The head of West Virginia's Medicaid program defended a decisionby state officials to enter into $600 million in no-bid contractswith three health insurance companies.
Nancy Atkins, the commissioner for the state Bureau for MedicalServices, said the contracts were not required to be bid out by thefederal government.
'While some states have competitive bidding for managed carecontracts, it is not required' by the federal government, she saidin a statement.
Right now, the state has agreements with three health insurancecompanies to provide care to more than 160,000 Medicaid recipientswho receive government-sponsored health insurance because they areon welfare.
Those agreements are worth a total of about $290 million a yearto the companies - The Health Plan of the Upper Ohio Valley, Unicareand Carelink. They have been ongoing and continue to be extendedyearly.
But beginning next year, the state is planning to send morecustomers to those companies in the form of 55,000 more Medicaidrecipients, a deal worth about $270 million total.
Atkins emphasized the state is not spending any additional moneyon the new program - only shifting responsibility for the 55,000Medicaid recipients to the insurance companies that provide 'managedcare.'
But the decision by the Department of Health and Human Resourcesnot to bid out the expansion came under fire this week. Critics saythe arrangement could cost the state millions of dollars and thatthe plan may be illegal.
Atkins said, 'There is no 'better deal'' to be found by biddingthe contracts.
'All managed care providers that sign an agreement with Medicaidare paid an actuarially sound rate approved by the federalgovernment, so there is little competition in the area of rates paidto providers,' she said.
A spokesman for DHHR has said state law does not require theproject to go to bid, though state law authorizes the department'ssecretary to bid out such contracts.
Managed care companies help control the costs of providing healthcare, though Atkins also said the changes were not being done tosave money.
'It is being done to coordinate the variety of services neededaround the members - both those with physical and behavioral healthdiagnoses - and ensure members have access to all the care theyneed,' she said.
Critics have said they are not sure if the state or the insurancecompanies have a good plan for doing that yet.
