$46M Medicaid contract extension given to company

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BATON ROUGE — Lawmakers gave another $46 million contract extension to the company that processes bills for Louisiana’s Medicaid program, with promises from the health department that it will seek more competitive deals for the work in the future.

House and Senate health committee members approved the one-year extension for Molina Medicaid Solutions without objection Wednesday. The company will be paid largely the same amount for the work next year that it received this year.

Lawmakers have extended the contract four times, often grudgingly, saying they aren’t sure they’ve got the best arrangement, but feel stuck while they wait for the health department to search for new contractors.

“I’ve never felt like we had any option at all,” said Sen. Dan Claitor, a Baton Rouge Republican. “It’s very frustrating.”
Gov. John Bel Edwards’ administration says the contract is outdated, providing a system that is difficult to use.

“We have a Sony Walkman we’re using. We need to use an iPad,” Health Secretary Rebekah Gee said.

Another company had been hired to take over the work in 2012, but former Gov. Bobby Jindal’s administration fired it amid questions about the selection process. Gee told lawmakers her department will be breaking up the work into multiple contracts and putting it out for bid.

That process, however, could take up to eight years, Medicaid Director Jen Steele said.

California-based Molina has been doing Medicaid claims processing for Louisiana since 1981, and the health department has added more tasks to the contract over the years.

The company does the prior authorization review for people to receive certain Medicaid services, enrolls health care providers into the program and pays the managed-care companies that coordinate care for a large portion of Medicaid patients.

With the latest contract extension, which runs through Dec. 31, 2018, Steele said Molina will have been paid $607 million since 2005.


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