Gateway Health Plan has notified the Pennsylvania Department of Public Welfare that, it will withdraw its Medicaid product from 17 counties in the department's Voluntary Managed Care Program, effective Sept. 30, 2010.
The withdrawal will affect approximately 14,500 consumers in Cambria, Carbon, Clarion, Columbia, Franklin, Jefferson, Lackawanna, Luzerne, Mercer, Monroe, Montour, Northumberland, Pike, Schuylkill, Somerset, Susquehanna and Wyoming counties.
"We regret having to remove ourselves from those counties," said Mike Blackwood, president and CEO of Gateway. "We've spent 17 years building our membership in those areas, but we're losing money at an alarming rate."
The 17 counties contained about 5 percent of Gateway's membership, yet accounted for about a quarter of the company's losses.
"You end up losing a great deal of money and you can only sustain that for so long. We had to at some point take this action," Blackwood said.
He said that the voluntary counties are hit pretty hard because there's no risk adjusted rate score, which means that there's no way to correct for a high risk population if you get one.
Despite the fact that a lot of plans are losing money in the state, there are, in many cases, there is at least one, if not two other managed care organizations present that can take over the clients. No one will be left uncovered. Clinical information will be transferred to the new health plan prior to the deadline in September.
The withdrawal is not expected to affect Gateway's Medicare Assured or HealthChoices products.
Gateway plans to continue its Medicaid business in the following 22 HealthChoices and Voluntary counties: Adams, Allegheny, Armstrong, Beaver, Berks, Blair, Butler, Cumberland, Dauphin, Erie, Fayette, Greene, Indiana, Lancaster, Lawrence, Lebanon, Lehigh, Northampton, Perry, Washington, Westmoreland and York.