Last week, the Michigan Department of Health and Human Services issued Medicaid contract recommendations for the state. A Nov. hearing before the State Administrative Board will determine whether Michigan takes the recommendations and converts from a county-based Medicaid approach to a 10-region system. The decision could cut the number of Medicaid HMOs, which cover 1.7 Medicaid members in the state, to 11 from 13. The HMOs risk losing six-year contracts worth a total of $42 billion.
Michigan plans to review decisions with Medicaid HMOs that have been appealed, but the recommendations were based on a comprehensive review, according to state Medicaid Director Chris Priest.
HAP Midwest had a net income of $19.1 million on revenue of $381.7 million in 2014, according to the Michigan Department of Financial and Insurance Services. So far this year, it has posted $12 million in profits on revenue of $238.8 million.
Taking the recommendations could cause major financial problems for Henry Ford, according to Allan Baumgarten, publisher of the Michigan Health Market Review. “It could affect their [strategic] plans” for expanding operations and potential partnerships, said Mr. Baumgarten.
Though on a smaller scale, the recommendations could also harm Sparrow Health System, which owns Sparrow PHP, a 20,000-member Medicaid HMO.
More articles on finance:
Abbvie’s Viekira Pak: $6.5M a year in avoidable costs, and putting patients at greater risk
Value analysis: No longer the buzz word in healthcare, but a way of life
Moody’s: Distressed public hospitals burdened by board turnover, regulations
Becker’s 3rd Annual Fall Chief Pharmacy Officer Summit is the top tier event that the people leading the future of pharmacy convene. This 3-day event is built specifically for Chief Pharmacy Officers and senior pharmacy leaders. The sessions examine the workforce, financial and clinical priorities shaping pharmacy today. Becker’s is where candid discussions flourish and new ideas thrive. Becker's 3rd Annual Fall Chief Pharmacy Officer Summit
