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Medicaid contract loss affects 225,000

Copyright © 2018 Albuquerque Journal

The loss of Molina Healthcare’s Medicaid contract in New Mexico will affect 225,000 people in the state and slash hundreds of millions of dollars from the company’s premium revenues, according to a recent Securities and Exchange Commission filing.

The disclosure says Molina’s premium revenue for the nine months that ended on Sept. 30 was $893 million, or 6.3 percent of the company’s total premium revenue. The company also said it did not expect its New Mexico health plan to be profitable in fiscal year 2017.

According to the filing, the New Mexico Human Services Department informed Molina late Monday that it had not been selected for the state’s Centennial Care 2.0 program in 2019. The decision does not affect the company’s current contract, which runs through the end of the year.

More than 700,000 people are insured through Medicaid in New Mexico, about one-third of the state’s total population. About 225,000 of those are insured through Molina. The state’s decision means Molina’s Medicaid clients will need to be insured by other providers in 2019.

The Human Services Department told the Journal it expects to announce the recipients of the 2019 Medicaid contract by the end of January.

In a statement released Tuesday, Molina said it was disappointed by the state’s decision.

“As the largest Medicaid managed care plan in the state of New Mexico, and with 20 years of experience serving Medicaid members, we believe we are well-positioned to continue providing a high level of service to our members and providers,” the company said in the statement.

The state has declined to provide information about why Molina’s bid was rejected.

A Molina spokeswoman would not comment on the impact on the company’s New Mexico workforce. Molina employs about 1,200 people in New Mexico.

The Long Beach, Calif.-based Molina serves about 4.5 million people in 12 states and Puerto Rico.

The company’s performance in New Mexico has been uneven in recent years, and 2017 was no exception. In the summer, Molina said it would shed 81 jobs from its New Mexico workforce. Then, in September, the company announced it would add 250 jobs at its contact center. Two months later, DaVita Medical Group and the national pharmacy chain Walgreens announced they had ended their relationship with Molina. None of the parties involved would comment on the specifics behind the contract terminations.

In an investor presentation dated Monday, Molina CEO Joe Zubretsky said the company’s shareholder returns had been “unsatisfactory” and identified New Mexico as one of the markets that needed improvement.

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