Medicaid contract draws Molina suit

Health insurer says conflicts of interest, ‘ flawed’ process made bidding unfair

Molina Healthcare of New Mexico announced Wednesday it is seeking an injunction against the New Mexico Human Services Department and the department’s secretary, Brent Earnest, after the company lost its contract to provide Medicaid services in the state.

Molina also plans to file a temporary restraining order against both parties, according to a statement.

The company alleges that the state oversaw a “flawed” procurement process for the Medicaid contracts, and that a consultant hired by the department to help evaluate proposals had a con-

flict of interest involving one of the successful bidders.

The consultant, Mercer, was hired by HSD to draft and review the proposals and to train the state agency on how to evaluate the bids.

Molina claims Mercer has a substantial, multibillion-dollar contractual relationship with Envolve, a subsidiary of St. Louis-based Centene Corp. Another subsidiary of Centene, Western Sky Community Care, was one of the three bidders chosen for next year’s contracts.

“With relationships such as these, there is no level playing field,” Molina’s president, Daniel Sorrels, said in a statement. “Biases, favors or other types of relationships should never be a consideration.”

Molina also claimed that the loss of its Medicaid contract would lead to long wait times for “about 25,000 New Mexicans currently receiving behavioral health services.”

The state did not respond to a request for comment.

HSD recently announced the winners of the state’s five-year Medicaid contract, known as Centennial Care 2.0, a list that did not include Molina or UnitedHealthcare, both of which had previously administered Medicaid.

Contracts were awarded to Blue Cross Blue Shield of New Mexico, Presbyterian Health Plan and newcomer Western Sky.

The loss of the contract will slash hundreds of millions of dollars from Molina’s premium revenues, according to a recent Securities and Exchange Commission filing.

About 225,000 New Mexicans have their Medicaid insurance through Molina. There are about 675,000 Medicaid enrollees in New Mexico, roughly one-third of the state’s population. Among Molina’s other allegations:

The state “rushed” the procurement process and excluded stakeholders such as the New Mexico Department of Health, the New Mexico Children, Youth and Families Department and the Office of Superintendent of Insurance.

HSD exhibited a pattern of changing the evaluation factors and adding new ones, resulting in an unfair scoring process. This meant Molina’s technical score was reduced based on undisclosed factors, according to the company.

Centene, the parent company of Western Sky and Envolve, also has a connection to multiple lawsuits alleging improper care in the state’s prison medical system.

Centurion Correctional Healthcare of New Mexico LLC is a joint venture between Centene and the Virginiabased MHM Services Inc., and was chosen to administer the state’s prison medical services contract in May 2016. Centurion has been the subject of at least 17 lawsuits since it began its contract, according to a recent investigation by the Santa Fe New Mexican.

Court records show that the suits include allegations of improper care and wrongful death.

Centene says it inherited many of the issues raised in the suit from the previous provider.