WellPoint Inc.’s National Government Services unit will add more than 100 jobs in Indianapolis beginning late this year or early in 2013 after the health insurance giant won a new contract with the federal Medicare program.
The contract, awarded last week, makes WellPoint’s NGS unit the administrator for hospital and physician bills racked up by 2.7 million seniors on Medicare in Illinois, Minnesota and Wisconsin. It also puts NGS in charge of home health and hospice bills for Medicaire recipients in 13 states and five U.S. territories.
If NGS keeps the contract for its maximum five-year term, the deal will bring in an estimated $318 million in revenue and account for roughly 20 percent of all NGS revenue.
“It’s a very key win. More so than just the financial change, it’s very significant for us to move from our legacy work into the competitive world,” said Mike Kapp, president of the federal government solutions division of Indianapolis-based WellPoint.
The federal Medicare program began competitive bidding for its administrative contracts in 2006 and WellPoint, even though it already had a 40-year history of serving the Medicare program, lost some of its “legacy” contracts in that process.
In May, WellPoint was forced to lay off 112 local workers after it lost a separate Medicare contract for Indiana and Michigan. Kapp said a “large majority” of those employees will be asked back to work on the new contract.
The new contract will add 200 to 300 workers to NGS, with half or more of those jobs being added in Indianapolis. The balance of the new positions will be added at an NGS office in Milwaukee.
NGS now employs 2,000 people, including about 500 in Indianapolis.
Winning the contract also helps NGS hold on to some workers that it might have had to let go, Kapp said. All told, more than 450 NGS employees will work on the new contract.
Those employees will do claims processing, information technology support and audit and reimbursement reviews of Medicare bills. NGS also will hire nurses to conduct medical reviews of claims.
Kapp said hiring for the new positions could begin late this year or in the first quarter of 2013. Once hiring begins, NGS will staff up within six months or less.
Kapp said the new contract is larger than the one NGS lost for Indiana and Michigan and gives NGS a wide swath of responsibility for the growing home health and hospice segment of services.
“It also has a larger portion of the home health and hospice, which is growing with Medicare,” Kapp said. “Our expertise is good there."
National Government Services currently serves nearly 23 million Americans with Medicare in 18 states and 5 U.S. territories. In addition to handling contracts for hospitals, physicians, home health and hospice, NGS also handles Medicare contracts for durable medical equipment.