Louisiana health department asks to reopen bids for Medicaid contracts

The Louisiana Department of Health wants to seek new bids for multibillion-dollar Medicaid contracts managing the health care of 1.5 million people, in an effort to end a legal dispute that has dragged out over a year about four contractors the agency previously picked for the work.

Health Secretary Courtney Phillips announced Friday that she’s asked the governor’s Division of Administration to let her rebid the Medicaid managed care contracts rather than continue the legal wrangling over deals her predecessor approved.

As the disagreement stretched over months, Phillips took over leadership of the department, the coronavirus outbreak surged across Louisiana and the Medicaid rolls have grown larger as more people lost their jobs.

“Much has changed in the health care industry since the original (request for proposals) was drafted, and we must look ahead to innovative solutions in health care delivery while increasing accountability and addressing health disparities,” Phillips said in a statement.

The taxpayer-financed managed care contracts account for roughly one-quarter of Louisiana’s annual operating budget. They allow private companies to oversee health care services for about 90% of Louisiana’s Medicaid enrollees. 

Managed care companies are doing the work currently through emergency contracts that end in December, and the health department intends to seek another round of those arrangements to keep the companies in place if it rebids the work. Louisiana currently has Medicaid managed care contracts with five companies.

Through a bid process that began in early 2019, the health department—overseen by then-Secretary Rebekah Gee—chose four companies to do the work going forward. However, the department’s decision was disputed, with losing bidders protesting. Louisiana’s state procurement officer, Paula Tregre, was charged with reviewing the protests and, after finding the health department mishandled the bid process, scrapped the contract awards.  

The health department and the four insurance companies chosen for the Medicaid deals challenged Tregre’s decision, and their appeal is pending with Commissioner of Administration Jay Dardenne. Read the full story from the Associated Press.