BATON ROUGE, La. (AP) - Louisiana's health department and four insurance companies chosen for $21 billion in Medicaid deals aimed at providing services to 1.5 million people are challenging a decision by the state's chief procurement officer to rescind the contract awards.
The Department of Health and the private companies filed their formal appeals late Friday, arguing that Louisiana's state procurement officer Paula Tregre didn't follow the law when she decided to throw out the three-year contract awards.
Lawyers for the health department say Tregre made "multiple factual and legal errors" in her decision, and they argue that she took too long to decide, in violation of the statute.
At issue are multibillion-dollar Medicaid contracts awarded by Gov. John Bel Edwards' administration to companies that will oversee care for about 90% of Louisiana's Medicaid enrollees - mostly adults covered by Medicaid expansion, pregnant women and children. The taxpayer-financed managed care contracts account for roughly one-quarter of Louisiana's annual operating budget.
Louisiana currently has Medicaid managed care contracts with five companies. Through a bid process that began in February, the health department chose four companies to do the work going forward - three that currently hold contracts with the health department and one new insurer. The two losing bidders that currently hold managed care contracts and were slated to lose them - Louisiana Healthcare Connections and Aetna Better Health - filed protests.
In response to those protests, Tregre found that the health department mishandled the bid process, failing to comply with state law or the agency's own evaluation and bid guidelines. She wrote that the health department's actions "resulted in a fatally flawed procurement process." Tregre scrapped the contract awards and said the health department will have to redo the bid process.
The health department and the four winning bidders - AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana, Humana Health Benefit Plan of Louisiana and United Healthcare Community Plan - are appealing Tregre's decision to her boss, Commissioner of Administration Jay Dardenne, the governor's chief budget adviser. In lengthy documents filed Friday, they argue that Tregre's decision violated the procurement code and that she misread parts of the bid evaluation and scoring information. They argue that the health department's contract awards should stand as legal.
It's unclear when Dardenne will issue his decision, and that is unlikely to settle the matter. Bidders that don't like the outcome of the appeal could take the dispute to court.
The disagreement over the contract awards hasn't disrupted health services to the nearly one-third of Louisiana's population covered by the state's Medicaid managed care program. The Edwards administration signed emergency contracts to keep the state's five current contractors in place through the end of this year.
Meanwhile, the Louisiana health secretary who was in charge during the bid process, Rebekah Gee, is resigning from the position at the end of the month. Edwards is searching for a new secretary who will inherit the contract dispute.