Louisiana’s Medicaid Managed Care Contracts in Disarray

Louisiana’s chief procurement officer recently threw out several multibillion-dollar Medicaid managed care contracts after uncovering the mismanagement of the bid process, according to national news sources.

Chief procurement officer Paula Tregre alleged that the health department mismanaged the bid process for deals that provided health services to over 1.5 million people. Additionally, the state government failed to follow state law and guidelines to determine which private companies should receive contracts to manage care for Louisiana’s Medicaid patients. 

After the decision issued last Friday, Tregre explained that the health department’s actions “resulted in a fatally flawed procurement process.” 

Tregre revoked the three-year contract awards estimated to be worth nearly $21 billion following protests filed by two of the losing bidders. She claimed that the health department must do the bidding process over again to choose the insurance companies that will oversee care for almost 90 percent of Louisiana’s Medicaid enrollees. 

Tregre’s decision will not disrupt Medicaid services and the Edwards’ administration signed emergency contracts in order to keep the state’s five Medicaid managed care contractors in place this year. But these deals have been slated to expire at the end of December. 

“The administration is reviewing the decision and will work with the Louisiana Department of Health to determine the next steps for this procurement moving forward,” Christina Stephens, Edwards’ spokesperson said in a statement give to the Associate Press on Saturday. 

A bid process that began in February chose four companies to do the work moving forward. Three currently hold contracts with the health department and one new insurer, the press release stated. Louisiana Healthcare Connection and Aetna Better Health filed protests after they were slated to lose their managed care contracts.

The additional Advocate report highlighted that LHCC saw major flaws in the RFP processes such as a “disregard for fairness among members of the evaluation committee and a failure to put appropriate safeguards in place to ensure the integrity of the process,” Jamie Schlottman said in an LHCC press release.

LHCC is one of the largest provider networks in the state, insuring over 445,000 Medicaid beneficiaries, so the effects of the contract change will be significant. 

This isn’t Aetna Better Health’s first time challenging a Louisiana Health Department Medicaid MCO contract. But in this situation, the size of the award was in question, not the entirety of the contract.

Lawmakers, providers, and payers were also concerned about the process of shifting over 500,000 members into alternate plans in the span of nearly two months. 

But the Edwards administration defended itself against the allegation.

“Our goal has always been to provide high quality coverage to the families that rely on Medicaid, while at the same time ensuring that the Medicaid program is efficient and accountable,” Stephens recently explained. 

Tregre explained that the bid evaluators failed to verify the accuracy of the submitted insurance lists which touched on doctors, clinics, and other health providers they would use. In addition, numerous changes to one of the evaluation tools after bid reviews started significantly harmed the scoring process.