A Wallingford-based nonprofit beat out three well-known insurance companies to win a five-year contract to administer health care coverage for nearly 600,000 low-income children, families, seniors, and adults with disabilities.

Lt. Gov. Nancy Wyman announced Thursday that Community Health Network of Connecticut, Inc. , won the right to negotiate a contract expected to be worth between $70 and $73 million in the first year alone.

Awarding the contract was the first step in moving the state away from a Managed Care Organization model to a model where the state will assume the risk. The move is expected to save the state “tens of millions” of dollars.

Wyman said the selection marks a “turning point” in the coordination and delivery of publicly-funded health care services in Connecticut.

“The move to one administrative entity will streamline and flatten overhead in these critical programs, which represent the largest service expenditure in the state budget at approximately $4.6 billion,“ Wyman said. “At the same time, extending care management services to the older Medicaid population will improve patient health outcomes and lead to significant savings in the program.”

Community Health Network of Connecticut, Inc. beat out Anthem Blue Cross and Blue Shield, Iowa Foundation for Medical Care in partnership with Qualidigm, and AmeriChoice of Connecticut, Inc. which is owned by UnitedHealthCare, to win the right to negotiate the contract.

Community Health Network of Connecticut, Inc. (CHN) will take over the entire Medicaid population starting on Jan. 1.

Social Services Commissioner Roderick Bremby explained that the move to an administrative services organization structure is designed to help people navigate the medical coverage system, coordinate doctor referrals and appointments, and ensure that the right care is accessible at the right time.

“It is critical to note that, for the first time, older adults and persons with disabilities with complex health care needs will get help from the Medicaid system in terms of care coordination,” Bremby said. “Currently, many patients who are older or who have disabilities are not doing as well as they could because they have no outside support.  Often, they need help with scheduling appointments and negotiating the health care landscape. The new system will offer support to our enrollees by working with their doctors and other health care providers to attain the best outcomes possible.”

He also noted that this model improves health care outcomes and reduces costs by having a primary care doctor coordinate care with specialists, hospitals, and pharmacists to reduce duplication, avoid errors and ensure patients follow through with their treatment plans. 

Contracting with one administrative services organization will also improve the state’s ability to bring resources to the treatment of common, chronic illnesses like asthma and diabetes, and it will help improve prenatal care and healthy births.

“The administrative services organization will use state-of-the-art data analytics to help us efficiently target our resources, measure outcomes, and identify and reward doctors who are providing the finest care,” Bremby said.

Health care advocates such as Sheldon Toubman, of New Haven Legal Aid, praised the decision.

“As a mission-driven non-profit with a lot of experience in the Medicaid program, we think that CHN-CT is well-positioned to act as a partner with the Department of Social Services in re-building the Medicaid program in a way that makes sense for both the enrollees and the taxpayers,” Toubman said. “We are also appreciative that the Department has reaffirmed the need for development of person-centered medical homes under this new system.”

Currently it takes three Managed Care Organizations to handle the nearly 600,000 Medicaid recipients. Community Health Network is one of those, but its clients are mainly HUSKY clients, so it has contracts with community health centers and a long list of primary care physicians and pediatricians. Some advocates quietly expressed concern about how many specialists and doctors who deal with the elderly and disabled are in the network or will sign up for the network.

The last time the contract was awarded back in 2008 three companies won the five-year, $3.5 billion contract. At the time there were only about 330,000 children and families enrolled in the HUSKY program and the Charter Oak Health Plan was in its infancy.