MCOs shift Medicaid landscape

‘We are disappointed that they are taking away quality customer service and care’
Friday, August 18, 2017

YARMOUTH, Maine – Managed care organizations targeting single-source or preferred provider contracts to provide DME and supplies for Medicaid recipients is a trend that’s spreading across the country, according to the results of a recent HME Newspoll.

Fifty percent of respondents to the poll report that an MCO in their state has successfully implemented such a contract, and 61% report an MCO in their state is in the process of moving to such a contract.

“Providers were not involved or asked for input with this decision,” wrote Tamme Dustin, president and owner of Herron & Smith in Hooksett, N.H., where MCO New Hampshire Healthy Families, part of Centene Corp., has contracted with Medline to provide incontinence supplies for its members starting Oct. 1. “We are disappointed and frustrated that they are taking away quality customer service and care for the beneficiaries who have built relationships over the past few years with the provider group.”

The Newspoll is a follow-up to a story on MCOs in Indiana and Texas targeting contracts with distributors to provide DME and supplies to their members. One of the MCOs, Superior HealthPlan, also part of Centene, recently delayed the start date of its contract with Medline until Oct. 1 and is contemplating recasting the contract as “preferred provider” vs. “single-source” to make it more clear that members will still have their choice of provider.

In some states, more than one MCO is targeting these contracts. In Tennessee, for example, there are three MCOs administering the Medicaid program: One contracted with Medline to provide incontinence supplies in 2015; another has contracted with the Edgepark Medical Supplies, part of Cardinal Health, to provide those supplies starting Nov. 1.

“Amerigroup rounds out the MCOs in our state,” wrote Juli Kirby, the office manager for Health Care Plus in Knoxville. “Will they follow suit?”

In Illinois, stakeholders have been successful so far in beating back these contracts, but one respondent is realistic that the threat will likely never be gone.

“This was on the table in Illinois a couple of years ago but was pulled back,” the respondent wrote. “Our state association got involved and helped with the efforts against this, but we still feel single-source contracting is a strong possibility in the state. I am also wondering if other payers will move to this model. It is concerning how this will affect the beneficiaries, in regards to the lack of face-to-face instruction of the products.”

A respondent in Pennsylvania reported that an MCO there will at least have an “any willing provider” provision in its contract. But when the reimbursement attached to these contracts are as low as they are, that’s little consolation.

“We’re so sick of being cut,” said one respondent. “There is nowhere left to cut.”


Most of these MCO's are really creating the cut.  They put these products out to bid.  Medline, Edgepark, McKesson etc can afford to go low.  They have their own private labels but also, the very manufacturers these DME providers work with (First Quality, Covidien etc) provide the big boys the pricing they need to win as well.  DME dealers keep harping on the big boys and the MCOs.  You should also include the manufacturers.  They negotiate special contracts on these deals as well.

In Pa, my understanding is that the "any willing provider" provision is for six months only. We have been trying to become in-network providers with the chosen MCO's in our areas, but they are either ignoring our applications or flat out rejecting us, stating that they have enough providers. It will eventually cost us half of our business. It's a nightmare.