Louisiana’s health department has reached emergency agreements to provide Medicaid management while protests over the bidding process keep long-term contract offers in limbo.
As first reported by The Associated Press, the contracts would extend the state’s relationships with its five current Medicaid Managed Care Organizations, or MCOs, for one year.
State purchasing officials and federal regulators still must approve the emergency contracts. The contracts can be terminated early, subject to a “reasonable turnover plan,” after the protests have been resolved and state officials move forward on new long-term agreements.
The current contracts are set to expire at the end of the year. The Department of Health selected four MCOs to begin work starting next year, but legal protests by two current contractors that were not selected have held up the process. The contractors claim the process was biased against them.
Louisiana contracts with MCOs to oversee utilization, cost and quality of care for Medicaid recipients. The companies work much like private insurers, and the state pays them a fee for each recipient that signs up with their plan.
Medicaid made $7.6 billion in payments on behalf of 1.7 million enrollees to the five current managed care organizations during the 2018 fiscal year, the department says. Protests by losing bidders for the lucrative contracts are not uncommon.
The emergency contracts are similar to the existing ones. The most noticeable differences are higher fines for failing to hit certain performance metrics.
For example, the penalty for failing to maintain a free hotline that members can call 24 hours a day, seven days a week has been increased from $5,000 to $20,000 per day.
It is unclear when the protests will be resolved.
Louisiana Healthcare Connections, one of the losing bidders, says the contract award process was “tainted with conflicts of interest and bias from the start.”
LHCC says Louisiana Department of Health employees who were involved in a separate dispute with the company also helped evaluate its response to the department’s request for proposals. One of those employees even fell asleep during LHCC’s oral presentation to the LDH evaluation team, the company claims.
In its protest, Aetna Better Health argues LDH didn’t follow the scoring method laid out in its request for proposals to grade the RFP responses.
“Rather, the bias in scoring is so obvious that one cannot help but believe that the outcome of the scoring of the RFP was preordained, and the scoring process was utilized to accomplish the desired outcome,” Aetna’s attorneys argued.