For first time, Washington state combines bid process for Medicaid, state employees, and subsidy program
Medicaid Bid Process
September 30, 1997
Stopping short of joint-purchasing on price and benefits, Washington State officials have collaborated on virtually every other issue in a recent procurement process for three distinct health insurance programs— the Healthy Options Medicaid program (HO), the Basic Health Plan (BHP) for low-income families, and the public employee insurance program.
Some 21 health plans submitting bids for any or all of the programs had to meet the same set of standards for quality and access, legal status and organizational structure, and quality improvement efforts.
"We now have one set of quality standards for all three programs," said Elin Meyer, contract and audit manager for the Health Care Authority, which administers both the BHP and public employees’ plans. The HO Medicaid program is operated by the Medical Assistance Administration.
Under the new procurement process, carriers are subject to penalties if they list doctors as part of their networks who "are not truly participating or have dropped out."
The new rules require primary care providers to accept all new enrollees, not just their established patients enrolling in managed care. For specialists, the carrier is expected to have "medically appropriate" practitioners under contract to deliver all services and benefits.
State officials also used the joint-purchasing effort to, in effect, require plans to participate in both Medicaid and BHP. Bidders for the recently awarded contracts were told "strong preference" would be given to those who submitted proposals for both Medicaid and BHP and to those whose networks had the "greatest degree of overlap in hospitals, primary care providers, obstetrical providers and pediatricians" between both programs.
"A lot of our enrollees fluctuate back and forth between the two programs, depending on their income level," said Ms. Meyer. Now, all family members can be served by the same health plan even if the adults are covered by the BHP and the children are covered under the Medicaid program. This will help avoid disruption of care, since enrollees will not have to switch health plans even when they do move between programs. State officials got their wish. The 14 bidders awarded contracts for the BHP program all agreed to provide coverage to people enrolled in the HO Medicaid program. Two plans that did not bid on both programs were rejected.
Lyle Quasim, secretary of the Department of Social and Health Services, said that while the "administrative efficiencies" of the joint purchasing effort are obvious, "long-term purchasing power is also a major factor, as the three programs represent nearly a quarter of the covered lives in Washington State." About 900,000 residents are covered under the three programs.
According to Julie Lake, director of the division of program support for the Medical Assistance Administration, state officials succeeded in using their new clout to achieve many of their goals. However, rate increases amounted to 4.9% rather than the 2% that was set by the legislature. But, she points out that the health plans "started out much higher than that" and that the increases are much lower than the national average.
The bids were evaluated in a four-stage inter-agency review. Ms. Lake said the state agencies have not yet evaluated how much money was saved in administrative costs by working together on the review process. Clearly, it was "less of an administrative burden on both agencies," she said.
The streamlined procurement process has won plaudits from the managed care community. The collaboration between the two state agencies is "wonderful," said Ed Freutel, vice president-government programs for Regence Washington Health, a Blue Cross & Blue Shield plan. "We’ve been waiting for years for it to happen. It’s a lot of work for us to respond to a three-part RFP."
In the long run, the state’s new approach will allow plans "to know more clearly where the state is coming from as a purchaser and a partner," he said, noting that "the state has not always been a reliable business partner" in the past.
Provider access has been an issue of particular concern to the Washington State Medical Association (WSMA) Medicaid Liaison Committee, which has questioned whether the networks of carriers currently participating in Healthy Options have the right quantity and mix of specialties to serve patients adequately.
"We’re happier with the way things look now," said Bob Perna, WMSA’s associate director of professional affairs, citing new requirements and penalties instituted by the state.
Contact Ms. Meyer at 360-923-2801; Ms. Lake at 360-586-6517; and Mr. Freutel at 253-573-3200.
For first time, Washington state combines bid process for Medicaid, state employees, and subsidy program
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