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Cook County Health tees up new winner for CountyCare contract

Thursday, November 19, 2015
Crain's Chicago Business
by Kristen Schorsch

Valence Health, one of the fastest-growing businesses in the Chicago area, could be tapped later this week to run a big piece of Cook County Health & Hospitals System's Medicaid plan. The deal could save the system up to $15 million a year if Valence takes over administrative services IlliniCare Health Plan now performs, said Steven Glass, who oversees managed care for Cook County Health. The system in August rebid a contract it awarded just last year to IlliniCare for $1.8 billion after executives said the company had become a bigger competitor for the same patients. IlliniCare, a division of St. Louis-based Centene, manages various health benefits for members of CountyCare, the health system's Medicaid managed care plan. In 2014, IlliniCare was the sole bidder for the contract and fought to keep it when the system said it was looking to re-bid the business. Cook County Health is among the largest public health systems in the country, with two hospitals and a network of clinics. Unlike the IlliniCare contract, Cook County Health is awarding the new agreement in pieces. On Nov. 20, the system finance committee is scheduled to vote on negotiating and awarding a three-year, $72.1 million contract to Chicago-based Valence for various administrative services. They include managing medical claims, providing member services and helping to establish a program to oversee CountyCare's performance with an eye on quality. If approved, the health system board could vote on the proposal immediately following the finance committee meeting. Valence would begin on April 1. The system could extend the contract twice for one-year each. Glass noted Valence's extensive experience working with hospitals and doctors in the Medicaid market, strong analytics and competitive pricing. Valence, which has about 1,000 employees and has been in business for 19 years, essentially builds, then manages health plans. It provides the strategy for health systems to transition into plans or take on more of the financial responsibility of patient care. Among its services, Valence builds software to help identify high-cost patients, such as “frequent fliers” to the ER.

 AGGRESSIVE PURSUIT Valence CEO Andy Eckert said the company pursued the CountyCare contract aggressively. The system was looking for a company to not just perform administrative tasks, but also to give it a new level of insight into managing patients to keep them healthy, Eckert said. “We're really, frankly, looking for partners interested in improving the overall health care effectiveness and efficiency in their populations,” Eckert said. Valence's local clients include NorthShore University Health System, a prominent four-hospital network based in Evanston, and Streeterville-based Ann & Robert H. Lurie Children's Hospital, which specializes in treating the sickest children. Chicago-based Family Health Network, a Medicaid managed care plan that competes with CountyCare for patients, also is a Valence client. Cook County Health will bid out at a later date other pieces that IlliniCare and other businesses now operate. They include managing dental, pharmacy, optical and transportation benefits. The system plans to take in-house behavioral health and coordinating care for patients among their various doctors. Keeping some services within the system helped cut costs for Cook County Health, Glass said. He added that the system is able to get a better bargain because CountyCare is bigger than when it was launched in 2012 with a goal of enrolling of 115,000 members. With 170,000 members, it's now the largest Medicaid managed care plan in Cook County and helped bring in fresh revenue and more insured patients for the system. “The competition for our business is more competitive,” Glass said. “We didn't have that stature when we put out the prior (request for proposal).” Valence was among four responders that bid for administrative services, and among 22 responders that bid on other pieces of work. Glass said he could not say what other companies bid until the contracts are finalized.

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