Department of Human Services Announces Record Levels of Interest in Innovative Changes to Pennsylvania Medicaid

Pennsylvania begins shift to outcome and value-based payment structure.

Nov 19, 2015, 11:54 ET from Pennsylvania Department of Human Services

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HARRISBURG, Pa., Nov. 19, 2015 /PRNewswire-USNewswire/ -- Today, Department of Human Services (DHS) Secretary Ted Dallas announced that the state received the highest number of bids on record for its recent request for proposal (RFP) issued for physical health services provided through HealthChoices, Pennsylvania's mandatory Medicaid managed care program since 1997. 

Governor Tom Wolf launched Pennsylvania's Medicaid expansion plan in April 2015. Since the launch, more than 485,000 new Pennsylvanians have enrolled in HealthChoices, which now provides health care coverage to more Pennsylvanians than ever before.

"Governor Wolf's Medicaid expansion plan has allowed DHS to provide greater health care coverage in a streamlined manner to Pennsylvanians who are most in need," said Secretary Dallas.

HealthChoices delivers quality medical care and timely access to all appropriate services to 2.6 million children, individuals with disabilities, pregnant women, and low-income Pennsylvanians.  Annual spending for this program is approximately $12 billion in state and federal funds.

"The interest that we are seeing from our existing managed care organizations (MCOs) and from national MCOs who have never chosen to do business with the commonwealth before is a sign we are on the right track," said Secretary Dallas. "The shift to value based payments in these contracts will spur billions of dollars of innovative approaches to health care and result in even higher levels of quality for Pennsylvanians." 

The department received 11 proposals, several of which bid on the entire state:

  • Accenda Health (Capital Blue Cross)
  • Aetna Better Health of Pennsylvania
  • Gateway Health
  • Geisinger Health
  • Health Partners Plans
  • Meridian Health Plan of Pennsylvania (Meridian Health Plan of Michigan)
  • Pennsylvania Health and Wellness (Centene)
  • Trusted Health Plan (PA)
  • United Healthcare of Pennsylvania, Inc.
  • UPMC for You
  • Vista Health Plan as Keystone Family Health Plan and AmeriHealth Caritas Health Plans

When fully implemented, the changes proposed in the RFP will mark the most significant changes to Medicaid in Pennsylvania since the Department first moved to mandatory managed care 18 years ago.

"We will require MCOs to increase the amount of money they spend on contracts that reward value, care coordination, and better health outcomes rather than simply paying for services as they are provided," said Secretary Dallas. "We're shifting the focus to the patient as a whole and their outcomes, while providing higher quality care to those in the Medicaid system."

To drive Pennsylvania's Medicaid system towards these better outcomes, the new agreements will set targets for all MCOs to increase the percentage of value-based or outcome-based contracts they have with hospitals, doctors, and other providers to 30 percent of medical funds they receive from DHS within three years. The result will be that billions of dollars will be invested in options such as:

  • accountable care organizations (voluntary networks of hospitals, doctors, and other providers that work together to provide coordinated care to patients); 
  • bundled payments (increases value-based purchasing);
  • patient-centered medical homes; and
  • other performance-based payments. 

The MCO agreements will also include better integration of the physical and behavioral health systems and approaches like telemedicine to help serve areas of the state that do not have easy access to doctors.

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MEDIA CONTACT: Kait Gillis, 717.425.7606


SOURCE Pennsylvania Department of Human Services