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State official says Medicaid contract injunction will cost West Virginia millions of dollars


CHARLESTON, West Virginia — A court order regarding Medicaid managed care contracts will cost West Virginia millions of dollars and could affect delivery of services to some recipients, Bureau for Medical Services Acting Commissioner Cindy Beane said.

Kanawha County Circuit Court Judge James Stucky granted a preliminary injunction on Tuesday barring the addition of mental health services to Medicaid contracts with health maintenance organizations without competitive bidding. The expanded coverage is set to begin July 1, the Charleston Daily Mail ( ) reported.

"Based on independent actuarial analysis, the projected cost savings from these contracts to taxpayers in fiscal year 2016 is as high as $58 million for which $35 million results from the inclusion of Medicaid expansion and behavioral health into managed care in July," Beane said in a statement.

"The financial impact on the Medicaid program and the State of West Virginia will be devastating."

Stucky said in his order that existing contracts allow brief extensions should agencies go through the competitive bidding process.

"The State will suffer no gap in coverage, therefore, while it undergoes the proper procedures to comply with the law," the order said.

Five West Virginia taxpayers requested the injunction in a petition filed in April, arguing that the contracts with Coventry Cares of West Virginia, the Health Plan of the Upper Ohio Valley, UniCare Health Plan of West Virginia and West Virginia Family Health Plan are illegal because the DHHR entered into them without competitive bids.

"The purported relief sought petitioners is based on a seriously flawed understanding of how managed care contracts are required to be priced," Beane said. "Rates have been set as low as they can be as permitted by the Centers for Medicare and Medicaid Services."

Jesse Forbes, the plaintiffs' lawyer, told the newspaper that the next step will be a lawsuit that will seek to compel the state to bid out the contracts.

"We believe the court saw that the law is very clear and that the Legislature has spoken, saying these types of contracts need to be bid out," Forbes said. "This is a victory for taxpayers and the citizens of West Virginia because as a result of this, hopefully, the state will bid these contracts out and people will get better health care and more return for their money."

Beane said the order likely will result in a reduction of quality assurance and provider rates. A rate reduction could lower the number of providers willing to accept Medicaid coverage.

She said the Department of Health and Human Resources are studying legal options.

Information from: Charleston Daily Mail,

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