WellCare asks district court to review decision to end Medicaid contract

After a state arbiter knocked WellCare of Iowa out of the mix of companies selected to provide managed care to Iowa Medicaid recipients, the company is fighting back with a one-two punch.

On Monday, it requested a stay from the Department of Human Services to maintain the status quo while it could appeal the decision and, late on Tuesday, it filed a petition for judicial review in Polk County District Court.

Janet Phipps, director of the state Department of Administrative Services, said Friday that WellCare's bid should be disqualified and the subsequent contract terminated. Phipps - who agreed with an administrative law judge's earlier proposed decision to toss out the contract - said the company failed to disclose a corporate integrity agreement that would have included information on $137.5 million in fines to resolve false claims litigation.

The Tampa, Fla.-based company maintains that it had disclosed the corporate integrity agreement in addition to information on its settlement in both its initial bid response and in its clarifying answer.

'As a result of Director Phipps' erroneous decision, WellCare has been harmed, unduly prejudiced, and its substantial rights have been denied,” according to the filing.

Meanwhile, Meridian Health Plan of Iowa - a managed-care company the state passed over - asked DHS to stop implementing contracts with Amerigroup Iowa, AmeriHealth Caritas and United Healthcare Plan of the River Valley - the three remaining managed-care organizations - while its appeal is pending.

The company - which intends to file a petition for judicial review - says WellCare tainted the procurement process and that DHS 'displayed a clear bias in favor of WellCare.”

'To restore integrity to the process, the competition should be reopened and bid proposals resolicited and rescored,” according to the filing.

Meridian made a similar claim earlier in December, asking DHS to stay the implementation of the managed-care contracts. The request was later denied.

Meridian contests it would be 'irreparably harmed absent a stay” due to the fact that the remaining managed-care organizations are enrolling beneficiaries, contracting with providers and hiring new employees.

'At a certain point, DHS will undoubtedly argue that the switch to managed care has reached a proverbial ‘point of no return,'” according to the filing. 'By then, Meridian faces irreparable harm because even if Meridian wins on the merits, that win may come at a time when performance under the contracts will have been substantial, and the reviewing court may be unable to undo what DHS and the apparent winning bidders have done.”

Aetna Better Health of Iowa - another company passed over for a managed-care contract - filed a motion in Polk County District Court last week, asking the court to issue a stay or temporarily prohibiting DHS from further implementation of managed care.