Insurers Dropping Out Of Connecticut Medicaid Program In Response To Disclosure Policy

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance
Article Date: 14 May 2008 - 8:00 PDT

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The Wall Street Journal on Tuesday examined how efforts by the state of Connecticut to expand disclosure among the HMOs in its Medicaid program have resulted in insurers dropping out of the program and have "left Connecticut's Medicaid program in turmoil, jeopardizing health care for thousands of poor residents."

According to the Journal, the "dispute" between the HMOs and the state began in late 2004 when Sheldon Toubman, a staff attorney at the New Haven Legal Assistance Association, filed a request under the state's freedom of information law to discover the frequency that HMOs rejected pharmacy requests to fill Medicaid enrollees' prescriptions. In 2007, Gov. Jodi Rell (R) "demanded more accountability" from HMOs participating in Husky, the state's Medicaid program, "essentially treating them as a public agency," according to the Journal. When two of the four HMOs participating in the Husky program refused to cooperate with Rell's requests, Husky officials took over administrative duties for the program, including the ability to set provider rates and managing the pharmacy benefits. In November 2007, Rell said she would terminate contracts with any HMO that refused to comply with her demands for greater disclosure.

In April, two of the HMOs pulled out of Husky. As a result, 120,000 Medicaid beneficiaries were forced to transfer to another insurer or to traditional Medicaid, which for some "meant delays in care, unfamiliar doctors or using facilities that were far away," according to the Journal. A third HMO will begin leaving the Husky program on July 1, and an estimated 226,000 beneficiaries will be reassigned -- some for the second time -- by the end of the year.

Anthem Health Plans and Health Net of Connecticut are challenging the public disclosure requirement in the Connecticut Supreme Court, while not-for-profit Community Health Network of Connecticut recently dropped out of the lawsuit. WellCare Health Plans had agreed to comply with the disclosure requirement but later opted to withdraw from Husky.

Although contracts with three new providers -- who have agreed to follow the public disclosure requirement -- should be signed by July 1, two of the insurers "have no existing Husky networks of doctors, hospitals and other health care providers," according to the Journal.

Keith Stover, a spokesperson for the Connecticut Association of Health Plans, said the HMOs "made every effort to come up with a reasonable and rational compromise." However, the state did not address the HMOs' main concern that public disclosure of the contracts could put the insurers' proprietary information at risk, according to Stover (Zhang, Wall Street Journal, 5/13).

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