United Healthcare pact advances
Protest by other bidder for state retirees’ coverage denied
The state procurement director has denied Benistar Administrative Services’ protest of the state’s Employee Benefits Division’s award of a contract to provide group Medicare Advantage with prescription drug coverage to eligible retirees in the state’s health insurance plan for public school and state employees to United Healthcare Insurance Co.
Procurement Director Mitch Rouse’s denial of the protest on Thursday cleared the way for Arkansas Legislative Council Co-Chairs Sen. Terry Rice, R-Waldron, and Rep. Jeff Wardlaw, R-Hermitage, to sign off on the proposed state contract with United Healthcare later Thursday, according to Bureau of Legislative Research records released Friday.
Benistar’s filing of the protest led the Legislative Council on June 17 to authorize its co-chairs to sign off on the proposed contract with United Healthcare after the state’s procurement director made a determination on the protest by Thursday and if the terms of the proposed contract did’t change.
On June 3, the state Board of Finance approved the proposed contract with United Healthcare.
Minnesota-based United Healthcare, Connecticut-based Benistar and Kentucky-based Humana Insurance Co. are the three companies that submitted bids to the state for the contract.
Jake Bleed, director of the state’s Employee Benefits Division, told the Finance Board last month that the state’s Employee Benefits Division plans to contract with United Healthcare to offer Medicare Advantage services to eligible retirees in calendar years 2023, 2024 and 2025, and additional years can be added upon conclusion of the initial three-year term.
There are about 16,000 retirees in the state’s health insurance plan for public school employees and about
14,000 retirees in the state’s health insurance plan for state employees, he said.
Retirees, who are 65 or older or who are otherwise eligible for Medicare, will be automatically enrolled in the Medicare Advantage program and given the opportunity to opt out or retain existing benefits, Bleed said in a memo to the state Board of Finance last month.
The benefits offered under Medicare Advantage will mirror existing benefits but also offer additional services, including coverage for vision, dental, hearing and other benefits that are not currently provided to retirees, he said.
The Medicare Advantage program will offer significant savings to retirees and the state, and United Healthcare will work statewide to educate retirees and health care providers on the program to ensure all retirees have an opportunity to make informed decisions, Bleed said.
Rouse told lawmakers last month that Benistar was disqualified because the firm didn’t meet the minimum requirements for the Employee Benefits Division’s contract.
Attorney J. William Eshelman of Washington, D.C., who represents Benistar Administrative Services, said in a June 10 letter to the state’s procurement coordinator Tanya Freeman that Benistar’s offer was improperly rejected.
Any award to United Healthcare “is, at minimum, as flawed as the State’s initial rejection of Benistar’s Offer,” Eshelman wrote in his letter to Freeman.
He said that the acquisition process employed in the state’s solicitation, evaluation and apparent contract award “is no more than an anti-competitive process, which frankly presents itself more as justification for a predetermined outcome than a legitimately competitive process.”
Rouse said in a letter dated Thursday to Eshelman that he denied Benistar’s protest.
He rejected claims that Benistar was improperly disqualified from consideration and United’s evaluation was improper or collusive. United received the highest technical scores and its offer was about $47 million lower than the next lowest bidder, which was not Benistar.
Rouse said Benistar failed to assert any facts that establish it was a responsible or responsive bidder that met the minimum qualifications in the state’s request for proposals.
Rouse said Benistar mentions “a red herring premise,” which is the U.S. Centers for Medicare and Medicaid Services’ suspension of one of United’s sister entities.
“The referenced company, however, is not the United that was awarded this contract,” he wrote in his letter to Eshelman. “Additionally, the suspension does not impact 2023 enrollment.”
United is a five-star vendor providing group Medicare Advantage with prescription drug coverage and that’s the highest a vendor can get from the U.S. Centers for Medicare and Medicare Services, Rouse said.
The state’s Employee Benefits Division was a good steward of the public’s resources by contracting with a five-star vendor that received excellent technical scores and provided the lowest cost proposal, he said.
Rouse also serves as secretary of the state Department of Transformation and Shared Services.
On Friday, he succeeded former secretary Amy Fecher, who is now the executive director of the Arkansas Public Employees Retirement System. Gov. Asa Hutchinson appointed Rouse to the post.