Medicaid switch in Iowa still possible by Jan. 1, Branstad says

DES MOINES - Gov. Terry Branstad said Monday he expects the state's planned shift to Medicaid services provided by private managed care companies will take effect on Jan. 1 as scheduled, despite challenges to the process that have surfaced.

The governor told reporters he believes a state administrative law judge will uphold the procedures used by the Iowa Department of Human Services in awarding contracts to four bidders, a process that is being challenged by three private companies passed over in their offers to manage the state's $4.2 billion Medicaid program.

Branstad said it is common in situations where the state seeks bids for a major project - in this case, the largest state government procurement in Iowa history - that the losing bidders seek to exhaust any potential remedies that might overturn the awards.

Last month DHS officials announced they had signed contracts for the new Medical Modernization care coordination effort with managed care organizations Amerigroup Iowa, Inc.; AmeriHealth Caritas Iowa, Inc.; UnitedHealthcare Plan of the River Valley, Inc.; and WellCare of Iowa, Inc.

Three private companies - Aetna Better Health, Iowa Total Care and Meridian Health Care Plan of Iowa, who were passed over for Aug. 17 awards have challenged the bidding process. Their appeals went before administrative law judge Christine Scase last week, with a ruling expected this month.

The losing bidders have appealed their requests for reconsiderations that were turned down by DHS Director Charles Palmer on grounds the agency's process was 'fundamentally flawed” on a variety of grounds, ranging from evaluator bias to scoring methodology deficiencies, process flaws and potential conflict of interests. Attorneys representing the three challengers want the department ordered to re-evaluate the bids using an independent, disinterested arbiter.

DHS officials have defended their process, noting they have held nearly 90 public and stakeholder meetings since announcing the modernization initiative and have scheduled additional meetings to explain the transition that will take place by the Jan. 1 implementation date.