MDwise is laying off 238 employees in January and will close its office in Indianapolis, according to regulatory documents filed Nov. 13.
The layoffs follow Indiana’s decision to remove the insurer as a managed care health plan in its Medicaid programs, effective Jan. 1. However, MDwise is now challenging the termination in court and has asked federal regulators to review the state’s process.
The Indiana Court of Appeals on Nov. 14 directed the state to respond within seven days to MDwise’s emergency motion seeking due process and additional time for the transition. MDwise also sent a letter to CMS requesting review of what it calls a “rushed termination.”
The state’s review alleged MDwise was the most expensive and lowest performing among Indiana’s four Medicaid plans.
A spokesperson for MDwise told Becker’s that it disputes the state’s characterization, saying its higher costs reflect lower denial rates of 5% to 7% compared to competitors, which it says demonstrates better access to care rather than inefficiency. The insurer said the state did not allege it failed to provide or pay for medically necessary care, and that it terminated the insurer’s contract “for convenience” rather than “for cause.”
MDwise has participated in Indiana Medicaid for more than 30 years and said it meets national accreditation standards and has passed every audit of its operations. The company is part of Grand Blanc, Mich.-based McLaren Health Care and received its current contract in 2023.
