MCOs (NM)- State was prepared to notify providers on Medicaid contracts before canceled procurement

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[MM Curator Summary]: They even had the winner’s awards letters ready to go. Oh yeah, also the “sorry you lost” letter was ready to go, too.


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SANTA FE – In mid-January, state Human Services Department officials had letters ready to go notifying four of the five bidders for massive contracts to run New Mexico’s Medicaid program that they had been selected.

But those letters were never sent and, just over a week later, the agency announced it was taking the unusual step of canceling the procurement process and starting over, according to records obtained by the Journal.

The abrupt decision, which was made after Gov. Michelle Lujan Grisham expressed concern about a possible disruption of services if a current Medicaid managed care organization was not issued a new contract, has rattled the Roundhouse and prompted some lawmakers to demand more information.

Legislators earlier this month asked for the full scores of the initial Medicaid contract bidders, after a Journal report on the evaluations, while also questioning top Human Services Department officials about the decision to cancel the process.

“Knowing what those scoring sheets look like, I think that would be useful to us while we’re still here at the Legislature,” said Sen. William Sharer, R-Farmington, during a Senate Finance Committee meeting earlier this month.

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In response, Human Services acting Secretary Kari Armijo said the agency was in the process of hiring an outside Medicaid expert and should have recommendations about the new contract structure within the next 45 days.

In the time since Armijo addressed legislators, the state has contracted with an outside expert who will make recommendations regarding the procurement process and timeline, HSD spokeswoman Marina Piña said this week.

In her discussion with lawmakers, Armijo also said she could not discuss specific evaluations, but vowed to provide senators with the score sheets in question.

“There were concerns expressed about low scores in certain critical areas almost across the board on all bidders in certain key areas that are very important to the Medicaid program,” Armijo said.

She also said health insurers need to bring their “A game” in their follow-up bids.

However, she did not tell lawmakers just how close the department was to readying the announcement of the new contract recipients under the state’s Medicaid program, which were set to take effect next year as part of a rebranded program known as Turquoise Care.

The new documents obtained by the Journal show the state readied intent letters announcing the awarding of contracts for the health care insurers vying for Turquoise Care contracts less than two weeks before canceling the procurement.

The documents, which include email communications involving Armijo, former HSD Secretary David Scrase and former Medicaid Director Nicole Comeaux, also show the direct involvement of the Governor’s Office in the abrupt decision to not forge ahead with the prepared letters.

Specifically, Armijo sent a Jan. 29 email to Teresa Casados, the chief operating officer in the Governor’s Office, that references a letter that would notify managed care organizations of the state’s intent to cancel the contract process and was drafted at the “direction” of Casados two days earlier.

The email also suggested Charles Canada, HSD’s procurement manager, had not yet been notified of the decision.

Procurement scrapped

The state decided to cancel the procurement process the same day Scrase publicly announced his retirement, but did not announce the decision until three days later — on Jan. 30.

The decision, according to Piña, in part came from the low scores the five bidders received.

Blue Cross and Blue Shield of New Mexico, one of four providers on the state’s current Medicaid contract, scored the highest with 1,083.5 points out of a maximum of 1,815 points.

Western Sky Community Care, a subsidiary of St. Louis-based Centene Corp. and also a current managed care organization, was the lone provider not recommended for a new contract under the previous procurement, scoring a total of 1,022 points.

After the scores were shared, the governor and top staffers in her office “shared concerns” with top HSD officials about a possible disruption of services, a Lujan Grisham spokeswoman told the Journal last month.

But the Human Services Department previously said the reason for halting the procurement process was due to the high-level departures of Scrase and Comeaux, and in order to give their successors the ability to help guide the contract process.

Comeaux has declined to comment on the issue, while Scrase said last month he did not have much insight into the decision.

Scores were low

New Mexico currently pays about $935 million in state funds to run its Medicaid program, and roughly $8 billion total when federal matching funds are included.

While the Human Services Department has withheld the submitted bids, describing them as “confidential,” the agency has disclosed the final scores of the five health insurers seeking to land Medicaid contracts.

Those scores show the four highest-ranked bidders were Presbyterian Health Plan, UnitedHealthcare of New Mexico, Blue Cross and Blue Shield of New Mexico and Molina Healthcare of New Mexico.

Drafted intent letters were written for all four of those insurers, according to records obtained by the Journal.

The records also show a letter had been drafted notifying Western Sky Community Care that it had not been selected for a contract for the new Medicaid program.

While Human Services Department officials have insisted the agency still intends to pick new providers before the end of this year, some lawmakers have floated the possibility of more legislative involvement in future instances when a procurement is canceled.

“I think the Legislature may have the authority to look at the RFPs and say, ‘Here are the top five providers,'” said Sen. George Muñoz, D-Gallup, the Senate Finance Committee’s chairman.