Ohio judge stops state Medicaid contract process


By Ann Sanner on June 27, 2012

COLUMBUS, Ohio (AP) — In a dispute over the scoring of contract applications, a central Ohio judge on Tuesday blocked the state from moving forward with tentative Medicaid contracts it awarded to five health plans.

Franklin County Common Pleas Judge Richard Sheward ordered the contract process halted for now, at the request of Aetna Inc.’s Better Health of Ohio.

Aetna is suing the Ohio Department of Job and Family Services because state officials had selected the company for a contract in April and then revoked the decision earlier this month. Aetna claims the state retroactively changed the definition of certain requirements in its request for contract applications, and the company wants its contract reinstated.

The contract awards are preliminary. The health plans, or managed care organizations, must first pass a state assessment, in which they must prove that they will be ready and able to provide care when Medicaid enrollment under the plans begins in January.

The state had expected to complete its readiness review by the end of August and fully award the contracts. But it’s unclear how the judge’s ruling on Tuesday will affect that timeline.

A spokesman for Job and Family Services says the agency won’t comment on pending litigation.

Sheward has set another hearing for July 23 to decide whether the order should be extended.

The eventual contract winners will provide health care services to more than 1.6 million poor and disabled people, or roughly two-thirds of the state’s Medicaid population. The contracts provide billions in government work to the companies.

The health plans chosen were said to be the highest-scoring applicants in the state’s Medicaid contract process. But five of six companies that lost bids for the contracts had filed formal protests with Ohio officials in April, claiming flawed and inaccurate scoring.

A state review of the contract applications changed how points were scored. And on June 7, state officials said Aetna Better Health of Ohio and Meridian Health Plan of Ohio would no longer get the contracts.

Instead, Molina Healthcare of Ohio Inc., a subsidiary of Molina Healthcare Inc., and Buckeye Community Health Plan, a subsidiary of Centene Corp., were picked.

Ohio has also selected CareSource, Paramount Advantage and United Healthcare Community Plan of Ohio.

The health plans were judged on certain components, including experience, care management and clinical performance. The provider network was also a factor but not as heavily weighted.

The state’s review found that Meridian should have been disqualified because it didn’t have a necessary health-insuring corporation license or an application pending for one at the time of its bid. And Aetna lost many points for experience because the state said it did not provide evidence of full liability for certain plans with other states.

Jan Stallmeyer, a senior vice president for Aetna Medicaid, said Tuesday the state should take time to further re-examine the questions raised about the manner in which the contracts were awarded and re-awarded.

“Given the size of this contract and the importance of these healthcare services to hundreds of thousands of Ohio citizens, many of whom are in the most vulnerable segments of society, it is in everyone’s best interest to have a thorough and transparent review,” Stallmeyer said in a statement.

About $5.1 billion in state and federal money was paid to all the managed care plans in the fiscal year that ended June 30, 2011, according to Job and Family Services.