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Losing bidders for Louisiana Medicaid contracts file protest

By MELINDA DESLATTEAugust 19, 2019
Orange-shirted employees of a Medicaid managed company which did not receive a contract renewal from the Edwards administration silently protest as Louisiana Governor John Bel Edwards leaves the Louisiana Secretary of State's office after he signed up to run in the upcoming election, in Baton Rouge, La., Tuesday, August 6, 2019. The candidate sign-up period for Louisiana's statewide elections ends Thursday, with the governor's race at the top of the ballot. (AP Photo/Michael DeMocker)
Orange-shirted employees of a Medicaid managed company which did not receive a contract renewal from the Edwards administration silently protest as Louisiana Governor John Bel Edwards leaves the Louisiana Secretary of State's office after he signed up to run in the upcoming election, in Baton Rouge, La., Tuesday, August 6, 2019. The candidate sign-up period for Louisiana's statewide elections ends Thursday, with the governor's race at the top of the ballot. (AP Photo/Michael DeMocker)

BATON ROUGE, La. (AP) — Two Louisiana Medicaid contractors are challenging a decision by Gov. John Bel Edwards’ administration to oust them from that lucrative work next year, accusing the health department of a biased bid review.

Louisiana Healthcare Connections and Aetna Better Health filed lengthy formal protests of the contracting decisions Monday with the state procurement office, objecting to the Edwards administration’s selection of four other companies for the multibillion-dollar contracts. They said state law wasn’t followed.

“No fair process could have brought about such an egregious result, and indeed this process was never fair. Rather, it was tainted with conflicts of interest and bias from the start,” lawyers for Louisiana Healthcare Connections, known as LHCC, wrote in their protest.

Attorneys for Aetna accused the state health department of a bid scoring process so skewed that “one cannot help but believe that the outcome ... was preordained.”

The Medicaid managed care deals, set to begin in January, will have four companies overseeing the care of about 90% of Louisiana’s Medicaid enrollees, an estimated 1.5 million people. The contracts are among the largest in state government, accounting for roughly one-quarter of the state’s annual operating budget.

Three current Medicaid contractors were chosen for new contracts in 2020. Humana Health Benefit Plan of Louisiana, which hasn’t done Medicaid managed care work in the state, will also start offering a health plan to Medicaid patients.

Though they currently do that work, Louisiana Healthcare Connections and Aetna were losing bidders for the next contracts. More than a half-million Medicaid recipients who receive health coverage through those networks will have to transfer to new health plans.

Louisiana’s state and federal lawmakers have raised concerns about the contracting announcement, questioning the risk of job losses and the ability of the health department to shift hundreds of thousands of people to new health plans by January.

The health department said it cannot comment on ongoing protests.

But Health Secretary Rebekah Gee assured lawmakers last week that patient care won’t be disrupted and she defended the bid review and scoring process as following Louisiana law. Gee said she wasn’t involved in the grading of bid proposals, but she said the new contracts are aimed at improving health care.

Louisiana’s chief procurement officer Paula Tregre will decide whether the contract awards should be overturned because of the protests. Her decision can be appealed, and the contract challenge ultimately could end up in state court.

In its protest letter, LHCC said key health department staff who evaluated the company’s bid proposal also were involved in a separate disagreement between the agency and LHCC. The company attached emails it describes as those employees showing “animosity and hostility” toward LHCC.

“To think that individuals involved in an active dispute with LHCC could at the same time give LHCC ‘fair and equitable treatment’ in the (bid) process — as the procurement code requires — is to expect the impossible,” the company wrote.

Aetna, meanwhile, suggested the health department skewed the review process to benefit Humana. Aetna said the agency refused to take into account Aetna’s experience in Medicaid managed care while allowing Humana to claim a Medicaid provider network it doesn’t have.

The department “abused its discretion and used a subjective, biased and arbitrary scoring methodology in violation of Louisiana procurement law,” Aetna wrote.

The managed care contracts are similar to the arrangements made in private insurance. The state pays a monthly fee for each person enrolled in a health plan with the companies — mostly adults covered by Medicaid expansion, pregnant women and children. The enrollees get services through a network of primary care doctors, specialists and hospitals. The current contracts, negotiated by former Gov. Bobby Jindal’s administration, expire this year.

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Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte

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