Centene wins Medicaid managed care contract in New Mexico

The downtown city skyline of Albuquerque, New Mexico early in the morning as the sun illuminates the buildings with a golden glow.
New Mexico’s Medicaid managed care program offers coverage and other services to 675,000 beneficiaries. (Getty/Bkamprath)

In the competitive world of Medicaid managed care contracts, Centene has notched another win.

New Mexico announced (PDF) Monday that it awarded Centene’s subsidiary, Western Sky Community Care, a five-year contract to provide coverage for the state's Medicaid beneficiaries, beginning in 2019.

In its bid for the contract, Centene beat out both Molina Healthcare and UnitedHealthcare, which both have managed care contracts with the state through the end of the year. Molina had already announced that it lost the contract.

Western Sky Community Care will join two other insurers—Blue Cross Blue Shield of New Mexico and Presbyterian Health Plan—that are already serving the state’s Medicaid enrollees. New Mexico’s Medicaid managed care program, Centennial Care 2.0, offers health coverage, long-term care and behavioral health services to 675,000 beneficiaries.

"We look forward to working with the state of New Mexico to build on the success of the existing Centennial Care program," Centene CEO Michael Neidorff said. "We are honored to continue delivering on our mission of providing better health outcomes for New Mexico residents at a lower cost to the state."

While winning the contract with New Mexico is good news for Centene, the two insurers that lost their contract bid may not take much of a hit. For UnitedHealthcare, the loss will likely have a “negligible” impact, Leerink Partners analyst Ana Gupte wrote in a research note (PDF).

And for Molina, the loss is consistent with the company’s focus on margin over revenue as it struggles to recover from recent financial losses. The New Mexico contract, Gupte previously noted (PDF), was unprofitable for Molina anyway.

In other Medicaid-related news:

Oregon to vote on tax to fund Medicaid program

In a special election today, Oregon voters will decide whether to tax some healthcare companies to help pay for rising costs associated with the state’s Medicaid program.

The measure would impose a 0.7% tax on some hospitals and a 1.5% tax on the gross health insurance premiums collected by insurers and on managed care organizations, according to the Associated Press.

The goal is to raise between $210 million and $320 million over the next two years to allow the state to continue covering enrollees who qualify for the program thanks to Medicaid expansion. Without that revenue, the state could lose $630 million to $960 million in federal Medicaid matching funds—which is why both hospitals and insurers have supported the new taxes.