Louisiana Will Issue New Medicaid Managed Care RFP, Ends Protest

Louisiana Department of Health will issue a new request for proposals (RFP) for Medicaid managed care organization contracts, ending a bitter legal battle over the 2019 RFP process, the department announced.

“Now that the current RFP is almost two years old, the Department has decided that it is in the best interest of the people we serve to issue a new and revised RFP,” explained Courtney N. Phillips, secretary of the Louisiana Department of Health.

Phillips, who took on the role of secretary of the Louisiana Department of Health in April 2020 after serving as executive commissioner at Texas’s Health and Human Services department, alluded that developments in the healthcare industry itself motivated the recall.

“Much has changed in the healthcare industry since the original RFP was drafted, and we must look ahead to innovative solutions in health care delivery while increasing accountability and addressing health disparities,” she said.

The Louisiana Department of Health’s announcement signals closure for a prolonged legal battle over the 2019 RFP.

Almost exactly a year before Phillips’s recent announcement, two health plans who were rejected as a result of the Medicaid contract process—Louisiana Healthcare Connections and Aetna Better Health—filed a protest against Louisiana’s Department of Health.

The plans alleged that there were conflicts of interest at play in the final determination around 2019 Medicaid contracts. Two of the members of the committee making the Medicaid contract determinations were involved in a separate health policy dispute with Louisiana Healthcare Connections, the plans pointed out.

The payers also argued that the state had overlooked flaws in competitor plans and inconsistently scored their plans’ performance to disadvantage Louisiana Healthcare Connections and Aetna Better Health.

Louisiana Healthcare Connections, one of the state’s largest Medicaid plans, was the only contracted plan to make a public statement on the decision. The plan noted that the department’s move will end the 2019 legal process and will ensure that the plan’s beneficiaries maintain coverage.

“Our mission remains unchanged: to transform the health of Louisiana’s residents, one person at a time,” Jamie Schlottman, president and chief executive officer of Louisiana Healthcare Connections, said in a brief press release.

“We remain committed to working in partnership with the Department of Health, health care providers and community organizations to protect the health of one of Louisiana’s most vulnerable populations, and to address the urgent and evolving needs of our state during the current public health crisis.”

In January 2020, the state’s chief procurement officer determined that the bid had been mismanaged. The state would have to redo the bidding process. This decision received pushback and a lengthy legal process ensued with 1.5 million Medicaid-covered lives in the balance.

The request to submit a new RFP has been approved, local news outlets reported, rendering all of the litigation around the 2019 RFP irrelevant.

While the health department cannot expressly say what the new RFP will look like until its publication, the announcement provided some indicators of what the department will be prioritizing.

In particular, the state wants to improve its health rankings. Louisiana currently holds the second-to-lowest rank in the nation for health, according to UnitedHealth Foundation’s health ranking.

“In developing this RFP we will use national research to ensure we are implementing best practices in the management of managed care organizations and we will use lessons learned from prior experience to ensure the outcome best meets the needs of the people we serve,” Phillips added.

Louisiana’s previous RFPs included an emphasis on value-based payment, according to a summary by the Health Management Association. The state is following a shift among state Medicaid programs toward more value-based reimbursement models.

Some states have been shifting their Medicaid managed care organizations away from fee-for-service and toward value-based care. Delaware made this move in 2018. Other states, like North Carolina, have moved to privatize their Medicaid programs.