Vanguard Misses Out on Arizona Medicaid Windfall

Nashville-based Vanguard Health is dealing with the loss of one of its biggest customers: the state of Arizona. The company lost its contract to serve most of that state’s Medicaid patients.

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Hospitals are Vanguard’s main business. But for 30 years it’s also run the health plan for Arizona’s 186,000 Medicaid recipients. Two months ago, the state decided not to renew the contract…except for an agreement to cover patients in the Phoenix area. It’s a development that flew in the face of the company’s expectations. Vanguard executives were hoping to see a windfall from Governor Jan Brewer’s decision to accept the Medicaid expansion offered under the Affordable Care Act. Instead, the company will only serve patients in a single county, with enrollment will be capped at 98,000.

The loss of the Arizona business has eaten into Vanguard’s financial prospects. On a conference call with investors today, the company announced it’s cutting earnings estimates for the year by $12 million.