Companies and Health Department Appeal Overturned Contracts

BATON ROUGE – The Louisiana Department of Health and four private companies who won Medicaid contracts worth billions have appealed a state official’s decision to rescind those contracts.

They argue Chief Procurement Officer Paula Tregre didn’t follow the law when she ruled the awards should be scrapped and appealed to her boss, Commissioner of Administration Jay Dardenne.

Dardenne and LDH’s leaders both work for Gov. John Bel Edwards. Once Dardenne makes a decision, an aggrieved party can turn to the 19th Judicial District Court in Baton Rouge.

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Louisiana contracts with managed care organizations to oversee utilization, cost and quality of care for Medicaid recipients. The MCOs work much like private insurers, and the state pays them a fee for each recipient who signs up with their plan.

The state’s agreements with five MCOs were scheduled to expire at the end of 2019. LDH chose four companies – three of the current contract holders at the time and one new company – to manage care going forward.

Louisiana Healthcare Connections and Aetna Better Health, who had contracts with the state but were not picked for new contracts, filed protests alleging bias, forcing LDH to enact emergency contracts with the current providers while the dispute is resolved.

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In her letter explaining her decision to invalidate the contracts, Tregre says the department didn’t verify the bidders’ provider networks, as the request for proposals required, and “arbitrarily and capriciously” changed the provider network scoring system after the evaluation began. The health department’s lawyers didn’t review the changes as required, she says.

But LDH says the decision came 151 days after the protests were filed, violating a 14-day deadline spelled out in the relevant statute. They dispute Tregre’s assertion that the provider networks were not scored, which they say is “completely unsupported by any evidence,” adding that scoring the networks is not required by statute.

LDH officials say their legal department “implicitly approved” modifications to the scoring guide. They say the department did not violate its internal guidelines when evaluating the proposals as Tregre alleges, and even if it had, such guidelines don’t carry the force of law and should not be the basis for scrapping a contract award.

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Dr. Rebekah Gee, who leads the health department, has resigned from the department, effective Friday. She has said she was not involved in scoring the proposals. A successor has not been announced.


By David Jacobs of the Center Square


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