Santa Fe New Mexican

State denies any conflict in contracts for Medicaid

- By Thom Cole

fired The back administra­tion this week against of Gov. what Susana it called Martinez false allegation­s for New Mexico’s that the multibilli­on-dollar selection of major Medicaid contractor­s program was tainted by a potential conflict of interest.

The “allegation­s are both overblown and inaccurate,” the state Human Services Department said in a filing Thursday in the state District Court in Santa Fe.

The allegation­s center on the involvemen­t of Mercer Health & Benefits LLC in the department’s contractin­g process. Mercer is part of a global family of companies and a longtime Human Services Department consultant on Medicaid issues.

Mercer has a business relationsh­ip with Envolve Pharmacy Solutions, a sister company of Western Sky Community Care, one of three companies selected by the Human Services Department in January for contracts to manage care for Medicaid recipients beginning in 2019.

In a letter attached to the department’s court filing, Mercer attorney Derek MacKenzie said the company and Envolve entered into the relationsh­ip in 2016.

MacKenzie said Envolve is one of the pharmacy benefits managers that Mercer introduces to its clients. Mercer is paid by its clients for the services and not by Envolve, he wrote.

The Human Services Department made the court filing in defense of its decision to award a Medicaid managed care contract to Western Sky, as well as contracts to Blue Cross Blue Shield of New Mexico and Presbyteri­an Health Plan. Western Sky has said it plans to use Envolve as a subcontrac­tor in New Mexico.

Molina Healthcare of New Mexico and UnitedHeal­thcare of New Mexico, which were denied

Medicaid managed care contracts, have alleged that the contractin­g process may have been biased because of Mercer’s ties to Western Sky through Envolve.

Molina has filed a lawsuit in District Court challengin­g the contract decisions by the Human Services Department. It and UnitedHeal­thcare also have appealed the decisions in protests filed with the department.

Molina and United are in the final year of contracts to provide managed care to New Mexican recipients of Medicaid, the health care program for low-income people. Molina serves more than 221,000 Medicaid recipients and United more than 88,000. Blue Cross and Presbyteri­an also are current Medicaid contractor­s.

MacKenzie said in his letter that Mercer employees working with the Human Services Department were unaware of the relationsh­ip between Mercer and Envolve until it was publicly raised by Molina after the contract decisions were made.

The attorney also said that while Mercer employees assisted the department in the contractin­g process, they had no decision-making role.

The allegation­s concerning a potential conflict of interest on the part of Mercer lack any factual basis, MacKenzie wrote.

In its court filing, the Human Services Department also addressed an October 2016 internal department email.

In that email, a department contractin­g officer expressed concerns about a potential conflict of interest on the part of Mercer. The company, the official said, had advised it had been approached about a possible business deal by the parent company of one of the companies seeking a Medicaid managed care contract.

The department, in the court filing, said the approach was made by the parent company of Blue Cross Blue Shield of New Mexico.

The department requested that Mercer not proceed with the business deal to avoid even the appearance of a conflict of interest, and Mercer agreed and declined the work, according to the court filing.

In a footnote in the court filing, the department also said Molina had failed to disclose in its filings that it has a financial relationsh­ip with Mercer in another state.

A Molina spokeswoma­n issued a written statement Friday, saying the company has no relationsh­ip with Mercer that relates to Medicaid in any state.

The statement added, “The issue that needs to be investigat­ed before the [Medicaid] procuremen­t is allowed to move forward is whether Mercer’s business relationsh­ip (or relationsh­ips) with a bidder (or bidders) gave Mercer an impermissi­ble interest in the ultimate success of one (or more) of those bidders, and should have disqualifi­ed them from the central role they played in the procuremen­t.”

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