DHHR Estimates Millions in Savings Due to Privatization Efforts

​The West Virginia Department of Health and Human Resources (DHHR) is estimating more than $50 million in state and federal taxpayer savings in state fiscal year (SFY) 2016 by expanding the population served in managed care, adding several services to managed care, and decreasing the capitation rate (payment arrangement for health care service providers) for the traditional managed care populations.  This savings allows DHHR to offset some of the inflationary increases in health care experienced by other public and private payers. 

“DHHR has worked very hard to protect the best interests of state taxpayers, while at the same time ensuring Medicaid members are receiving the best possible care,” said Jeremiah Samples, DHHR Deputy Secretary for Public Health and Insurance. “By privatizing the delivery of Medicaid services and strengthening oversight of managed care entities, we are experiencing greater efficiency and accountability than the traditional Medicaid model.” 

In addition to lowering rates, DHHR last year implemented a quality withhold policy that pays private plans for performance and a Medical Loss Ratio (MLR) that requires plans to refund the state should they spend less than 85% of payments on care to citizens.  

“To effectively transition a public program into a private model, we must make sure that we are holding everyone accountable for providing quality services,” Samples emphasized.

DHHR is currently planning to move the Supplemental Security Income (SSI) population into managed care in SFY 2017, which could save $30 million in state and federal dollars annually once fully implemented.  The transition would also allow the Department to increase care management of this vulnerable population.

Medicaid is a federal program administered by the state to help with medical costs for some people with limited income and resources.