Official says no to WellCare request to continue operation

A state arbiter on Thursday denied WellCare of Iowa's request to continue operating while the company appeals a decision to toss out its contract to help manage Iowa's $5 billion Medicaid program.

The Tampa, Fla-based company requested a stay with the Iowa Department of Human Services earlier this week after Janet Phipps, director of the state Department of Administrative Services, said WellCare's bid should be disqualified and the subsequent contract terminated.

Phipps said the company failed to disclose a corporate integrity agreement that would have included information on $137.5 million in fines to resolves false claims litigation.

WellCare maintains that it 'fully disclosed and described in great detail' the settlement payment and the corporate integrity agreement in its initial response in the financial disclosures and in the clarifying response the company submitted to the evaluation committee.

The company said Monday in its request for stay that WellCare could suffer 'irreparable injury' if its stay is denied 'because it will begin losing employees, will not be able to further participate in readiness reviews by DHS and the federal Centers for Medicare and Medicaid Services, and will lose members assigned to it.'

In its Monday filing, WellCare stated that it has invested more than $11.2 million in the state, finalized contracts with more than 14,600 health care providers and hired 178 people to be ready for the March 1 start date.

However, Phipps noted that under Iowa law, financial loss alone typically is not enough to constitute irreparable injury, adding 'in requesting a stay, WellCare would arguably continue to expend resources, which would add to its invested times, efforts, etc.'

She went on to write that granting a stay could set DHS back in its efforts to implement managed care in addition to harming the public.

'A disruption of the transition process will create substantial uncertainly in the marketplace for health services, disrupt delivery of these critical services to hundreds of thousands of Iowas, and potentially impose additional costs of stakeholders,' she wrote.

Despite the setback, WellCare continues to fight the decision.

'We have always known this matter would proceed to district court,' Crystal Warwell Walker, WellCare spokeswoman, said Thursday. 'We are pursuing the appeal we filed on Dec. 22.'

Also on Thursday, Phipps denied Meridian Health Plan of Iowa and Aetna Better Health of Iowa's requests to stay implementation of managed care. The companies — which were both passed over for managed-care contracts — have argued the original bidding process was flawed and biased.