FILE - Hospital, emergency room, medicaid

The service provider Paramount will be dropping its Medicaid coverage in central and southeast Ohio after facing financial losses. It will continue to provide Medicaid coverage in the west and the northeast.

The organization, which is a subsidiary of the nonprofit health care system ProMedica, will cease those services in those regions at an unspecified time later this year. It will work with the Ohio Department of Medicaid to ensure that all customers are transitioned to another Medicaid provider.

“We are committed to providing health care to as many of Ohio’s most at-need residents as we can,” Lori Johnston, the president of Paramount Insurance, said in a news release.

“Our decision to scale back our Medicaid service area was difficult, but necessary to help ensure that we are able to cover the plan’s costs in view of the state’s announced reimbursement rates for 2020,” Johnston said. “Limiting our service area to two of three regions of the Ohio Medicaid Managed Care Program enables Paramount to responsibly continue providing the highest quality Medicaid plan to our members.”

Paramount is reporting an operating loss of more than $100 million, mostly caused by the cost of Medicaid services.

Rea Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute, told The Center Square in an email that the state should make some reforms to the Medicaid system to improve its financial stability.

“Ohio should protect the Medicaid program by ensuring that only benefits go to eligible enrollees,” Hederman said. “Several recent studies have found that improper benefits is a problem for Medicaid, resulting in improper spending and higher costs.”

The service reduction will affect about 31,000 members. All of these members should receive letters in the mail by the end of the week that will notify them of the changes.

Staff Reporter

Tyler Arnold reports on Virginia and West Virginia for The Center Square. He previously worked for the Cause of Action Institute and has been published in Business Insider, USA TODAY College, National Review Online and the Washington Free Beacon.