On its way out the door, the Bevin administration overturned a General Assembly committee’s unanimous vote to reject the administration’s contract awards that snubbed two existing Medicaid providers.

On Monday, the Government Contract Review Committee voted 6-0 to reject the Bevin administration’s awarding of the five big-dollar Medicaid contracts that, in total, handle about $8 billion in Medicaid benefits for about 1.3 million Kentuckians.

However, later the same day, William Landrum III, the secretary of the Finance and Administration Cabinet, informed the committee that he would override the rejection.

Sen. Stephen Meredith, a Republican from Leitchfield and chairman of the contract review committee, said in an interview that the committee submitted its letter reflecting the group’s vote to the finance committee early on Monday, Dec. 9, to William Landrum III, secretary of the Finance and Administration Cabinet, and is awaiting his response.

Regardless of Landrum’s response, the matter becomes the purview of the incoming administration of Gov.-elect Andy Beshear, who will be sworn in Tuesday, Dec. 10. Beshear has appointed Holly McCoy-Johnson as his secretary of the finance and administration cabinet.

For Meredith, the decision to vote against the contracts was twofold — to reject the number of contracts that the state awards for organizations to provide Medicaid and to protest how the Bevin administration dealt with oversight of the contracts.

As I’ve reported previously, Meredith said he would like to see the number of managed care organizations administering the state’s Medicaid program reduced. Having five MCOs, he contends, creates administrative burden on health care providers and increases administrative costs for the program.

“And I think that it puts the state in a stronger position to negotiate with the MCOs and that we can drive a better contract,” Meredith said.

He also said that the signed contracts were initially withheld from the committee. He said that the finance and administration cabinet cited an exemption from review in the state’s law that applies to master agreements.

“The bigger issue for me is that [the contracts] were not sent to us in the first place,” Meredith said. “There’s not much transparency because of that.

“If we are the stewards of the taxpayers’ dollars and we can’t see these contracts, there’s no due diligence on the matter.”

The Bevin administration on Nov. 26 ousted Louisville-based Passport Health Plan and the Kentucky entity of Indianapolis-based Anthem Inc., which administer Medicaid benefits to nearly 500,000 Kentuckians.

“His actions, coming just days before the end of his term, would directly hurt working families and children, and it adds unknowable chaos during their open-enrollment period,” state Rep. Charles Booker, a Democrat from Louisville and committee member, said in a statement. “I am deeply concerned about this impact on Kentuckians, but today’s committee vote sends a strong message that the legislature stands ready to help restore order and oversight with these agreements.”

With just 11 days remaining in office, the Bevin administration announced that it would award the contracts to the following groups:

  • Aetna Better Health of Kentucky, a subsidiary of Woonsocket, R.I-based CVS Health Corp. (NYSE: CVS)
  • Humana Health Plan, Inc., a subsidiary of Louisville-based Humana Inc. (NYSE: HUM)
  • Molina Healthcare of Kentucky, a subsidiary of Long Beach, Calif.-based Molina Healthcare Inc. (NYSE: MOH)
  • UnitedHealthcare Community Plan of Kentucky, a subsidiary of Minnetonka, Minn.-based United Health Group Inc. (NYSE: UNH)
  • WellCare Health Insurance of Kentucky, a subsidiary of Tampa, Fla.-based WellCare Health Plans Inc. (NYSE: WCG)

The Bevin administration’s decision to skip Passport puts the organization’s existence in jeopardy: $1.93 billion of Passport’s $1.95 billion in revenue comes from administering the Medicaid program to about 300,000 people. It also makes it all but certain that Passport’s $100 million headquarters and health campus on Louisville’s West End is dead in its current form.

Anthem provided Medicaid benefits to about 128,000 people.

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UPDATED: Bevin administration overturns rejection of Medicaid contract awards – New York Business Journal