Louisiana’s latest search for contractors to manage the health care services of nearly 1.6 million Medicaid patients is taking longer than expected, blowing past an early November timeline for announcing the contract awards.
The last bid process started by Gov. John Bel Edwards’ administration for the multibillion-dollar Medicaid managed care contracts was derailed two years ago in a legal dispute. The Louisiana Department of Health has been using emergency contracts to keep the current managed care companies in place while it evaluates new bids.
The health department released its request for proposals from contractors interested in handling the taxpayer-financed Medicaid work in June. The deadline for submissions was Sept. 10. At the time the bid solicitation was issued, the agency released a timeline that said it planned to announce the contract awards “on or about” Nov. 5.
That announcement hasn’t happened.
Health department spokesperson Kevin Litten said the agency hopes to have its recommendations to the Office of State Procurement, which oversees the bid solicitation process, by the end of this week.
“The expected dates first announced for awarding the Request for Proposals for Managed Care Organizations was an approximate timeframe, and LDH has continued working through this process over the past month,” Litten said in a statement. “The department is finalizing our internal evaluations.”
The managed care contracts account for roughly one-quarter of Louisiana’s annual operating budget and cover the health care for one-third of Louisiana’s residents. They allow private companies to oversee health services for about 90% of Louisiana’s Medicaid enrollees — mostly adults covered by the Medicaid expansion program, pregnant women and children.
The new contracts will be awarded for up to five years and are expected to start around the beginning of the new budget year in July, according to the bid solicitation.
Until new contractors are chosen, the health department has continued its existing emergency deals with the five companies currently managing Medicaid services: Aetna Better Health, AmeriHealth Caritas of Louisiana, Healthy Blue, Louisiana Healthcare Connections and United Healthcare of Louisiana.
Health Department Secretary Courtney Phillips announced in August that she would redo the Medicaid managed care contractor search, rather than continue a legal fight over the deals that her predecessor approved.
The prior bid process began in early 2019, under then-Secretary Rebekah Gee. Four companies were chosen for the Medicaid managed care work – three of the insurance companies that already hold contracts with health department and one new contractor. The contracts would have been worth an estimated $21 billion over three years.
But two losing bidders currently doing the managed care work that were slated to lose their lucrative contracts, Louisiana Healthcare Connections and Aetna Better Health, filed protests raising objections about the bid solicitation process and contract awards.
After reviewing the protests, Louisiana’s state procurement officer scrapped the contract awards, determining that the health department mishandled the bid process and failed to comply with state law or the agency’s own evaluation guidelines.
The health department and the four insurance companies chosen for the Medicaid deals initially challenged that decision. But Phillips decided it was best to start the process over when she became health secretary near the start of the coronavirus pandemic and as Louisiana’s Medicaid rolls ballooned larger.