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Cook County picks Medicaid health plan administrator for $72M contract

Wednesday, November 18, 2015
Chicago Tribune
by Ameet Sachdev

Cook County's public health system has selected a new organization to oversee its Medicaid managed care plan, after abruptly firing the administrator earlier this year.

Chicago-based Valence Health won the contract to be the "third-party administrator," beating three other bidders, said Steven Glass, executive director of managed care at the Cook County Health and Hospitals System.

The contract is worth $72.1 million over three years and included two one-year renewal options, Glass said. The contract will go to the health system's finance committee on Friday for approval. If approved by the health system's board, which also meets Friday, Valence will take responsibility on April 1.

In August, the county health system canceled a contract with IlliniCare Health just one year into the deal over conflict-of-interest concerns. IlliniCare has its own Medicaid health plan in the Chicago area.

Glass said the Valence contract will save the county $10 million to $15 million a year compared to the IlliniCare deal. He said the savings came as a result of a more competitive bidding process.

The county health system in 2012 started its own Medicaid plan, known as CountyCare, to enroll residents who gained health insurance through the expansion of Medicaid, a government insurance program for the poor, under the Affordable Care Act. As of October, CountyCare had about 163,000 members, making it one of the largest Medicaid plans in the Chicago area, according to state figures. IlliniCare had about 141,000 members.

Valence, a privately held company, received $11.9 million in state tax incentives last year to expand its workforce and invest in a new West Loop headquarters. The company has about 1,000 employees, including more than 600 in Chicago, said CEO Andy Eckert.

"We're very excited about our pending partnership with CountyCare," Eckert said.

Third-party administrators process medical claims and perform other administrative services. The contract with Valence does not include dental, pharmacy, optical and transportation-management services. Those services will be part of a separate contract, Glass said.

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