Sparrow Health System’s Physicians Health Plan will transfer its 21,000 Medicaid customers to another company by Jan. 1.
The Lansing-based health insurance company began notifying healthcare providers and its members earlier this month that they will be transitioned to Blue Cross Complete. PHP lost its bid to provide coverage through Michigan’s Medicaid program in the tri-county area on Nov. 17.
Detroit-based Blue Cross Complete of Michigan is a joint venture between Blue Cross Blue Shield of Michigan and AmeriHealth Caritas that previously served Medicaid members in Livingston, Washtenaw and Wayne Counties. The company won multiple bids on Nov. 17, allowing it to provide service in 29 counties in southeastern and western Michigan.
“We felt that Blue Cross Complete was the closest network match to Sparrow PHP’s provider network and cause the least disruption for our members,” said Dennis Reese, president and CEO of PHP, in an email. “Both Sparrow PHP and Blue Cross are committed to making this transition as easy as possible for our members.”
Contracts are up for review every few years by the Michigan Department of Health and Human Services. In October, DHHS assigned the counties that health insurance companies would be allowed to serve under state contracts.
“As tens of thousands more Michigan residents receive health care through Medicaid managed care plans, Blue Cross is grateful for the opportunity to serve them,” said Daniel Loepp, president and CEO of BCBSM, in a news release. “We also are prepared to partner with the state to meet our shared goal of transforming health care through pay-for-value and integrated care efforts.”
Aside from Blue Cross Complete, other companies that won the Medicaid bid in the region were McLaren Health Plan, Molina Healthcare of Michigan and Meridian Health Plan.
To win a bid this year, companies had to meet criteria outlined by the Michigan Department of Technology, Management and Budget. PHP failed to meet enough of the criteria on Oct. 13 and was not recommended for a bid. It appealed the decision on Oct. 20, asking that more points be added to its score. The appeal was denied on Nov. 13.
The last bid was in 2009, which lasted three years and was extended by three one-year options, said Jennifer Eisner, public information officer for DHHS. This year’s contacts will last for five years with three one-year options for extension.
Sparrow PHP estimated the loss in members will create a $9 million budget shortfall that would result in 40 staff cuts from the company, which employs 130. PHP estimated the loss of its members and employees will take $3 million out of the local economy.
The cuts, along with the transition of clients, will be completed by the end of the year.
Date: December 1, 2015