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posted: 10/19/2012 11:18 AM

Wis. BadgerCare Plus program faces financial woes

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Associated Press

MILWAUKEE -- Three of the four organizations that manage Wisconsin's BadgerCare Plus say they're losing money on the state Medicaid program, and two of those are at least considering pulling out.

The state has cut its payment rate by 11 percent over the past two years as it struggles to balance its budget, and the state Department of Health Services says it's working to develop rates for next year to make sure adequate options are available.

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Nonetheless, UnitedHealthcare is dropping its contract with the state within weeks, and Molina Healthcare Inc. has warned that it may need to do the same, the Milwaukee Journal Sentinel reported. Both say they're losing millions of dollars on the program because the state isn't paying nearly enough to cover the claims filed by its BadgerCare Plus patients.

A third provider, Children's Community Health Plan, reported that it also lost money on its state contract last year. The fourth, CommunityConnect HealthPlan, did not comment to the newspaper.

BadgerCare Plus covers almost 300,000 children and adults whose family income is lower than a federal threshold of about $46,100 for a family of four.

The state pays a fixed monthly fee to the managed-care organizations for each person covered by BadgerCare Plus. The organizations take responsibility for the cost of those patients' care and negotiate deals with hospitals, doctors and dentists.

The 174,000 people currently covered by UnitedHealthcare won't be affected by its decision to withdraw since, starting Nov. 1, the state will pay hospitals, doctors and other health care providers directly rather than go through that company.

Molina manages the care for 33,000 people in southeastern Wisconsin and 42,000 statewide.

From January through June, Molina paid out about $3.7 million more in medical claims than it was paid by the state, according to its second-quarter financial statement.

The company said it remains committed to the Wisconsin market and that it will continue to work with the state Department of Health Services and federal Medicare officials on payments to managed-care organizations.

Federal law says the state must pay health insurers rates based on expected costs.

"If we are unable to achieve rates that are actuarially sound, it may no longer be feasible for us to continue as a health plan in the state," Molina cautioned.

The company has told investors the rates for its Wisconsin contract won't cover costs.

UnitedHealthcare, a unit of UnitedHealth Group Inc., also has said that the state's payment rates aren't adequate for it to deliver quality care and service.

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