Dive Brief:
- A Louisiana regulator rescinded lucrative Medicaid contracts awarded in August to four insurance providers — AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana (Healthy Blue), Humana Health Benefit Plan of Louisiana and United Healthcare Community Plan.
- The decision comes in response to protests filed by two insurers that were denied new contracts with the state — Centene's Louisiana Healthcare Connections and Aetna Better Health.
- Louisiana's Health Department did not comply with state law or its own evaluation guidelines, the state procurement officer said in a decision Friday, rendering the request for proposals evaluation "fatally flawed." The department will now redo the bid process.
Dive Insight:
Medicaid managed care contracts are closely watched by payers, especially companies like Centene that are heavily invested in the space. Centene and Aetna were recently winners in the Texas contracts, worth about $10 billion.
Louisiana's state procurement officer, Paula Tregre, announced she would toss that state's contracts in a protest decision responding to claims of a mishandled bidding process. Centene and Aetna, which previously held Medicaid contracts with the state, filed the protests after losing out on the new contracts in August.
The health department, which is responsible for evaluating provider proposals and awarding new contracts, "arbitrarily and capriciously" made several changes to its scoring guide after the process began, according to the decision. The changes were "not insignificant; they directly affected scoring."
The department also excluded mandatory components from evaluations, such as a Provider Network Listing response, which outlines the network of physicians, hospitals and other resources a contractor would use.
The state's previous contracts were set to expire in December. Emergency contracts are now in place to retain the five current Medicaid contractors until the dispute is settled.
In fiscal year 2018, Louisiana spent $7.6 billion on such contracts to cover the state's nearly 1.7 million Medicaid enrollees.
Other states have recently awarded Medicaid contracts that were later protested by losing bidders. Anthem and Passport Health Plan filed protests in Kentucky last month after losing out on that state's managed care contracts.
Louisiana's commissioner of administration has until Friday to appeal the decision.