UnitedHealthcare, Neighborhood Health Plan Win Rhode Island Medicaid Contracts

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Dive Brief:

• Rhode Island has awarded Medicaid managed care contracts to two insurers, UnitedHealthcare of New England and Neighborhood Health Plan of Rhode Island, which are estimated to be worth $3.1 billion in the first year, according to the state’s Executive Office of Health and Human Services
• The state currently has three managed care organizations: UnitedHealthcare, Neighborhood Health Plan and Tufts Public Health Plans. Tufts didn’t receive a new managed care contract.
• The new contracts, which begin July 1, 2025, will last five years, with the option to extend the deal for another five years, according to a Tuesday press release. 

Dive Insight: 

Most states used managed care arrangements to deliver health benefits to their Medicaid beneficiaries, where state agencies contract with insurers and pay them per-member per-month rates. Contract schedules vary by state, though they usually last three to five years. 

Rhode Island’s Medicaid managed care organizations manage nearly 320,000 people each year, or 90% of the state’s Medicaid program, Rhode Island’s health and human services agency said.

The contracts can be lucrative for health plans who win the deals — especially in states with large Medicaid programs such as Florida. Rhode Island’s contracts could be worth $15.5 billion over five years, WPRI 12 News reported. 

In December, Rhode Island issued a request for proposals. Four organizations submitted bids, including UnitedHealthcare, Neighborhood Health Plan, Tufts and a newcomer, Blue Cross Blue Shield of Rhode Island, according to the Rhode Island Current.

Other bidders didn’t meet minimum technical proposal scores required for the solicitation, Rhode Island’s Executive Office of Health and Human Services said in its release Tuesday. 

Plans were required to receive a technical score of 85 points, which rated them on metrics like utilization and quality management, provider networks and access, according to a memorandum posted by the Current. 

However, Blue Cross scored just 63.22 points, while Tufts scored 54.38 points.

Neighborhood notched a technical score of 88.46, while UnitedHealthcare earned 87.86.

UnitedHealthcare and Neighborhood’s new contracts include measures that will improve quality, including increased oversight on pharmacy benefit managers, financial sanctions and performance metrics, the agency said.

“Many of the improvements made to this contract will positively impact our members’ care, bring greater parity between medical and behavioral healthcare, incorporate Long-Term Services and Supports (LTSS) as an in-plan benefit, reduce unnecessary prior authorizations, and focus on health equity,” EOHHS Secretary Richard Charest said in a statement.