MCO- Nebraska officials delay selection of contractors managing $1.8 billion program

[MM Curator Summary]: The state needs a little more time on the clock to figure out who will be happy and who will be ticked.



Nebraska officials announced Tuesday that they are taking more time to review the five companies that bid to manage part of the state’s $1.8 billion Medicaid program.

State Medicaid Director Kevin Bagley said the winning bids will be announced Sept. 23, instead of Wednesday as previously planned. He said the delay will allow time to interview each of the companies and score the interviews.

“Our goal has been to do this right, even if it takes some time,” he said. “We know stakeholders are eager to learn who will be chosen for the next managed care contracts, and we appreciate their patience as we meet with the bidders to ensure the right plans are trusted with the care for our Medicaid beneficiaries.”

The winning bidders will manage physical and behavioral health care, pharmacy services and dental benefits for almost all Medicaid patients in a program called Heritage Health. Together, they will oversee the care of some 347,000 Nebraskans. 

The new contracts are slated to start July 1, 2023, and last through at least 2028.

The bidders include all three companies with current Heritage Health contracts. They are: Community Care Plan of Nebraska, doing business as Healthy Blue; Nebraska Total Care; and UnitedHealth Care of the Midlands, which operates as United HealthCare Community Plan of Nebraska. 

The two additional bidders include Medica Community Health Plan, which currently offers health coverage to Nebraskans through the Affordable Care Act Marketplace, and Molina Healthcare of Nebraska, which provides Medicaid, Medicare and ACA Marketplace plans in several other states. 

Bagley said that each of the bidders provided quality bids to the state. The interviews are an optional part of the procurement process. He said they will allow Medicaid program officials to ask additional questions of each of the bidders, which will assist in determining which companies are best suited for the job.

State lawmakers have criticized the state procurement process after at least three cases in which the process led to the selection of a low-cost bidder that ended up failing to do the job. The most recent example was the problematic 2019 contract with the Kansas-based Saint Francis Ministries.

Saint Francis got the job of managing metro-area child welfare cases by underbidding the contract, then negotiated a 55% boost in payments when financial shortfalls nearly forced its Omaha operations to shut down. Meanwhile, the private nonprofit never met contract terms or complied with state laws limiting caseload sizes.

The contract has since been terminated and oversight of child welfare cases transferred back to state workers. 

A law passed this year requires the state Department of Administrative Services, which handles procurement for the state, to hire a consultant to evaluate the procurement process. The consultant’s report is due by Nov. 15, giving lawmakers time to craft legislation for the 2023 session.

The current Heritage Health contracts date to 2017, when the state signed with three private companies to administer what was then $1.2 billion worth of Medicaid services. Since then, two of the original three companies merged, which led to the state signing a contract with Healthy Blue.

Heritage Health does not cover nursing home care and other long-term support and services for the elderly and people with disabilities.


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