Paramount takes legal action to halt, end Medicaid procurement process

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After trying to undo their loss via the legislature, Paramount is now trying their luck in court.



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It tried to appeal, but the agency wouldn’t stop the Medicaid overhaul. It went to the state legislature, but Gov. Mike DeWine vetoed the effort.

So now, Toledo-based health care company ProMedica is going to the courts.

ProMedica, which owns Medicaid managed-care organization Paramount Advantage, announced Tuesday that it is has sued the Ohio Department of Medicaid. It’s seeking injunctive relief to halt the ongoing overhaul of the state’s Medicaid system and invalidate recently awarded contracts.

Paramount brings this lawsuit to ensure the integrity of Ohio’s… selection process is fair, free, and open, as required by law, and to invalidate the fundamentally flawed black-box process that Defendants improperly conducted, without any authority to do so and without implementing the necessary safeguards against… biases toward Paramount,” the complaint filing read.

After a years-long procurement process, and as part of the overhaul, the Medicaid department in April chose six new companies to handle the governmental health insurance for more than 3 million low-income or disabled residents. Those contracts are worth around $20 billion, potentially the largest award in state history.  

Paramount Advantage was the only current provider to lose out.

The company alleged bias in favor of large, out-of-state companies over Ohio-based ones and sought in the state budget to redo the process so it “protected Ohio jobs.” But that was vetoed by the governor. 

The company filed an appeal to the Medicaid department itself, but that was rejected late June. The department said that ProMedica’s application for a contract made very few references to new elements of the Medicaid overhaul, such as OhioRISE, a program treating children with severe behavioral and mental problems. 

In the court filing, attorneys for the company listed multiple problems as to why it believes the procurement process was faulty and unfair.

Attorneys cited a lack of transparency due to the Medicaid department’s refusal to satisfy open records requests related to the process. ProMedica questioned whether the department even had authority to preside over the selection process, saying the Medicaid department didn’t file necessary paperwork to the proper agency. Attorneys claim other legally required procedures were not followed.

A spokesperson for the Department of Medicaid said it has not yet received the complaint.

Many expected the lawsuit to come, and if it’s successful, health advocates have the same fears as they did when lawmakers were looking at redoing the procurement process. Critical reforms like OhioRISE or the implementation of a single pharmacy benefit system would be delayed.

Regardless, ProMedica is not backing down, saying jobs are at stake.

“ODM’s unlawful…. decision to deny Paramount a contract award will result in the loss of hundreds, if not thousands, of jobs in northwest Ohio at a time when the local, state, national and even global economies are still reeling from the effects of the year-and-a-half long pandemic,” it said in its filing.

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.


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