BadgerCare is in a period of transition in southeast Wisconsin and it could be a very bumpy period. As is well known, United Healthcare, which now covers about 174,000 BadgerCare participants in SE Wisconsin, informed the Department of Health Services during the summer that it is going to end its contract with the state on Oct. 31. Where those BadgerCare members will get their health care has not been clear.At a hearing this week, a DHS official said those families would be moved into the other HMOs that have BadgerCare contracts in the six SE Wisconsin counties.  According to Tim Stumm’s Wisconsin Health News, Andy Forsaith of the DHS Office of Policy Initiative and Budget said Wednesday that over the next five months the BadgerCare participants now served by United Healthcare would be transitioned into Children’s Community Health Plan, Community Connect Health Plan, or Molina Health Care (Abri).   According to Stumm:

“Forsaith said that members can at any time call to select a new HMO. For those that don’t, the state will start auto-enrolling them into the three remaining organizations. Forsaith expects the process to be completed by March. He said it’s likely some members will slip back into fee-for-service during the interim.”

I was relieved to hear that news, because the alternative – fee-for-service care – is likely to be very problematic for many of the BadgerCare members, and it would probably be considerably more expensive for the state.  However, an article by Guy Boulton posted on the Journal Sentinel website late on Thursday explains why shifting these United Healthcare members into other HMOs could be quite a challenge.

The Journal Sentinel article reports that Molina is warning that it might also end its BadgerCare contract in SE Wisconsin if DHS doesn’t increase the current reimbursement rates in that part of the state. The article adds that Children’s Community Health Plan has also expressed concerns about losing money on its BadgerCare contract.  Boulton notes that: “The state cut payment rates to the managed care organizations by 11% in 2011 and then again this year as it struggled to balance its budget.”

Another important wrinkle noted in the article is that Molina has not been able to reach a contract with Children’s Hospital and Health System, which will no longer be part of its network.  The article adds that, “Molina said it continues to work with Children’s Hospital to renegotiate its contracts.”

These are important and worrisome developments, which we will follow closely. They will obviously put pressure on DHS to reconsider the sizable cuts in the HMO reimbursement rates for BadgerCare in that part of the state, and I hope DHS will raise those rates.

I also think these challenges for BadgerCare are symptomatic of broader structural issues with managed care in Southeast Wisconsin – though I can’t claim to have enough expertise about the Milwaukee area health care system to offer my own recommendations for solving such a complex set of problems. Those are issues that the public sector, health care providers and the rest of the private sector are going to have to struggle with as health care reform is implemented in our state.

Please comment on this blog post and share with us your own recommendations or concerns.

Jon Peacock