Fierce competition for Medicaid contracts showcased in Iowa battle

December 20, 2015

Iowa's decision to remove WellCare from its Medicaid managed-care program shows how fiercely insurers will fight to secure a big-ticket source of revenue, Modern Healthcare reports. Iowa's Department of Administrative Services terminated its Medicaid contract with WellCare. In August, Iowa awarded contracts to WellCare and three other private insurers - AmeriHealth Caritas, Anthem and UnitedHealthcare - to manage the state's $4.2-billion Medicaid program. The contracts were supposed to start Jan. 1, 2016, but CMS pushed back the start date until March 1, 2016, because it thought the state was moving too hastily. Planning to fight the termination decision, WellCare says losing bidders derailed the contract by combing through the voluminous bid materials to find a lapse that led state officials to rescind the award. The main sticking point involves WellCare's past civil settlement and corporate integrity agreement and whether they were properly disclosed during the RFP process. WellCare expected to lose millions of dollars in the first 18 months of the three-year contract, but WellCare and other managed-care insurers view Medicaid as a booming business after the initial investments because states often award contracts to incumbents. 
Related News:
Governor: Iowa Medicaid transition will be ready March 1 - The Gazette
Iowa will continue Medicaid system for several months - WCF Courier
Is it immoral, stupid to refuse Medicaid expansion? - Forbes