Dive Brief:
- Louisiana's managed-care program covering about 900,000 of the state's 1.4 million Medicaid recipients, mostly children and pregnant women, is working to curb escalating health care costs, the state's top health official told state lawmakers July 18.
- Savings for Bayou Health managed-care plans were estimated at $29.55 per member, per month (PMPM), which state officials described as "significant dollars" when considering Medicaid's overall membership. Bayou Health began in February 2012, touted by Republican Gov. Bobby Jindal's administration as a cost-saving program that would improve health outcomes.
- Current state contracts with five managed-care companies will end in February 2015, and the state is preparing a request for new bids.
Dive Insight:
Currently, Louisiana uses two models in its Medicaid Bayou Health program: a prepaid, premium-based model is being offered by three companies; and a shared-savings model is being offered by two companies which get a small management fee, while providers are paid directly for services.
The Jindal administration said it is moving exclusively to the prepaid, premium-based plan model. Louisiana Dept. Health and Hospitals Secretary Kathy Kliebert said the prepaid program offers more budget predictability. In addition, she said the prepaid plan achieved greater savings as compared to shared savings and traditional fee-for-service Medicaid. PMPM costs were $232.80 under the prepaid model; $245.60 PMPM under shared savings; and $262.34 for FFS Medicaid, according to 2013 data.
"We believe the changes that we're going to make are going to make it a stronger system for the managed-care organizations, the providers and most importantly the people that we're serving," Kliebert said.