The Louisiana Department of Health is seeking to scrap multi-billion-dollar contracts for Medicaid services for more than 1.6 million people and restart the bid process, after challenges to the deals tied them up for more than a year.
The decision ends a saga that began in early 2019 with the goal of contracting with new companies to manage care for Medicaid enrollees, contracts that are among the most lucrative in state government.
The Health Department is asking for permission to withdraw its intent to award four contracts that have been halted for a year and start a new bid process for the deals.
After selecting four organizations to do the work for an estimated $21 billion over three years, the two losing bidders challenged the decision almost exactly one year ago. Since then, the Health Department has been unable to move forward with the deals as the challenges ground the effort to a halt.
Courtney Phillips, who took over as the Health Department’s secretary this spring after the deals had been tied up for months, said it’s time to restart the process.
“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,” Phillips said in a statement.
In January, the state procurement officer tossed out the awards issued by the Health Department. The agency then appealed the decision.
Since the protests of the contracts began, the Health Department has had emergency contracts in place with the previous managed care organizations, and said Friday the new process will not interrupt access to care for enrollees. Open enrollment for Medicaid recipients runs from Oct. 15 to Nov. 30.
The Health Department said withdrawing the contracts will end the ongoing protests by the two losing bidders, Louisiana Healthcare Connections and Aetna Better Health. The agency had tried to move forward with contracts with four organizations: AmeriHealth Caritas Louisiana, Healthy Blue, Humana Health Benefit Plan of Louisiana and UnitedHealthcare Community Plan.
If the agency’s request to scrap the contracts is approved by Commissioner of Administration Jay Dardenne, the agency said it will start developing a new request for proposals and hopes to publish it next year.
Medicaid in Louisiana covers 1.6 million people and represents a $13.8 billion annual budget, most of which is paid by the federal government.
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