Two of Louisiana’s Medicaid managed care firms file protest of state’s contract picks

Aug. 19--The two losing bidders for Louisiana's new round of multi-billion dollar Medicaid contracts have filed protests of the state's decision, claiming the bid process was tainted and that officials were biased against them.

Louisiana Healthcare Connections and Aetna, two of Louisiana's five existing Medicaid managed care organizations, or MCOs, filed lengthy protests of the bidding process Monday. The new contracts, set to go into effect Jan. 1, are worth billions of dollars and involve managing care for 1.7 million patients in Louisiana as part of the state's privatized Medicaid program.

The protests come about two months before open enrollment begins for Louisiana's Medicaid enrollees. If the dispute is not resolved by the end of the year, LDH has indicated it could seek an emergency order to keep the current contracts in place. The existing contracts cost the state about $8 billion over the last fiscal year.

The protests claim the Louisiana Department of Health was inconsistent in its scoring methods, and include hundreds of pages of exhibits, such as emails between LDH staffers that the companies presented as evidence the scoring team was biased.

For instance, Louisiana Healthcare Connections argued that two members of the team that scored the bidders were involved in a dispute with the insurer over a separate hospital readmission policy, creating a conflict of interest. Aetna similarly claimed a member of the team is "extremely critical of Aetna" regarding reporting issues that cost the company several hundred thousand dollars in fines.

Both firms also argued Humana, the only winning bidder that is not currently an MCO in Louisiana, should be disqualified. They objected to Humana's list of providers in its proposal, saying many of them did not actually accept Medicaid and were included because Humana automatically listed providers in its commercial network unless they opted out. The companies also presented dozens of documents about the scoring process, arguing they should not have been docked points in certain areas or that its competitors should have.

LHCC even submitted an affidavit from its chief operating officer, Kendra Case, who accused LDH's subject matter expert of falling asleep during the company's oral presentation.

"Our preference, of course, would have been to avoid taking this step, but we were left little choice," LHCC CEO Jamie Schlottman said in a news release, citing what he called "major flaws" in the state's procurement process.

"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 wrote in its protest.

LDH did not respond to a message seeking comment Monday, but previously Edwards' administration has defended the picks. Rebekah Gee, secretary of LDH, said recently "nobody in Louisiana is guaranteed a permanent contract."

"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," Gee said. "And it might even be that things go better."

The Office of State Procurement will rule on the protests and the rulings can be appealed to Commissioner of Administration Jay Dardenne and then to the court system, a process that could take months.

The protests comes as state lawmakers and Congressman Cedric Richmond question the decision, especially the cancellation of the contract with Louisiana Healthcare Connections, which is currently the largest MCO in the state. The officials have questioned whether the new companies will be able to handle absorbing more than half a million enrollees into their networks during open enrollment, which ends in November. LHCC, a subsidiary of insurance giant Centene Corporation, has more than 440,000 enrollees, while Aetna has about 114,000.

Gee has expressed confidence in the firms, saying insurers are accustomed to enrolling large numbers of patients. She also said most Medicaid providers accept multiple plans, meaning patients will for the most part not have to scramble to find new doctors if their plan changes.

Former Gov. Bobby Jindal moved Louisiana to a managed care system in 2012, privatizing the state's Medicaid program. Before that, the state reimbursed doctors and hospitals directly in a fee for service model. Now, the state pays MCOs a monthly fee based on the number of enrollees.

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