HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that the Medicaid managed care program in Ohio has struggled from weak reimbursement, higher-than-anticipated medical costs and economic conditions that are driving more people into the program. According to the latest Ohio, Kentucky and Indiana Health Plan Analysis, the system has seen multiple insurers, including Anthem Blue Cross and Blue Shield's Partnership Plan, Centene Corp.'s Buckeye Community Health Plan and WellCare of Ohio, leave some or all of their service areas within the state.
According to a representative from Anthem's parent company, WellPoint Inc., changes made to its Medicaid operations are a result of the state's inability to provide adequate rate increases required to keep pace with the rising costs of healthcare.
"WellPoint's experience with the Ohio Medicaid managed care program is not unique, as other plans in the state, including those who have stayed with the program, have struggled with reimbursement rates not meeting the rising cost of care," said Rick Byrne, analyst with HealthLeaders-InterStudy. "The state responded with a rate increase that took effect on July 1. While that move will help insurers with their bottom line, the program will likely continue to struggle until economic conditions improve, which is largely outside of its control."
In addition to insurers, hospitals in Ohio, particularly in the Central Region, are also facing difficulties associated with the Medicaid program. In July 2008, the Medicaid HMO CareSource ended its contract with the Franklin County facilities of OhioHealth. Then in August, Mount Carmel Health System ended its relationship with CareSource citing challenges with handling the increased capacity of Medicaid patients once the Franklin County facilities were no longer on contract.
"The pressures around reimbursement rates and the economy are not unique to the health plans in Ohio, but extend to the providers, as well," noted Byrne. "Hospitals also face financial challenges associated with the Medicaid program."
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