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Community Choice Michigan comes out of rehabilitation
Medicaid HMO is only plan in state to emerge successfully
OKEMOS, Mich., Oct. 1, 2004 – Community Choice Michigan, a nonprofit Medicaid managed health care plan, has emerged from 15 months of court-ordered rehabilitation. CCM is the only Medicaid HMO in Michigan to successfully come out of rehabilitation.
CCM’s successful emergence from rehabilitation was the result of a turnaround that began when the CareSource Management Group, a health care management services company based in Dayton, Ohio, began administration of the plan in August 2003.
At the time, CCM had a $6 million deficit, was reporting losses of $1 million a month, and had been in rehabilitation for three months. The plan was losing money for many reasons: it had agreed to pay some medical providers at rates substantially higher than the state Medicaid fee schedule; it was making inaccurate payments to some providers; it was not managing pharmacy costs well; and the state had not raised premiums paid to Medicaid HMOs since 2000.
CSMG worked diligently to turn CCM around. It accepted a discounted fee to manage the plan, renegotiated rates with some providers, installed a new claims-processing system to make accurate payments, and switched the pharmacy benefits manager to Express Scripts.
CSMG and the Federally Qualified Health Centers that sponsor CCM also secured a guarantee from the federal Health Resources and Services Administration for a $9 million loan from Fifth Third Bank. The loan, which closed Sept. 29, helps CCM meet state requirements for risk-based capital that Medicaid HMOs must have on hand. With the HRSA-guaranteed loan, which qualifies as a surplus note, CCM is projected to have $10.2 million by the end of the year.
In June, the Michigan Department of Management and Budget awarded CCM a two-year contract to provide Medicaid services not only to the 50,000 members it currently serves in 28 counties, but also to new members in up to 10 additional counties. The contract begins Oct. 1.
“We are thrilled CCM has successfully emerged from rehabilitation,” said CEO Karl V. Kovacs. “This could not have happened without the help of the Michigan Office of Financial and Insurance Services, Department of Community Health, Attorney General, the Health Resources and Services Administration, Judge James Giddings, Fifth Third Bank, the provider community, CareSource Management Group, and the Federally Qualified Health Centers that founded and continue to support our plan.”
About Community Choice Michigan
Community Choice Michigan is a nonprofit Medicaid managed health care plan that serves 50,000 members in up to 38 counties. CCM was founded in 1995 by 17 Federally Qualified Health Centers, which provide care to people in medically underserved areas. CCM’s provider network also includes primary care physicians, specialists, hospitals, nursing facilities, home health care agencies, pharmacies, and more. CCM is accredited by the Joint Commission on Accreditation of Health Care Organizations.
CCM is administered by CareSource Management Group, which offers a full spectrum of services for companies operating a managed health care plan. Among CSMG’s services are health-plan administration, including claims processing and payment, case and medical management, provider relations, quality improvement, and regulatory compliance; a member service center and 24-hour nurse hotline; and financial consultation and turnaround. CSMG also administers CareSource, a managed health care plan that serves almost 350,000 Medicaid consumers in 13 counties in Ohio. CareSource will also begin serving Medicaid consumers in 13 counties in Indiana starting Jan. 1, 2005.
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