Molina’s Med­i­caid con­tract chal­lenge de­nied by judge

Rul­ing means more than 200,000 Med­i­caid re­cip­i­ents must switch to new provider

The Taos News - - VALLE VISTA - By Thom Cole [email protected]­i­can.com

A judge on Nov. 21 re­jected a chal­lenge by Molina Health­care of New Mex­ico to the loss of its state con­tract to pro­vide man­aged care to Med­i­caid re­cip­i­ents.

The rul­ing means that, bar­ring some 11th-hour court ac­tion to halt the process, more than 200,000 Med­i­caid re­cip­i­ents now served by Molina will have to switch to an­other health care com­pany Jan. 1.

The de­ci­sion by state District Judge David Thom­son in Santa Fe also means the po­ten­tial for bil­lions of dol­lars in lost rev­enues for Molina and raises ques­tions about the com­pany’s fu­ture in New Mex­ico.

Molina said it will ap­peal the rul­ing.

“We re­main con­cerned about our mem­bers’ ac­cess to and con­ti­nu­ity of care, par­tic­u­larly with re­gard to our most vul­ner­a­ble high-risk mem­bers,” the com­pany said in a writ­ten state­ment is­sued through a spokes­woman.

State con­tracts to pro­vide man­aged care to Med­i­caid re­cip­i­ents are worth bil­lions of dol­lars. In a re­flec­tion of what was at stake in Molina’s case, more than a dozen at­tor­neys for the state, Molina and other in­ter­ested par­ties at­tended Thom­son’s an­nounce­ment of his de­ci­sion.

Nearly 830,000 New Mex­i­cans are en­rolled in the gov­ern­ment-funded health care pro­gram for low-in­come peo­ple and the dis­abled. Molina serves more than 206,000.

Molina’s New Mex­ico in­sur­ance pre­mium rev­enues, in­clud­ing Med­i­caid pay­ments, to­taled $1.3 bil­lion in 2016, ac­cord­ing to cor­po­rate fil­ings.

Molina pre­vi­ously said the loss of the Med­i­caid con­tract would im­peril its com­mit­ment to New Mex­ico and its health care sys­tem in the state.

Molina also pro­vides health care cov­er­age to New Mex­i­cans out­side of the Med­i­caid pro­gram, in­clud­ing en­rollees through the state’s health in­sur­ance ex­change and Medi­care re­cip­i­ents.

The state Hu­man Ser­vices De­part­ment an­nounced in Jan­uary that it had se­lected Pres­by­te­rian Health Plan, Blue Cross Blue Shield of New Mex­ico and Western Sky Com­mu­nity Care to pro­vide Med­i­caid man­aged care be­gin­ning in 2019.

Pres­by­te­rian and Blue Cross cur­rently pro­vide Med­i­caid man­aged care, but Western Sky will be a new provider. Med­i­caid re­cip­i­ents who re­ceive man­aged care will choose among the com­pa­nies.

Molina, which is in the fi­nal year of a con­tract to pro­vide man­aged care to Med­i­caid re­cip­i­ents, was one of five los­ing bid­ders for the new con­tracts.

In re­ject­ing Molina’s chal­lenge to the con­tract­ing process, Thom­son ruled the Hu­man Ser­vices De­part­ment didn’t vi­o­late pur­chas­ing laws or reg­u­la­tions in deny­ing Molina a new Med­i­caid con­tract.

Thom­son said he wouldn’t sec­ond-guess the Hu­man Ser­vices De­part­ment em­ploy­ees who eval­u­ated and graded the Med­i­caid con­tract pro­pos­als from Molina and the other com­pa­nies.

“The court will not sub­sti­tute its judg­ment for HSD’s,” he said.

The Hu­man Ser­vices De­part­ment has said the Med­i­caid con­tract­ing process was fair and in the best in­ter­est of New Mex­i­cans.

In a writ­ten state­ment af­ter Thom­son’s rul­ing, a de­part­ment spokes­woman said the agency is ready to move for­ward to the change in the lineup of Med­i­caid man­aged care providers.

Molina had al­leged a laun­dry list of le­gal er­rors by the Hu­man Ser­vices De­part­ment in de­cid­ing which com­pa­nies would re­ceive the new Med­i­caid con­tracts.

Among the ar­gu­ments re­jected by Thom­son: that the de­part­ment im­prop­erly scored Molina’s pro­posal, used pay­ment rates that weren’t fi­nan­cially sound and em­ployed bid-eval­u­a­tion cri­te­ria that weren’t dis­closed be­fore­hand.

Thom­son said the is­sue raised by Molina that was most con­cern­ing to him was an al­le­ga­tion the con­tract­ing process was tainted by a pos­si­ble con­flict of in­ter­est. A con­sul­tant to the Hu­man Ser­vices De­part­ment on the pro­cure­ment has busi­ness ties to a sis­ter com­pany of win­ning bid­der Western Sky.

Thom­son said he found no ev­i­dence that the busi­ness re­la­tion­ship af­fected the con­tract­ing process. Hu­man Ser­vices De­part­ment em­ploy­ees eval­u­ated the con­tract pro­pos­als, and the con­sul­tant had no au­thor­ity in that eval­u­a­tion process, the judge said.

Molina pre­vi­ously said the loss of the Med­i­caid con­tract would im­peril its com­mit­ment to New Mex­ico and its health care sys­tem in the state.

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