Split Decision: Managed-Care Contracts, Round Two

Nov 6, 2017

“We are sitting here with a fourth of the state budget in front of us, and there is nothing we can do to adjust that for the next two years? I find that breathtakingly hard to comprehend,” House Appropriations chair Cameron Henry said, as he led the blockade of contract extensions for managed-care companies coordinating the state’s Medicaid services.


House Republicans on the Joint Budget Committee voted unanimously against approving the two-year extensions, even though every Senate member approved.

During the course of Friday’s meeting, Henry went head-to-head with Deputy Health Secretary Jeff Reynolds, making it clear he was looking at the dollars, rather than the contract terms.

“This contract is roughly half the size of LDH’s budget, correct?” Henry asked.

“Absolutely,” Reynolds replied.

“And LDH’s budget is half the size of the state budget?”

“It’s getting there.”

“It’s getting there,” Henry repeated. “So we’re talking about a significant — about a fourth, more or less — of the entire state budget.”

Henry asked about finding ways to reduce the state’s cost for pharmacy benefits. He was reminded there’s a legislative task force looking into that.

He asked about more stringent income verification for Medicaid recipients. There’s an active task force for that, as well.

And despite being advised delays could impair health care services for nearly one third of the state’s population — 1.5 million residents — Henry was insistent upon taking more time with the contracts, which expire in January.

“If we can save a dollar anywhere, I don’t see the harm in waiting a couple of months to get to that,” the appropriations chairman maintained.

“I need a 'yes' or 'no' now…" Reynolds began.

Henry interrupted, “You need a 'yes' or 'no' by December.”

“I need a 'yes' or 'no' now,” Reynolds continued. “In order to give me enough time to know what I’m doing.”

“November and December wouldn’t give you enough time?” Henry asked.

“If you tell me 'no' in December, what do I do then?” Reynolds asked.

“We can’t tell you 'no' in December,” Henry admitted. “But at least it will give you two months to try to figure something out to get a better deal.”

“I would disagree that would change one term on this contract extension,” Reynolds responded.

To be continued…