Blue Cross Blue Shield of Rhode Island and Tufts Public Health Plans will have their bids for the state Medicaid contract reevalauted, in response to an appeal by both companies after losing the contract initially. (Alexander Castro/Rhode Island Current)
Rhode Island officials have agreed to take a fresh look at the bids received for a five-year, $15.5 billion Medicaid contract based on an appeal by the two companies denied in an initial award.
In an Oct. 15 letter to State Purchasing Agent Nancy McIntyre, Chief Purchasing Officer Jonathan Womer, who also heads the Rhode Island Department of Administration, acknowledged some, but not all, of the concerns raised by the losing bidders, along with feedback from the state Medicaid office.
“It is imperative that the state conduct a comprehensive, fair and well-documented review of the entities that will govern access to Medicaid providers and services,” Womer wrote.
The massive state contract, equal to 25% of the state’s annual budget, determines which vendors run the state’s medical assistance program for nearly 320,000 Rhode Islanders. A tentative award announced July 16 split the five-year contract between two of the bidders — Neighborhood Health Plan of Rhode Island and UnitedHealthcare of New England.
Two other bids, submitted by Blue Cross Blue Shield of Rhode Island and Tufts Public Health Plans, Inc., were disqualified because they did not meet a minimum score set by a review committee.
The losing companies filed separate appeals of the state’s decision, pointing to flaws in the scoring criteria and the makeup of the review committee, which Blue Cross alleged unfairly included a former employee of UnitedHealthcare.
Womer acknowledged that the state was too vague in explaining the scores awarded by the original, five-person review committee.
“The lack of articulated, comparable factors influencing each bidder’s score make it extremely difficult, if not impossible, to determine whether the scoring was arbitrary and/or capricious,” Womer wrote. “Thus, the Evaluation Memorandum is deemed insufficient.”
The state Medicaid office also raised questions about the scoring, according to Womer’s letter.
A new review committee will be set up, including a representative from the state division of purchasing and at least one other state agency, to take a fresh look at all four bids. The original review team was composed entirely of employees for the Rhode Island Executive Office of Health and Human Services (EOHHS), which Blue Cross pointed out violates state procurement rules.
Blue Cross also alleged a conflict of interest because one of the original review committee members used to work for United Healthcare. However, Womer rebuffed the allegation, noting the person in question worked for a company affiliate on an unrelated dental contract.
The state is also bringing in a non-government subject matter expert, with the possibility of changing its scoring criteria as part of the reevaluation, Womer wrote.
Under the original state timeline, a new contract was set to start July 2025, and run through 2030, with an optional, five-year extension. The state did not immediately return inquiries for comment Wednesday morning asking how the reevaluation would affect the existing timeline.
But, the state has opted not to scrap the existing procurement process, as Womer noted in his letter.
“The preference is to address the concerns related to the evaluation phase,” Womer wrote. “Both the State and bidders have already invested significant time and resources in this process.”
None of the four bidders immediately responded to inquiries for comment Wednesday morning.
In fiscal 2022, the most recent data available, Neighborhood was responsible for more than half of the state’s Medicaid patients, while UnitedHealthcare had 30% and Tufts had 5%. The remaining 6% was paid directly to providers through a fee-for-service model, rather than through the managed care organizations.
This story will be updated.
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