CHARLESTON — Delegates focused more questions on why the Department of Health and Human Resources prefers contracting with a company to oversee healthcare for foster children, rather than spending the money to shore up the agency’s own resources.
“Are we as a department unable to provide the services we’re sending out as an mco?” asked Delegate Chad Lovejoy, D-Cabell, during a meeting of the House Judiciary Committee.
Lovejoy, a lawyer who said he had read an entire 700-page contract that DHHR has ready to bid, focused his questions on the necessity of a managed care organization.
DHHR has said it needs expertise from a managed care organization. The agency was already proceeding with its contract when lawmakers included the issue in a broader bill meant to address West Virginia’s growing foster care needs.
“It will be a tool that can be used by the department to deliver better services,” said Jeremiah Samples, deputy director of DHHR.
Lovejoy followed up. “Is there any way to summarize the new services that aren’t currently being done by the department?”
Samples described — as the agency has done throughout the legislative process — a managed care organization being able to fill an information gap.
He suggested a child entering state care in McDowell County, for example, could wind up being transferred to Florida because of special needs or placement issues.
That presents a challenge for coordinating healthcare services if the child returns to West Virginia, he said. In other words, it may not be immediately clear to West Virginia’s foster care system what healthcare services or diagnoses the child received while away.
Similar questions and responses have been a theme during consideration of the foster care bill along its path through three committees — House Senior Children and Family Issues, Health and Human Resources and now Judiciary.
West Virginia’s ongoing opioid addiction epidemic has put more and more strain on the foster care system. DHHR has reported there are about 7,000 children in foster care.
DHHR has said managed care would provide a benefit of tracking foster children as they move through the system, including practical matters such as records of doctor’s visits.
The managed care organization would be allowed to have overhead — administrative costs and profit — of about 10 percent.
That’s a point that concerned Lovejoy.
“What I’m struggling with is, the one mco that wins the contract will receive for an administrative fee 10 percent of the contract,” he said.
Samples described an estimated $225 million worth of services to be managed by the company.
He had given a slightly different description in earlier committee appearances. In those cases, he made reference to $350 million in spending by the Bureau of Children and Families. But today he said only a portion of that — the $225 million — would be in this contract.
Of that, Samples said, there would be 10 percent for administration and profit.
The actual profit portion, he said, is about 1 percent.
So that would be about $2.25 million in profit for the managed care organization.
“If we instead put it into DHHR for these services, would that not be a possible alternative to using this outside company?” Lovejoy asked.
Samples said the bulk of the $225 million in spending would occur one way or another.
“The $225 million is anticipated spend anyway,” he said. “So this entity comes in, helps us coordinate these services and through these various strategies of insuring there’s not duplication of services, ensuring that placement is not inappropriate, that will result in savings.”
The House Judiciary Committee didn’t quite finish discussion of the bill on Friday morning. Committee members were reconvening on Friday afternoon.
