More than a year after Mississippi Medicaid announced it was contracting with three companies to manage the care of their beneficiaries, those contracts have not been awarded.
That’s because two companies that weren’t chosen say the selection process was unfair.
UnitedHealthcare and Amerigroup, two for-profit managed care companies, were not chosen by Mississippi Medicaid as one of its contracted companies entrusted with managing beneficiaries’ health care. The two organizations have subsequently filed protests with the state, alleging the selection process was flawed, leading to a months-long stalemate over who will manage Mississippi Medicaid beneficiaries’ care after next summer.
The stakes are high: the contracts, funded by state and federal dollars, are worth billions.
The majority of Medicaid recipients in most states are enrolled in managed care organizations. Through a lucrative contract agreement, divisions pay these companies to deliver services to beneficiaries.
In exchange for a monthly payments — regardless of whether services were or were not used by a beneficiary during that period — the managed care organization must maintain a network of providers for its enrollees and ensure enrollees are not billed for covered services.
According to its website, MississippiCAN currently provides health insurance benefits for more than 480,000 of the state’s most vulnerable citizens, including poor adults and children, people who are disabled and pregnant people. Medicaid insures about 837,000 Mississippians total as of September.
Though they’re theoretically well-intentioned — to increase services for beneficiaries and reduce costs for Medicaid — managed care organizations have been criticized by politicians, patients and health care leaders for prioritizing profit and hindering patient care.
Managed care organizations’ performances can vary greatly, and which ones the Medicaid agencies contract with is up to them. That’s decided through a process called procurement.
In December 2021, the Division of Medicaid began seeking new contracts and solicited “requests for qualifications” from managed care companies. Five prospective contractors submitted proposals in March 2022.
Mississippi Medicaid announced in August 2022 that it intended to award contracts to three of those: TrueCare, Magnolia Health and Molina Healthcare.
TrueCare, a not-for-profit company, was created by hospitals along with the state hospital association to provide what they believe is better care to patients, compared to traditional managed care organizations.
Molina Healthcare and Magnolia Health are both privately-owned companies that already administer services to Medicaid beneficiaries, along with UnitedHealthcare.
Magnolia has gotten the biggest contracts of all three — almost $9.3 billion for its contracts with Medicaid since 2017, which includes $1.2 billion in the emergency contract.
Magnolia is a subsidiary of health giant Centene. The St. Louis-based company is the nation’s largest Medicaid managed care company and one of Gov. Tate Reeves largest campaign donors.
Centene was previously investigated over suspicions it was over-inflating bills to Mississippi’s Medicaid division. The company never admitted wrongdoing, though Centene settled with the state in June of 2021 for $55.5 million.
Medicaid spokesperson Matt Westerfield said there were no “rules that would exclude Magnolia from the process due to the Centene settlement” when asked why, if the company was previously investigated, it was awarded one of the contracts.
Since 2017, Molina has been paid $2.8 billion to provide services for MississippiCAN and Medicaid’s Mississippi Children’s Health Insurance Program, according to the state’s contract database. In the most recent contract, the emergency contract that runs from 2023 until 2024, the company is getting paid more than half a billion dollars.
For the same services in the same time period, United received nearly $8.4 billion. The current emergency contract pays out more than a billion dollars for their services over the course of a year.
Companies involved in the process have seven days to file protests before the agency can officially award the contracts. Then, the contracts go to the state’s procurement review board for final approval.
Following Medicaid’s announcement about the new contracts in August, UnitedHealthcare, which had a contract with the agency the prior year, and Amerigroup, the two companies that were not chosen, submitted protests.
It’s unclear what United’s claims are. Mississippi Today did not have a copy of their protest at the time of publication.
Amerigroup’s protest alleges that Mississippi Medicaid failed to conduct a “blind” evaluation process, didn’t follow the state’s rules for contract procurement, the process was structurally flawed and “outside influences” affected its fairness.
Amerigroup cites several instances where it says companies shared identifying information. According to the protest, TrueCare revealed its connection to the Mississippi Hospital Association by mentioning the health information exchange program, which allows hospitals to share important information about patients with each other. It’s the only company with access to the exchange because of its association with hospitals.
Amerigroup also takes issue with Molina including a company-specific vaccine incentive program, “curved” graphics similar to their logo and “well-known” Molina food insecurity initiatives in its proposal. Magnolia’s proposal included mentions of its partnership with Adelade and AT&T, which would have been enough to identify them, the protest claims.
Magnolia and Molina did not respond to Mississippi Today’s requests for comment regarding these allegations. TrueCare’s CEO Richard Roberson declined to answer questions because “under the Division of Medicaid’s rules, all offerors are prohibited from making public disclosures to the media regarding the procurement.”
The “outside influences” cited by Amerigroup’s protest refers to a letter Sen. Kevin Blackwell, R-Southaven and chairman of the Senate Medicaid Committee, sent to Mississippi Medicaid Executive Director Drew Snyder on Dec. 3, 2021, a few weeks before the procurement process began. Blackwell in the letter vouches for TrueCare and criticizes the performances of the current managed care organizations.
Westerfield said the letter was “never seen by any evaluator, nor was any evaluator made aware that it had even been written.”
“It had no effect on the RFQ process or outcome,” he said.
The protest also includes a screenshot of texts between Drew Weiskopf, a consultant assisting with the evaluation, and Margaret Middleton, a lawyer for Mississippi Medicaid. In the texts, Weiskopf appears to insinuate that the evaluators were able to identify the companies — he refers to their “urge to standup (sic) and shout ‘I know who this is!’” and uses a GIF from the movie Elf in which a character identifies Santa Claus. The texts were allegedly sent during the evaluation meetings scoring the blind proposals.
“The texts do not reflect that any evaluator expressed knowledge of any Offeror, nor could the texts have done so, as no expression was ever made,” Westerfield said.
The Division of Medicaid’s response to the protests, which was to affirm its decision to award the contracts to the three managed care organizations, were issued this past summer. Both organizations appealed the agency’s decision to the procurement review board, and both of those protests are still pending.
As a result of the ongoing complaints, Medicaid extended the contracts of the current managed care organizations — United, Molina and Magnolia — and then issued one-year emergency contracts to them. Those contracts, which began in 2017, will be in place until June 2024.
Violations during the “blind” portion of the process have previously derailed Mississippi Medicaid’s procurement process.
Medicaid Executive Director Drew Snyder told lawmakers at a Senate Medicaid Committee hearing last February that “following the instructions for blind evaluations is one of the perilous spots where procurements can go off the rails.”
“I’m sure more than one agency can share a story of a lengthy procurement that had to be terminated because every vendor revealed some kind of identifying information about itself,” he said.
During a Medicaid procurement for different services two years ago, the agency confirmed that a company’s name appeared in a footnote, which delayed the process.
During the current procurement for managed care contracts, Medicaid said it took several steps to ensure the process was fair, including extensively reviewing submissions, including an independent review by a government office that plays a major role in state procurement processes, which found no problems. The agency also required mandatory training for procurement evaluators, who were “told repeatedly to inform [the Division] if they found any identifying information,” according to the agency.
“No evaluator ever notified DOM that he or she knew the identity of any Offeror, nor did any evaluator make any statement in the evaluation process inferring that he or she knew the identity of any Offeror,” Westerfield said via email.
The fate of the contracts now rests with the procurement review board, which has not yet set a date to hear the protests.
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