State healthcare administrators, lawmakers brace for new Medicaid re-procurement scrum

by | Nov 7, 2023

  • Florida’s Medicaid managed care contracts, worth billions, are up for renewal as the state enters a re-procurement process, with 11 providers including Centene’s Sunshine Health vying for new six-year agreements.
  • The re-procurement follows a $9 million fine levied against Centene for billing glitches affecting over 120,000 Medicaid recipients, highlighting the challenges of managing large-scale healthcare contracts.
  • The selection of Medicaid MCOs will be under intense scrutiny to ensure future contracts meet the healthcare needs of Florida’s most vulnerable populations, with a focus on innovation and efficiency.

Florida’s healthcare landscape is poised for a significant shift over the next year as state administrators and lawmakers gear up for a re-procurement process that will determine the future of Medicaid managed care organizations (MCOs) in the state. This critical process, which occurs every six years, will see existing Medicaid contracts—worth billions—re-evaluated and renewed. The stakes are high as the contracts up for grabs will shape the delivery of Medicaid services for the next half-decade.

Florida’s Agency for Health Care Administration (AHCA) released an invitation to negotiate on April 11, 2023, setting the stage for what promises to be a highly competitive and scrutinized selection process. With the current managed care contracts set to expire on December 31, 2024, the re-procurement process will conclude at the end of this year, granting successful companies access to the lucrative service contracts.

The state has announced a list of 11 providers who have responded to the invitation to negotiate, including notable names such as Sentara Care Alliance, ImagineCare, Sunshine Health (Centene), Aetna Better Health of Florida, and United Healthcare of Florida, among others. All are vying for a piece of the Medicaid pie, which not only offers financial rewards but also the responsibility of managing the healthcare needs of millions of Floridians.

The process has not been without controversy. Centene, operating as Sunshine Health in Florida, serves as a cautionary tale of the complexities involved in managing such large-scale healthcare contracts. In 2022, the company was fined $9 million by AHCA for incorrectly denying claims of more than 120,000 Medicaid recipients. The fine was part of a series of sanctions that included a temporary enrollment ban until the company could demonstrate corrective action.

The billing glitches, which were attributed to software issues following Centene’s merger with WellCare, affected payments for the state’s sickest and neediest children. The incident has raised concerns among healthcare advocates and beneficiaries about the robustness of the systems managed by these organizations and the oversight provided by the state.

Lawmakers and state health administration officials alike will be looking to avoid similar problems in the next go around. As Florida moves forward with the re-procurement process, the scrutiny of past performance and the potential for future improvements will likely dominate some of the early discussions that shape the outcome.

AHCA has emphasized the need for innovation and best practices to enhance the Medicaid system, seeking to reduce preventable hospitalizations and increase community-based care.

But the re-procurement process is not just a bureaucratic exercise. State officials view it as a reflection of Florida’s commitment to ensuring that its most vulnerable populations receive the care they need. At the same time, for the healthcare providers involved, the process can make or break their company for the foreseeable future.  While AHCA prepares to take a hard look at the fine print and lawmakers roll up their sleeves to dive into the budget, expect to hear a lot more about this in the weeks and months ahead.



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