Official says no to delaying Iowa Medicaid managed-care change

Janet Phipps - the state official charged with rendering a final decision on whether to keep WellCare of Iowa's contract intact - said Tuesday she will grant four parties' requests for review on an administrative law judge's proposed decision. But she denied requests, made by two managed-care companies passed over for contracts, for a stay that would halt implementation of the managed-care contracts.

The Iowa Department of Human Services and Meridian Health Plan of Iowa each filed requests for review on Monday. However, the two parties were asking for very different reasons: DHS believes the contract should stay, while Meridian suggests the whole bidding process begin again.

WellCare of Iowa and Aetna Better Health filed requests for review last week.

On Tuesday, Phipps, who was appointed director of Iowa's Department of Administrative Services by Gov. Terry Branstad in May 2014, also denied Aetna and Meridian's request for an expedited final ruling.

The companies - both passed over to manage the state's $5 billion Medicaid program - had asked for a decision to be made by Wednesday, but Phipps said that time period - two days after the close of the appeal period - 'does not allow for the necessary due diligence in performing a thorough review.”

This all comes in response to administrative law judge Christie Scase's Nov. 25 proposed decision to toss out WellCare's contract. Scase said WellCare failed to disclose a corporate integrity agreement that would have included information on $137.5 million in fines to resolve false claim litigation.

'Without this information, evaluators could not exercise reasoned judgment as to whether WellCare's failure to disclose these events in its initial response was an intentional or material omission,” Scase wrote.

The U.S. Department of Health and Human Services negotiates corporate integrity agreements with health care providers or entities as part of settlements that arise under a variety of civil false-claims statutes. Those entities agree to the obligations, and in exchange, HHS allows them to continue to participate in Medicare and Medicaid, according to the HHS website.

In its request for review, Iowa DHS said Scase 'erred” when she found that DHS abused its discretion when it did not disqualify WellCare of Iowa for not disclosing prior litigation, penalties and regulatory sanctions.

'The failure to exercise discretion is premised on the fact that the evaluation committee did not have a copy of WellCare's Corporate Integrity Agreement with the Department of Health and Human Services and the specific amount WellCare paid in a settlement agreement to resolve false claims allegations,” according to the filing. 'Committee members understood that as a result of false claims allegations against WellCare, the company made substantial payments and was party to a (corporate integrity agreement) that imposed compliance requirements and allowed it to continue to participate in Medicaid and Medicare.”

Meanwhile, Meridian - much like Aetna - claims the entire procurement process - the largest in state history - was flawed and DHS failed to treat bidders equally. The company suggests DHS terminate all awarded contracts and restart the process.

'The record shows that, over and over, DHS did not follow the (request for proposal) or the law in evaluating the bid proposals,” the filing reads.

Meridian said DHS favored one bidder over another and violated rules that it established in the request for proposal.

'And under no circumstances may an agency allow a procurement to stand when outright corruption is found in the process. These are not minor matters that can be resolved based on deference.”

DHS spokeswoman Amy Lorentzen McCoy said the department does not have a timeline on when Phipps will make a decision.