Managing Medicaid Contracts

Nov 3, 2017

Louisiana’s Joint Budget Committee meets today to vote on two-year contract extensions for the state’s Medicaid-managed care organizations.

“Why two years? Because we have made dramatic changes to these contracts, not just tweaks,” Health Secretary Rebekah Gee explained when lawmakers began debating the extensions two weeks ago.


Appropriations chair Cameron Henry hoped for tighter controls over the five companies that review and process claims for covered Medicaid services.

“I know that the 23 months is huge," Henry said, “but 11 months or some variation of that would at least give us the opportunity to come back and look at this one more time.”

“If you were going to negotiate a lease and you said, ‘I want the 23-month pricing, but I want to renegotiate at 11 months,’ nobody’s going to do that with you,” Medicaid Director Jen Steele advised.

And Deputy Health Secretary Jeff Reynolds said the state isn’t going to get a better deal, money-wise.

“We’re paying the bare minimum that the federal government will allow us to run the program,” Reynolds told the committee. “So when these guys bid, they’re not bidding on price. They bid on their expertise.”

Secretary Gee said they’re working on complete revisions of the five contracts, but this is Louisiana’s best option right now.

“We do not have the number of state employees who have the expertise to do the services in the way that these companies do,” Gee said. “And we have seen our outcomes improved dramatically through the advent of managed care.”

Slidell Sen. Sharon Hewitt wants to see proof of that claim.

“Show me — not just are we doing enough breast screenings — but are we really reducing the incidence of breast cancer? I want to see the incidence of diabetes or whatever declining,” Hewitt said.

Gee suggested that, in the case of those particular ailments, proof of declining incidences is an unrealistic expectation.

“What can be measured is an issue,” Dr. Gee stated, adding that improving outcomes involves carefully selecting ailments with known causes and effective cures. “Can it be measured effectively? Can it be improved? And will it make an impact on health?”