The Ohio Department of Medicaid essentially asked the market how it should go about implementing an AI-powered cost savings pilot project created in the state budget. Only one company answered – a startup that seems uniquely poised to meet requirements of the legislation.
Circulo Health was the only respondent to a "request for information" the state agency put out last month, Columbus Business First found via records request.
The document made clear that this step will not result in a contract. Typically, governmental bodies issue an RFI as a preliminary step before seeking formal bids. Ohio Medicaid officials were not available for comment.
Sean Lane, founder of both Circulo Inc. and Olive AI Inc., and Mike Renn, Circulo head of operations, were not available for comment. Circulo is among of handful of spinoff companies using Olive's AI and automation technology for specific healthcare administrative challenges.
The two-year state budget approved last July created the pilot project for "automation and artificial intelligence to provide Medicaid program savings," with a goal to improve patient health, communication and the overall experience for patients and doctors. The chosen vendor will get paid 95% of the state's monthly per-member reimbursement.
The managed care provider must be a startup licensed insurer "domiciled in Ohio," according to legislative language added by three Republican state representatives. Columbus-based Circulo received its state license in November.
The program will apply to adult enrollees in the Affordable Care Act Medicaid expansion. There were 884,500 total in that group as of March, according to enrollment data. Circulo's pro-forma business plan, submitted to the Ohio Department of Insurance as part of licensure and obtained by records request, estimates about 1,000 members for the first year.
Ohio Medicaid has said it did not request the project be added to the state budget. Regulators have to come up with the rules for implementing programs created in state law. The cost containment pilot was supposed to start this fiscal year, which ends June 30.
The agency's information request instructed companies to provide detailed explanations, without divulging trade secrets, of how they would meet the program requirements, including:
- Provide care and operate under all the rules for a managed care organization at 95% of the fee.
- Create strategies to help participants increase their income so they no longer need Medicaid.
- Help the agency submit the request to the federal government to operate such a program under a waiver to Medicaid regulations.
- Use automation and AI to save costs while improving health outcomes and the overall experience for both enrollees and healthcare providers.
- Report data every 90 days to determine whether the pilot should keep going.
Circulo spun out from Olive in February 2021 with $50 million in venture capital. It has been rapidly growing since acquiring a five-county provider of home and community-based services for Ohioans with developmental disabilities. Services including residential and respite care, plus a van to deliver home-based care and telehealth are offered in 34 counties as of May.
In October Circulo acquired Huddle, a startup outside Albany, New York, seeking to reform primary care to promote wellness, reported sister website Albany Inno.
"Providing great access to care – there isn’t a limitation to that," Renn said in December.
Lane, who grew up in Southeast Ohio, has said he founded the company specifically to target Medicaid as the population most in need of improved health outcomes. He told Columbus Business First last July he spoke to many lawmakers about the need to reform Medicaid, but the company was not involved in drafting the legislation.
"I have made my opinions about Medicaid very clear and very public," Lane said then. "It's a mantra of mine: If Medicaid had automation, the products could be administered for much better value than they are today."
The House Democratic caucus unsuccessfully asked Gov. Mike DeWine in a letter for a line-item veto on the pilot program, saying it was "narrowly designed and skirts around Ohio’s fair procurement and contracting process."
