FRANKFORT, Ky. — Gov. Andy Beshear and Cabinet for Health and Family Services Secretary Eric Friedlander announced Friday the Commonwealth of Kentucky has awarded the state’s Medicaid Managed Care Organization (MCO) contract to five health care companies that will manage benefits for the state’s Medicaid enrollees.
The five companies are Aetna, Humana, Molina Healthcare, UnitedHealthcare and WellCare. Aetna will also serve children in Kentucky SKY, the Medicaid risk-based managed care delivery program for the state foster care program and the Department for Juvenile Justice.
“Health care is a basic human right, and ensuring coverage for approximately 90% of Medicaid’s 1.4 million population is of the utmost importance to my administration,” Beshear said. “The expansion of Medicaid in the commonwealth has been lifesaving for many families who struggled to find and afford coverage. As we move forward, we must continue to provide equal access for every Kentuckian who needs quality care.”
Friedlander said the Finance and Administration Cabinet issued the request for proposals January 10, 2020. After a transparent and competitively bid procurement process, the contracts were awarded Friday.
“We look forward to working with the MCOs to improve the health of all Kentuckians,” said Friedlander. “We have strengthened the contracts to make sure that these companies are responsive to the needs of all Kentuckians.”
Key changes to the contracts include a focus on improvement of quality measures; increased transparency; strengthened reporting and oversight requirements; and pharmacy program changes. The contracts also provide incentives to address social determinants of health, which include all the factors that directly or indirectly impact Kentuckians.
Current contracts with Aetna (via Coventry Cares), Anthem, Humana (via CareSource), Passport Health Plan and WellCare were set to expire June 30. A six-month extension will be added to the existing contracts to give ample time to bring the two new contractors, Molina Healthcare and UnitedHealthcare, on board for a Jan. 1, 2021, start date. The initial term of the new contracts is through Dec. 31, 2024, at which time the cabinet’s Department for Medicaid Services may extend the contracts by six additional two-year periods.
Friedlander said all members would receive detailed communications about what to expect over the next six months.
Beshear canceled the managed care contracts awarded by the outgoing governor’s administration in early December. The initial contract award created public outcry from both lawmakers and health policy experts, who raised concerns about the review process and bias regarding certain companies.
Managed Care is a health care delivery system designed to manage costs, utilization and quality. Medicaid managed care provides for the delivery of Medicaid health benefits and additional services through contracts between Medicaid and the MCOs that accept a set per member, per month payment for these services. By contracting with MCOs to deliver Medicaid health care services, states can reduce Medicaid program costs and better manage utilization of health services. Improvement in health plan performance, health care quality and health outcomes are key objectives of Medicaid managed care.
Ensuring access to affordable health care is a top priority for Beshear and his administration.
On Dec. 16, 2020, after being in office only 10 days, Beshear’s administration notified the Centers for Medicare and Medicaid Services that he was ending the 1115 demonstration project, known as “Kentucky HEALTH,” that required Kentuckians to meet certain work requirements in order to have health insurance coverage.
Beshear also signed an executive order to protect the state’s Medicaid expansion program, which provides health care coverage to nearly 500,000 Kentuckians.
The contracts will soon be posted on the Finance and Administration Cabinet website.