Report: Pa.'s HealthChoices Medicaid Managed Care Has Saved State Up to $5.9 Billion; Will Save $3.6 Billion More

Wednesday, May 18, 2011 General News
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Expansion of Program Would Yield Additional $1.1 Billion, Report Says

HARRISBURG, Pa., May 18, 2011 /PRNewswire/ -- HealthChoices, the high-quality Managed Care program for 1.2 million of

Pennsylvania's Medicaid recipients, has saved the Commonwealth as much as $5.9 billion in state and federal funds in a little more than a decade and is projected to save the State up to another $3.6 billion over the next five years, according to a report released today.

The report also found that if HealthChoices was expanded statewide, the State would save another $375 million over the next four years and up to a total of $1.1 billion through 2020.

The report, "An Evaluation of Medicaid Savings from Pennsylvania's HealthChoices Program," was prepared by the Lewin Group, a nationally recognized health care policy and research organization. It found that the HealthChoices Physical-Health Medicaid Managed Care Program "continues to provide Medicaid cost savings to the State through a broad and innovative array of cost containment strategies."  HealthChoices is operated by Medicaid Managed Care Organizations under contract to the Department of Public Welfare.  

The Lewin Group report was commissioned by members of the Pennsylvania Coalition of Medical Assistance Managed Care Organizations. It was designed to measure past and future program savings compared to the traditional Medicaid fee-for-service (FFS) delivery system and highlights the quality and cost containment advantages derived from Medicaid Managed Care.  The report also calculated cost savings that could be obtained by replacing the Department of Public Welfare's ACCESS Plus program and expanding HealthChoices statewide. 

The Lewin Group report estimated that, compared to the FFS program that HealthChoices replaced, the Managed Care program is estimated to have yielded savings of $5.0 to $5.9 billion ($2.9 billion to $3.3 billion in State funds) over the past 11 years (CY2000 – CY2010). 

It also projected that HealthChoices would save $2.9 billion to $3.6 billion in State funds over the next five years (CY2011 – CY2015) in the existing HealthChoices counties and between $5.4 billion and $6.6 billion for the ensuing five-year period (CY2016 – CY2020).

"As this report documents, HealthChoices has yielded massive savings to the Commonwealth while providing superior access and quality of care to Medicaid consumers," said Michael Blackwood, President and CEO of Gateway Health Plan. "In this difficult financial climate, it is critical for the Commonwealth to take full advantage of all opportunities to put available Medicaid funds to their best use."

"The Department of Public Welfare should be proud of its partnership with Pennsylvania Managed Care Organizations," said Dr. Jay Feldstein, DO, Regional President at the AmeriHealth Mercy Family of Companies. "Together, we have established a program that provides tremendous value to our consumers, to the taxpayers, and to our communities."

The Lewin Group report also estimated possible savings that would result by expanding HealthChoices statewide to the 42 counties where the ACCESS Plus program currently operates. Compared to the enhanced Primary Care Case Management model, ACCESS Plus, HealthChoices is estimated to have resulted in a total savings of $1.1 to $1.4 billion in State funds over the past five years (CY2006 – CY2010).  

The report stated that "the potential savings occurring under ACCESS Plus are deemed to be far below the amount available through the HealthChoices model."  Given the pressing need to maximize fiscal savings in Medicaid, the report concluded that "[t]his may be an opportune time ... to increase the role of HealthChoices in Pennsylvania."

According to the report, expanding HealthChoices statewide and replacing ACCESS Plus would yield:

  • Additional State fund savings of approximately $375 million between CY2012 and CY2015;
  • Additional State fund savings of approximately $725 million across the five-year timeframe CY2016 – CY2020; and
  • Additional State fund savings of roughly $1.1 billion across the nine-year period CY2012 – CY2020.

"We believe that the benefits of the HealthChoices Program should be available to all eligible consumers across the Commonwealth, not just those who happen to live in the current HealthChoices counties," said William S. George, President and CEO of Health Partners of Philadelphia, Inc.  

 Joel Menges, the primary author of the report, said several states "have been successful in expanding Medicaid managed care to their most rural areas," and that states currently in the process of extending their Medicaid managed care program to their most rural counties include Kentucky, Texas and West Virginia.  Menges added that HealthChoices is "a highly successful partnership that continues to benefit from its sound design and oversight from the State and from having experienced, longstanding MCO contractors."

"This report confirms that HealthChoices has been a clear winner for Medicaid consumers and Pennsylvania's taxpayers," said Heather Cianfrocco, President of UnitedHealthcare Community Plan.  

Cianfrocco added that Pennsylvania's Medicaid Managed Care Organizations "stand ready to continue to work with Governor Corbett and the General Assembly to identify novel and innovative programs to help contain health care expenditures."

John Lovelace, President of UPMC for You, concluded that "this report confirms that our hard work in focusing on ways to contain health care costs while ensuring access to quality health care has been incredibly successful."  

View the entire Lewin Group Report at:

SOURCE Pennsylvania Coalition of Medical Assistance MCOs

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