Unnamed Partner Helps Blues Give Managed Care Clients a Reprieve in New York State

More than 53,000 managed care clients in 6 western New York counties will not have to find a new insurer, thanks to an emerging partnership that caused the area’s BlueCross BlueShield carrier to reverse its decision to exit the health plans.

In a statement yesterday, BlueCross BlueShield (BCBS) of Western New York announced that policyholders in Eric, Cattaraugus, Chautauqua, Orleans, Wyoming, and Allegany counties will be able to keep Medicaid and Child Health plus plans, which BCBS spokeswoman Julie R. Snyder called a “difficult decision” that came “in spite of significant efforts to address chronic underfunding of these programs by New York state.”

In July 2014, BCBS of Western New York gave notice to state health department regulators that it was pulling out of managed care in the 6 counties, a move that would have been effective October 31, 2014. However, according to Snyder’s statement and a report in The Buffalo News, a potential partner came forward and offered to help run the plans with the Blues.

BCBS, which is the fourth-largest provider of Medicaid and Child Plus managed care in the affected counties, had previously canceled its Medicaid managed care program in Niagara and Genesee counties. The company cited losses of $40 million over the past 3 years in announcing its withdrawal in July.

News of the reversal was not a surprise, since BCBS had not sent out notices of cancellation 60 days prior to the projected October 31 cancellation date, which are required by law.

Difficulties with Medicaid managed care are not limited to New York state. Several states have reported problems with transitions to managed care, including slow payments to providers. Insurers in Kansas who contracted to run a new Medicaid managed care program have reported steep losses, prompting calls for an investigation. Yet, a recent survey by the Kaiser Family Foundation found many states still plan to try to expand managed care in Medicaid in 2015, in search of savings for state budgets.

The move by BCBS of Western New York means that the insurer has given formal notice to regulators of plans to suspend its withdrawal from the state-sponsored programs while it continues discussions with the unnamed strategic partner.

“BlueCross BlueShield of Western New York has a 78-year history in the region and remains committed to providing all our state sponsored members access to the highest quality health care by joining with a recognized industry partner,” Snyder said, without naming the partner.

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