If any more evidence were needed that Medicare Advantage plan sponsors wanting to get state contracts to manage care for Medicare-Medicaid dual eligibles need a strong Medicaid foundation, the proposed WellPoint, Inc. deal to acquire Amerigroup Corp. probably supplies it. Not only is the agreed purchase price a knock-your-socks-off 43% above Amerigroup's stock price at the time of the announcement, but also the deal comes shortly after Ohio's scoring of health plans applying for its intended duals initiative showed WellPoint badly trailing competitors with a bigger Medicaid stake. It is states doing the deciding on what kinds of duals programs they want to have, and they not surprisingly, observers say, seem to be making those choices on the basis of the entities they're familiar with — namely managed Medicaid plans. California, for instance, required plans applying for selection to have Medicaid contracts with the state.
The potential for coming up empty-handed is not being lost on MA companies that have hopes of landing a role in some of the upcoming demonstration programs, to be funded through the CMS Center for Medicare and Medicaid Innovation. In testimony during a July 18 Senate Select Committee on Aging hearing on the duals initiatives, for example, Shawn Morris, president of development and innovation at the HealthSpring unit of Cigna Corp., said, "In carrying out the Capitated Financial Alignment Model, we should not overturn this structure [i.e., MA plans' existing role with duals through Special Needs Plans] by preventing Medicare Advantage plans from participating or by requiring beneficiaries to relinquish the current coverage they have actively chosen."
Is the choice facing MA plans as bleak as either finding a managed Medicaid partner or forgetting about any major role in the duals initiatives? Should it be? Is there anything at this stage that MA sponsors can do to reverse the trend, and what will it mean for MA Special Needs Plans if they can't? Is the die cast, or is there, to mix the metaphor, a ninth-inning rally in the offing?