MM Curator summary
Local, losing bidders (Paramount/Promedica) in the OH MCO awards have successfully enlisted legislators to undo the recent awards.
The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.
After a more-than-two-year effort to overhaul Ohio‘s Medicaid managed care system, state senators are asking for what could amount to a redo of the whole thing.
The state in April had finally chosen six companies to handle the governmental health insurance for more than 3 million low-income or disabled residents. But it’s run into hiccups, with at least two of the companies who lost out on contracts filing complaints against the Ohio Department of Medicaid.
Those complaints have turned into legislative action.
Senate Republicans on Tuesday inserted language into the state budget bill requiring the state to complete a new procurement process with a few new rules. The move comes just months after those $20 billion awardees were determined, potentially the largest contract in state government history.
“A couple of the Ohio companies, who for many years have been providing this service, and of course their employees and everyone else are here in Ohio, those folks were concerned what the process was and how it went forward,” said Senate President Matt Huffman, R-Lima.
Pete LuPiba, spokesperson for the Ohio Office of Budget and Management, defended the administration’s handling of procurement, saying it has had extensive public outreach and has been transparent.
“We will continue to work with the General Assembly on Medicaid as part of the budget process,” he said. “It would be unfortunate to lose the momentum that we have to transform Ohio’s Medicaid at this late stage in the process.”
Preference for Ohio-based companies
The budget language stipulates that contracts with Medicaid managed care organizations have to include those based in Ohio, and so do parent companies.
The proposed requirement echoes a complaint filed by Paramount Advantage, owned by Toledo-based ProMedica, the only current Medicaid managed-care contractor that lost out on a contract. A question as to whether it played a role in requesting the legislation was ignored.
“Out-of-state, for-profit, multi-billion-dollar Fortune 500 companies appear to have been favored over mission-driven, not-for-profit managed care organizations headquartered in Ohio,” the company said in a statement to the USA TODAY Network Ohio Bureau. “We are encouraged that it appears our state lawmakers understand the importance of the issue and the need to protect Ohio jobs from being lost.”
ProMedica called the bidding process “systemically flawed and unfair” and said it was grateful that lawmakers were trying to ensure a fairer method.
The one other major Ohio company, Dayton-based CareSource, said through a spokesperson it did not request that preference language. CareSource was able to get a contract.
If that component stays in the budget and becomes law, the consequences would be “disastrous,” said Loren Anthes, who chairs the Center for Community Solutions‘ Center for Medicaid Policy.
For one, he isn’t a fan of requiring the procurement process be geared toward Ohio-based companies, as it flies in the face of using free-market, competitive principles to get the most efficient health care outcomes.
“We… are creating a provision that would guarantee direct economic benefit to existing businesses with taxpayer money,” he said. “I’m not saying that if you’re domiciled in Ohio, that you are underperforming, but all I’m saying is that it means that you don’t have as much of an incentive to do better with my money.”
Furthermore, forcing a redo could put in jeopardy other parts of the budget that rely on the current procurement process, such as the entire Medicaid budget, as well as around $416 million in savings from current and previous procurements.
“If you take a segment out, you pull a piece out of the wrong part of the Jenga stack, it all is going to come tumbling down,” said Anthes.
Awardees might not be too happy as well to see the promised contracts yanked away, which could result in litigation.
Frustration with the DeWine administration
The motive behind putting this in the budget, however, seems to come more out of frustration with Gov. Mike DeWine’s administration. Lawmakers haven’t been able to get information on why certain parts of the bidding process played out the way it did, said Huffman.
For example, there was one Ohio company that received “0” points on their oral presentation during the bidding process.
“They gave a presentation, but I’m not sure how you can receive zero. I suppose that happens somewhere,” he said. “Things like that are mystifying when you ask the question, ‘How did someone get a zero? How badly did they do to get a zero?’ And the answer is, ‘We can’t tell you anything, we’re in litigation.’ That’s concerning.”
That’s likely in reference to ongoing lawsuits the state has against at least three of the applicants for Medicaid contracts. The main one against health care company Centene was cited as a reason for putting its bid on hold.
Huffman said he agreed with arguments that companies shouldn’t get the contracts simply because they’re from Ohio.
“But certainly there should be special preference, as we do in many other situations,” he said. “These are Ohio jobs.”
Nothing is final until after the Ohio House and Senate work out their differences in the budget bill. For now, the Senate is plunging forward on this issue.
“We have to do something. We can’t simply accept that we’re not going to get any information,” said Huffman. “Until this is resolved… until this information is forthcoming… this is what we’re going to do.”
Titus Wu is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.