Branstad defends Medicaid bidding

DES MOINES - Gov. Terry Branstad is defending his administration's handling of the bidding process for companies looking to manage the state's Medicaid program, hoping to avoid lawsuits that could delay plans to privatize the $4.2 billion program serving 560,000 Iowans annually.

Three companies that were among the 11 bidders for the state's Medicaid modernization proposal are asking Iowa Department of Human Services' officials to reconsider the process in which four companies were selected this month to manage the program - alleging it was flawed.

On Aug. 17, DHS officials said they plan to finalize contracts this fall with the four bidders who will participate in transforming Iowa's Medicaid program into a risk-based system under Branstad's Medicaid Modernization initiative - a change that requires federal approval.

The winning bidders were identified as Amerigroup Iowa Inc.; AmeriHealth Caritas Iowa Inc.; UnitedHealthcare Plan of the River Valley Inc.; and WellCare of Iowa Inc.

Three competing companies - Aetna, Iowa Total Care and Meridian - filed written requests for reconsideration on a variety of grounds, ranging from evaluator bias to scoring methodology deficiencies, process flaws and potential conflict of interests.

DHS spokeswoman Amy Lorentzen McCoy said Monday there is no specific deadline for the agency to decide on the requests for reconsideration. In the meantime, DHS officials plan to negotiate contracts this fall with a Jan. 1 implementation date for an approach that is projected to save $51 million in the first six months.

During his weekly news conference Monday, Branstad commended DHS officials for taking 'a very thoughtful and deliberative approach” to the bidding process and the subsequent evaluation of the submitted proposals.

'Obviously, when there is this much money at stake and you're not one of the four successful ones, you're going to be disappointed, and that's true in just about any time that you have this type of process,” Branstad told reporters.

'I believe the process is fair. I feel confident that the Department of Human Services is approaching this in the correct way,” he added.

Branstad noted that more than 20 other states have adopted similar Medicaid approaches and his administration is trying to learn from those experiences how to provide quality service that focus on improving outcomes for Medicaid recipients while avoiding duplication and protecting taxpayers' interests.

Media reports have indicated that each of the four companies selected to manage Iowa's Medicaid services program has faced charges of fraud or mismanagement, with some resulting in significant fines. But Branstad countered that those problems have been corrected and the four selected bidders are 'substantial companies that have had significant experience.”

'I guess I challenge you to find any Medicaid provider of any magnitude that hasn't had some issues in the past. That's just kind of the nature of it,” he told reporters. 'But we need to learn from that and we need to make sure that the mistakes that have been made in the past are not repeated.”

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