Southeast | Summer | 2010 | Health Plan Analysis

Uncertainty about the economy and the effects of health reform put a damper on the South's health insurance market. Commercial enrollment is essentially flat in Alabama, Georgia, Louisiana and Tennessee, and profits are down. The biggest commercial contract in Louisiana, the state employee contract, is still in the air. It was awarded to Blue Cross Blue Shield of Louisiana, but Humana and UnitedHealth Group brought the matter to court due to a discrepancy in the RFP. As of July 22, no decision had been made. In Tennessee, the effect of last year's increase in the HMO tax forced one company, Bluegrass Family Health, to back out of the commercial market. Alabama's Medicaid Agency is making a landmark change to its pharmacy reimbursement method, moving from average wholesale price to average acquisition cost, to determine prices. In conjunction, it is raising the dispensing fee it pays pharmacists to almost double what it was before, the highest dispensing fee in the country. Louisiana's Department of Health & Hospitals continues to move forward to change its Medicaid delivery system to a managed care model with coordinated care organizations. In all four states, hospital associations report that their members are looking into becoming accountable care organizations, and medical centers in Alabama, Georgia and Tennessee are all participating in a pre-ACO arrangement with Premier healthcare alliance.