Mark Ballard: The story of a complex contract dispute flying under the radar in Louisiana

Advocate, The (Baton Rouge, LA)

Aug. 25--A Louisiana state health department evaluator fell asleep during the sales pitch for one of the companies trying to land a state contract worth billions.

At least that's the way Kendra Case, the chief operating officer at Louisiana Healthcare Connections Inc., recalled the June 24 meeting in a sworn affidavit presented as proof that the state had gamed the competition to keep them from winning one of the lucrative "managed care" contracts.

Currently, five insurers administer Medicaid coverage for about 1.5 million of the 1.7 million enrollees -- one-third of the state's population -- on the government's safety net insurance policy. These contracts amount to roughly a quarter of the state's $30 billion-ish annual operating budget.

The current Medicaid managed care deals, negotiated by former Gov. Bobby Jindal, expire Dec. 31.

When the dust settled earlier this month, two of those five companies didn't win new contracts with the state: Aetna Better Health and Louisiana Healthcare Connections, known as LHCC.

Both have challenged the Edwards administration's decision.

There's been no word from the Louisiana Department of Health yet on whether its employee fell asleep during the LHCC presentation, but the accusation has a ring of plausibility.

We are talking about, after all, health insurance.

Even for the majority covered by the private market, eyes glaze over at the Byzantine rules concerning copays, deductibles, in-program service providers and treatments. The acronym-laden Medicaid program makes those baffling private standards seem like a first-grade primer by comparison.

A phalanx of lobbyists, highly paid by the two losers, whispered contrary questions into the ears of legislators during last week's hearing where the contract decision was reviewed. Democratic U.S. Rep. Cedric Richmond wrote of his concerns. And "We're being thrown out of work" billboards have gone up all over town. The disagreement could end up in court.

But this multi-billion-dollar controversy has been largely ignored on talk radio and blogs. Newspapers and business periodicals bury the complex dispute in their pages, and television news hasn't gone near it.

Part of the reason is that the majority's Medicaid narrative focuses on the supposedly lazy enrollees reaching into taxpayer pockets by gaming the system. That's a far easier tale to understand than two big insurance corporations raising legal arguments to challenge the loss of big contracts. LHCC collected $2.1 billion in 2017 alone.

Apart from half a million people having to find new policies by Dec. 31, if the decision stands, the imbroglio could also prove to be the Achilles heel in the reelection bid of Democratic Gov. John Bel Edwards.

Edwards campaign commercials plug away at the popularity of his executive order changing the Medicaid qualifications to expand the government-subsidized coverage to more than 400,000 working people who couldn't afford private insurance. The deep corporate pockets are chipping away at that theme by saying Edwards is throwing about 675 people out of work by not renewing the contracts.

A couple dozen LHCC employees showed up in orange vests when the governor went to the Secretary of State's office the day after the contract decision was announced to put his name on the October ballot.

So far, however, Edwards' two main GOP opponents -- Baton Rouge millionaire Eddie Rispone and Alto Congressman Ralph Abraham -- have mostly left the issue alone. They continue to further their contention that Louisiana's growing economy isn't rebounding fast enough.

At issue is the 2012 decision by then-Gov. Jindal to shift Medicaid from directly paying doctors and hospitals for each service provided to a system of paying private insurance companies a fee each month for each member enrolled -- mostly adults covered by Medicaid expansion, pregnant women and children -- that covers most of the costs for services.

Since then, lawmakers have complained loudly about the cost and raised issues like enrolling too many people who weren't qualified.

After listening to the pitches of several insurers, the Edwards administration chose to renew the contracts of three insurers under new terms, to refuse to re-up LHCC and Aetna, and to hire a new company, Humana Health Benefit Plan. That leaves four insurers, instead of five, to handle Medicaid for 92 percent of the enrollees at an expected cost of about $8 billion.

"It's good to have change because it allows us to keep them on their toes and make sure that we have the best health plans, the ones that are most competitive with the best ideas," Health Secretary Rebekah Gee told The Advocate.

All that may prove to be true. The question remains how well that argument will play on the campaign trail if the contract controversy receives more light.

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