Blue Cross will compete if state adopts managed care model

When members of the Health Reform Legislative Task Force meet Jan. 20-21, one of the issues they’ll be considering is whether certain state Medicaid programs should be administered using a managed care model – in other words, by a private company under a state contract.

If that happens, Arkansas Blue Cross Blue Shield wants to compete for that business.

“That’s something that we’ve watched closely throughout the process and are very interested in,” said Blue Cross CEO-elect Curtis Barnett in an interview at company headquarters Jan. 14. “And we do see that that special needs population that’s been identified, we see that there is a need for that group to have probably stronger intensive care coordination than they currently have through the process. … We feel that if the state does want to move toward managed care for that population, then we certainly intend to be fully involved with that.”

Barnett said Arkansas Blue Cross Blue Shield has not previously been involved in a managed care contract. However, he said the company has been studying Blue Cross Blue Shield plans in other states and would partner with them to provide the service.

“We think a lot of the things that we do here in the state and do very well with our, again with our provider relationships and our partners and some of the payment programs we already have in place would dovetail to some of the managed care programs,” he said. “So we feel that we’d be very successful at this if we got into it.”

The subject has come up because Gov. Asa Hutchinson and members of the task force are looking for savings in the Medicaid program, particularly as the state prepares to begin taking responsibility for 5% of the cost of the private option in 2017, a number that rises to 10% by 2020. The private option is the program that uses federal Medicaid dollars to purchase private insurance for Arkansans with incomes up to 138% of the federal poverty line.

Hutchinson has said the state must save $835 million in Medicaid costs over five years. That amount would equal $167 million a year, with the state’s share being $50-$60 million. That would cover the state’s 10% share of the private option in 2020.

A report commissioned by The Stephen Group, a consulting firm hired by a legislative task force, said the state could save money using a managed care model in certain programs.

But a group of mostly Republican lawmakers who have experience in the health care industry question if those savings will actually materialize. They have asked The Stephen Group to look for at least $835 million in savings over five years using the state’s current patient-centered medical home concept, where a primary care physician directs care with a goal of offering more effective and cost-effective services.

The Stephen Group is scheduled to report Wednesday on some of its findings so far.