavioral health and addiction services not included in the other coordinated care networks. But the framework and purpose is similar: The state is seeking to streamline and coordinate services among multiple providers with a goal to improve health outcomes for residents while saving money for taxpayers.
The new program is set to launch March 1, 2012.
Existing Medicaid business shifting to Magellan's management currently is about $100 million in annual claims for tens of thousands of Medicaid recipients, according to the state Department of Health and Hospitals. But the new system ultimately will be worth more and involve about 150,000 people, including 50,000 children. The expansion comes as a result of a redesigned model that will allow the state to parlay state general fund money into federal matching money for Medicaid financing.
The state will negotiate and pay a per-patient fee to Magellan. The firm then will build a statewide network of providers -- from hospitals to independent psychiatrists to licensed addiction counselors and licensed group homes. Like health management organizations in the private sector, Magellan will manage the care that patients receive and pay providers rates that are negotiated between the firm and the provider. The influx of federal money will, if everything goes according to plan, mean more providers -- particularly for addiction -- who can be paid for treating uninsured adults not now covered by Medicaid. That population either isn't served now or gets mental health or addiction care through state-funded, locally based agencies such as the Metropolitan Human Services District or the Jefferson Parish Human Services District.
The local human services districts will continue to act as the primary access point for those seeking care. But some of the services they coordinate and manage will become part of the statewide network Magellan oversees. The human service districts also are themselves providers that currently can bill Medicaid when they serve a patient covered by the program. The new arrangement would require them to join the Magellan network and be paid that way rather than directly billing the state. It is not immediately clear what consequence the new system will have on the state general fund appropriations the Legislature assigns directly to those local "wraparound agencies."
Magellan Health Services ranks 700 on the Fortune 1000 list. It is traded on the NASDAQ exchange and closed at $48.20 per share Thursday, down from its $49.82 opening. The firm, which engages in public and private managed care, has provider networks in all 50 states.
Other firms that submitted proposals in response to the state's July 8 solicitation were Value Options Inc., Cenpatico of Louisiana Inc., Perform Care Behavioral Health Solutions and AmeriHealth Company
Bill Barrow can be reached at bbarrow@timespicayune.com or 504.826.3452.