In Depth
12:05 pm
Tue January 15, 2013

3 Companies Win Big in FL Medicaid

Insurers competed by region for Medicaid's sickest patients.
Insurers competed by region for Medicaid's sickest patients.

Three companies stand out as major winners in Florida’s competition for contracts in the Statewide Medicaid Managed Care Program for Long-Term Care, a market worth an estimated $3 billion.

They are American Eldercare, Sunshine State Health Plan and UnitedHealthcare of Florida.

American Eldercare -- a little-known Delray Beach firm that specializes in caring for seniors in independent living, assisted living and rehab centers, as well as in their homes --  is the only company that won contracts to enroll customers in every region of the state.

The contracts, announced Tuesday morning by the Agency for Health Care Administration, are listed on the agency's web site separately by region.

The companies will compete to sign up about 90,000 frail elderly and disabled Medicaid patients so sick that they qualify for nursing-home  care. The state’s hope is that the companies, which assume financial risk, will provide enough nursing and support services to keep these patients out of nursing homes.

Because the long-term-care patients are so costly to Medicaid, the state elected to have them go first in the statewide managed-care enrollment experiment, if the federal waiver is granted. The rollout will begin Aug. 1 and continue through March of 2014.

Wall Street analysts have been watching closely to see which companies came out on top in the contracting competition. Soon after AHCA announced the winners Tuesday morning, Michael Wiederhorn and two colleagues at Oppenheim & Co. put out a note estimating the three top companies will enroll between 22,000 and 26,000 patients, triggering a revenue stream of between $900 million and $1 billion a year.

Wiederhorn noted that American Eldergroup is privately-held, so he encouraged investors to look at Centene, which owns Sunshine State Health Plan.

“Not only was this a large important market,” he wrote, “the winners of this bid could also have a leg up when the state outsources the rest of the Medicaid population.” Competition for those contracts is just heating up.

Sunshine State won contracts in 10 regions, losing only Region 2, around Tallahassee. United won contracts in nine regions, all but Regions 1 and 10. Region 1 is around Pensacola; 10 is Broward County. The largest concentrations of patients are in South and Central Florida.

Coventry took four regions, including the most populous, Miami-Dade. Amerigroup got just two regions, but they were big ones: Miami-Dade and Broward.

Companies that were rejected include  three based in the Tampa/St. Pete area: WellCare , Freedom and Universal.

Humana also was rejected, even though it has the largest Medicare membership in the state. It has not been a big Medicaid player in Florida.

On Tuesday, AHCA announced the long-term-care Medicaid managed-care program will be launched on Aug. 1, assuming Florida gets its waiver. The rollout will begin with Region 7, which includes Orlando and Melbourne, and will add regions month by month. For details, see Health News Florida's coverage.