Lawsuit: Medicaid signed billion dollar contract despite protests

Lawsuit: Medicaid signed billion dollar contract despite protests

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The complexities of Medicaid often contribute to the confusion of the program. Here, we break down some of the numbers for Mississippi Medicaid. Dustin Barnes/The Clarion-Ledger

Medicaid logo(Photo: Special to the Clarion-Ledger)

Mississippi's Medicaid delivery program is now the subject of a legal battle between several parties.

The day after two companies protested the billion-dollar managed care award on June 29, Medicaid signed contracts with three other companies with the highest scores in evaluation.

The award drew skepticism from some lawmakers who question whether officials discriminated against Mississippi True, a hospital-backed, nonprofit Provider Sponsored Health Plan that responded to the state's request for proposals.

Others question the rush to execute such a large contract without oversight by the body tasked with reviewing most contracts, the Professional Services Contract Review Board.

A Medicaid spokesperson said the contracts still require approval from the Centers for Medicare and Medicaid Services, which requires Medicaid to sign the contracts before it receives them. The contracts are not valid until approved by CMS.

More:Hospitals: Mississippi favored for-profit, out-of-state company to manage Medicaid

Mississippi True filed a complaint in Hinds County Chancery Court on July 13.

On Aug. 2,  Amerigroup, another group that vied for the contract, joined Mississippi True in filing a complaint against Medicaid that asks for damages and for the court to prohibit the state from executing the contract.

"DOM's (Department of Medicaid's) actions, first in failing to adhere to the terms of the RFP, and then in moving forward to implement its awards despite the pending protests, violate numerous mandatory statutory and regulatory requirements, and constitute a fundamental departure from the fair and unbiased administration of the procurement process for the MississippiCAN program, which again, is one of, if not the largest, public procurements in the State's history," the complaint states.

The managed care companies will oversee the reimbursement of roughly $2 billion in public funds annually, according to Medicaid.

This "underscores the critical necessity that the selection and protest process be executed properly," said an Amerigroup statement. "Amerigroup’s actions are to ensure this occurs, so the most qualified and capable providers are selected."

It appears Medicaid "laid the groundwork for them (Mississippi True) to be excluded," said Sen. Angela Hill, R-Picayune.

"They structure the RFP to give the contract to whoever they want," Hill said.

Medicaid scored the proposals based on several categories, including the experience of the proposing group and the proposer's approach and process offered to provide the services under the contract.

Mississippi True, a newly formed nonprofit backed by 65 hospitals, argues it will never have the experience necessary to win an award if it can't get the contract because of a lack of experience.

The lawsuit represents just one side of the legal argument. Medicaid would not comment on pending litigation, instead stressing that the division follows a "stringent procurement process in accordance with federal and state law and regulations."

The state's managed care program, MississippiCAN, is tasked with decreasing Medicaid spending, in theory by keeping people healthier and therefore less likely to need expensive health care services

UnitedHealthcare and Magnolia Health have managed MississippiCAN since it began in 2011. In this latest round of scoring, Magnolia came in first, Molina Healthcare of Mississippi in second and United in third. 

Each of these companies have filed motions to intervene on the current lawsuit.

The losing proposers questioned why Medicaid signed the contracts before review by the Public Service Contract Review Board

By law, insurance contracts do not fall under the purview of the review board, an attorney for Medicaid explained in an email to Mississippi True's attorney in early July.

Amid concerns raised by lawmakers, chairmen for the Accountability, Efficiency, Transparency Committee in both the House and Senate, Rep. Jerry Turner, R-Baldwyn, and Sen. John Polk, R-Hattiesburg, sent a letter to Gov. Phil Bryant encouraging further assessment of the award.

"I think that was (signed) in haste," Turner told The Clarion-Ledger Tuesday. "I think it should have gone before the review board before it was ever signed."

On July 13, two weeks after Medicaid executed the contract, Bryant sent a letter to Medicaid Director David Dzielak asking him to submit the contract to the review board.

"Even if the PSCRB determines that its regulations do not cover managed care contracts, having an independent state review board assess whether these contracts meet constitutional and statutory requirements will provide additional confidence in the integrity of the process," Bryant wrote.

When asked to elaborate on the situation, Bryant's spokesman Clay Chandler responded by email: "Gov. Bryant believes every contract the state lets should be fair, equitable and transparent."

Turner said he's going to look at strengthening the law regarding contracts required to go before the review board.

The board is set to review the contract in September.

"Although a review by the PSCRB is pending ... Court intervention is necessary to remedy these failures by ordering a new bid process or the review by an independent body that is not tainted by the acts or omissions of DOM," states a motion for preliminary injunction Amerigroup filed Aug. 2.

Contact Anna Wolfe at 601-961-7326 or [email protected]. Follow her on Twitter.

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