TOPEKA, Kan. (AP) — Kansas officials announced Wednesday that five companies have submitted bids for three contracts to manage Medicaid, but skeptics of Gov. Sam Brownback's plan to overhaul the state's $2.9 billion-a-year program saw it as another sign of potential problems.
The bidders all are out-of-state companies or Kansas affiliates of out-of-state firms. They include Amerigroup Corp., of Virginia Beach, Va., and United Healthcare, of Minneapolis, Minn.
Another bidder is Coventry Health Care of Kansas, based in Wichita, affiliated with Coventry Health Care, of Bethesda, Md. The state also received a bid from Sunflower State Health Plan, of Topeka, a subsidiary of Centene Corp., of St. Louis. Also among the bidders is WellCare of Kansas, affiliated with WellCare Health Plans Inc., based in Tampa, Fla.
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Potential contractors are being asked to provide managed care programs for the poor, disabled and elderly Kansans covered by Medicaid, while controlling costs for the state and improving the overall health of participants.
Brownback's efforts to overhaul Medicaid represent the first time the state has attempted to cover the disabled and the elderly, including those in nursing homes, with a managed-care program. His administration expects to issue the contracts this summer, have them start Jan. 1, 2013, and have each company operate statewide so Medicaid participants have a choice of coverage.
"We are encouraged by such broad interest and quality bidders," Lt. Gov. Jeff Colyer, a surgeon who led the team developing the Medicaid plan, said in a statement.
Some legislators in both parties and advocates for the needy, disabled and elderly have questioned whether the Republican governor is moving too quickly. They're skeptical that private companies can make an adequate profit while fulfilling the administration's goals.
Sen. Dick Kelsey, a Goddard Republican who has called on the administration to delay the contracts for six months, said he expected more bidders. Initially, 15 companies expressed enough interest to send representatives to a mandatory conference for potential bidders in December, and Kelsey called five bidders "not very many."
"It suggests that there are more problems with the situation than what is being acknowledged," Kelsey said.
But House Majority Leader Arlen Siegfreid, an Olathe Republican, said five bidders are more than enough to provide a competitive selection process. And, in the past, the state has struggled to attract interest from potential managed-care contractors because its market is relatively small, compared with other states'.
"It suggests that people who are bidders see this as good for them and, hopefully, good for the state," Siegfreid said.
Some legislators were disappointed that Blue Cross and Blue Shield of Kansas, the state's largest health insurer, did not submit a bid. Blue Cross officials announced earlier this month that the company wouldn't, saying the decision wasn't a criticism of the Medicaid overhaul but an acknowledgement that participating would require Blue Cross to make major changes in its business model by next year.
Sen. Laura Kelly, of Topeka, the ranking Democrat on the budget-writing Senate Ways and Means Committee, said the number of bidders indicates that companies could have difficulty living with the requirements of the contracts.
But Colyer and other administration officials have said the overhaul will lead to better coordination of services for high-need Medicaid participants and will eliminate duplication. State medical programs provide services for an average of 383,000 people a month, and the bulk already receive state health coverage through private contractors.
By bringing the disabled and elderly into a managed-care system, the state would add Kansans who need relatively expensive long-term services.
Legislators have a relatively small role in the overhaul because the Brownback administration is pursuing the effort through private contractors. Legislators could block an executive order Brownback issued earlier this month to reorganizing three state social services agencies, and some lawmakers have talked of forming a special oversight committee.
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