The Department of Social Services has selected Community Health Network of Connecticut Inc. to negotiate a contract to administer Medicaid and the state’s other public health care programs, which serve nearly 600,000 people.

The Wallingford-based nonprofit currently serves as one of three managed care companies that administer the HUSKY program for mostly low-income children and their parents. The announcement followed a competitive bidding process. DSS anticipates that the first-year contract will cost between $70 million and $73 million.

Beginning in January, the state will overhaul the way its public health care programs are run. Currently, the state pays the three managed care companies a monthly fee for each HUSKY member, which the companies then use to pay medical claims. Critics of the system have said it gives the companies an incentive to deny care, since they keep whatever money they don’t spend. The state pays for other Medicaid recipients’ care on a fee-for-service basis, with no care coordination.

The state is moving to a new system in which Community Health Network will serve as an administrative services organization, or ASO, getting paid a monthly fee for each member to administer the program, but with the state responsible for paying medical claims.

The ASO will also be responsible for coordinating medical care of members. It will cover state residents in Medicaid, the HUSKY B program for children whose families earn too much to qualify for Medicaid, and the Charter Oak Health Plan.

“In essence, we are paving the way for improved customer service for HUSKY and Medicaid enrollees while pursuing savings for hard-pressed taxpayers,” Lt. Gov. Nancy Wyman said in a statement released by her office. “The move to one administrative entity will streamline and flatten overhead in these critical programs, which represent the largest service expenditure in the state budget at approximately $4.6 billion. At the same time, extending care management services to the older Medicaid population will improve patient health outcomes and lead to significant savings in the program.”

“Our overall direction remains system change and improvement,” Office of Policy and Management Secretary Benjamin Barnes said the statement. “The current Medicaid system for seniors, people with disabilities and single adults in poverty offers no coordination or support to patients beyond paying for their care. By the same token, the managed care system in HUSKY can be confusing to enrollees and has been identified as overly profit-driven at the expense of taxpayers.”

State officials hope that having a single company administering Medicaid and other programs will make it easier to collect data to measure outcomes, better target resources, and save money.

“It is critical to note that, for the first time, older adults and persons with disabilities with complex health care needs will get help from the Medicaid system in terms of care coordination,” DSS Commissioner Roderick L. Bremby said in the statement.  “Currently, many patients who are older or who have disabilities are not doing as well as they could because they have no outside support. Often, they need help with scheduling appointments and negotiating the health care landscape. The new system will offer support to our enrollees by working with their doctors and other health care providers to attain the best outcomes possible.”

Arielle Levin Becker covered health care for The Connecticut Mirror. She previously worked for The Hartford Courant, most recently as its health reporter, and has also covered small towns, courts and education in Connecticut and New Jersey. She was a finalist in 2009 for the prestigious Livingston Award for Young Journalists, a recipient of a Knight Science Journalism Fellowship and the third-place winner in 2013 for an in-depth piece on caregivers from the National Association of Health Journalists. She is a 2004 graduate of Yale University.

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