Frustration mounts about Louisiana Medicaid contract dispute

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Commissioner of Administration Jay Dardenne, the governor’s chief budget adviser, left; House Speaker Clay Schexnayder, R-Gonzales, center; and Senate President Page Cortez, R-Lafayette, speak ahead of a meeting of Louisiana’s income forecasting panel on Friday, Feb. 7, 2020, in Baton Rouge, La. (AP Photo/Melinda Deslatte)

BATON ROUGE, La. (AP) — Louisiana lawmakers are growing frustrated with an ongoing dispute over $21 billion in state Medicaid contracts, with a crucial decision on the deals expected next month but unlikely to settle the matter.

Legislative irritation about the handling of the contracts by Gov. John Bel Edwards’ administration spilled out Thursday evening in a joint House and Senate budget committee hearing. Lawmakers received few answers about when new agreements covering the health care services of 1.5 million Medicaid patients would be in place.

Rep. Rick Edmonds, a Baton Rouge Republican, said lawmakers have gotten too little information about the decision-making that the Department of Health used to choose the four contractors and whether claims of impropriety in the process are true.

“I do think there comes a time when we are owed some information that we can answer some of these perplexing questions,” Edmonds said.

Commissioner of Administration Jay Dardenne, the governor’s chief budget adviser, agreed. But he said state law doesn’t allow some of those conversations currently, while he’s reviewing reams of documents about the contracts and set to decide if they were properly awarded.

“Everybody is frustrated with the process,” Dardenne said. “It is, however, the legal process that is set out.”

At issue are multibillion-dollar Medicaid contracts awarded by the Edwards administration to companies that will oversee care for about 90% of Louisiana’s Medicaid enrollees — mostly adults covered by Medicaid expansion, pregnant women and children. The taxpayer-financed managed care contracts account for roughly one-quarter of Louisiana’s annual operating budget.

Louisiana currently has Medicaid managed care contracts with five companies.

Through a bid process that began in February 2019, the health department chose four companies to do the work going forward — three that currently hold contracts with the health department and one new insurer. The contracts would be worth an estimated $21 billion over three years.

The two losing bidders that currently hold managed care contracts and were slated to lose them — Louisiana Healthcare Connections and Aetna Better Health — filed protests.

Louisiana’s state procurement officer Paula Tregre, charged with reviewing the protests, found that that the health department mishandled the bid process, failing to comply with state law or the agency’s own evaluation and bid guidelines. She scrapped the contract awards and said the health department will have to redo the bid process.

The health department and the four insurance companies chosen for the Medicaid deals — AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana, Humana Health Benefit Plan of Louisiana and United Healthcare Community Plan — challenged Tregre’s decision. They say Tregre made factual and legal errors in her decision.

Tregre’s boss, Dardenne, will decide those appeals. Dardenne told lawmakers the earliest he’ll make a decision is March 17, though he warned it could take longer.

“I assure you all I want to do this as quickly and as deliberately as possible, but I need to do justice to the process,” he said.

Both the Edwards administration and lawmakers acknowledged Dardenne’s decision likely won’t settle the dispute. Bidders who don’t like his ruling could ask a judge to review the bid process, stretching out the contract dispute even longer.

“This will probably end up in court, because whichever way you go, the other side probably is going to sue,” said Sen. Cameron Henry, a Jefferson Parish Republican.

The disagreement over the contract awards hasn’t disrupted health services to the nearly one-third of Louisiana’s population covered by the state’s Medicaid managed care program. The Edwards administration signed emergency contracts to keep the state’s five current contractors in place through this year.

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Follow Melinda Deslatte on Twitter at https://twitter.com/MelindaDeslatte

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