BATON ROUGE, La. (AP) - Louisiana's Medicaid program started the new year under a cloud of uncertainty, amid a continued dispute over multibillion-dollar contracts to provide health services to 1.5 million people.
Lucrative deals with five private companies that manage care for most Medicaid patients, accounting for roughly one-quarter of the state's annual operating budget, were slated to expire at the end of December. Gov. John Bel Edwards' administration chose four companies to do the managed care work, with the deals planned to begin in January.
But two losing bidders that currently hold managed care contracts - Louisiana Healthcare Connections and Aetna Better Health - are protesting that decision, and the legal process stopped the new contract awards from taking effect.
In response, the Edwards administration signed emergency contracts to keep the existing five companies in place for up to another year while the new deals remain stalled, to avoid the disruption of health care access to nearly one-third of Louisiana's population.
Edwards spokeswoman Christina Stephens said the state wanted to ensure "that no one lost access to care while the protest is pending."
"Our goal has always been to provide high quality coverage to the families that rely on Medicaid, while at the same time ensuring that the Medicaid program is efficient and accountable," she said Tuesday in a statement.
The emergency contracts still haven't received approval from federal Medicaid officials, however. The managed care organizations can't get paid under the emergency contracts until Louisiana receives that go-ahead from federal officials, according to Stephen Russo, chief lawyer for the Louisiana Department of Health.
Meanwhile, a new Louisiana health secretary and Medicaid director will inherit the contract dispute. Health Secretary Rebekah Gee announced Monday that she's resigning from the job she's held for four years at the end of the month. The department's Medicaid director, Jen Steele, also is exiting the agency.
The managed care contracts pay private insurance companies to oversee care for about 90% of Louisiana's Medicaid enrollees - mostly adults covered by Medicaid expansion, pregnant women and children. In court filings, Aetna says the three-year contract awards that are being disputed are worth $21 billion.
A decision on the protests has been repeatedly delayed by Louisiana's state procurement officer Paula Tregre as the companies in line to lose their contracts and the health department filed reams of documents with charges and counter-charges. The squabbling has grown more heated with each filing. Aetna also is suing the health department over public records as both contractors slated to lose the managed care work accuse the agency of withholding documents. The health department criticizes the records lawsuit as a delay tactic.
Tregre set a Jan. 17 deadline by which she'll decide whether to throw out the contract awards. But she's extended similar deadlines previously. Even if she holds to the latest deadline, her decision can be appealed and the losing bidders ultimately could take the entire dispute to court, which could further delay any change in contractors.
Louisiana Healthcare Connections and Aetna Better Health have accused the health department of a biased bid review riddled with conflicts of interest and problematic decisions.
"All of Louisiana's citizens, including its Medicaid participants, are entitled to assurance that contract awards of this magnitude are made soundly and fairly. Here, (the health department's) conduct of the contract award process was, from top to bottom, arbitrary, capricious and unlawful," a lawyer for Louisiana Healthcare Connections wrote in its latest protest filing Jan. 3.
The Edwards administration has defended the bid review and scoring process as following Louisiana law, with the new contracts aimed at improving health care and lowering costs. More than 500,000 Medicaid patients would have to switch to new health plans under the change.
