Lujan Grisham intervenes in Medicaid procurement process

By Daniel J. Chacón and Robert Nott, The Santa Fe New Mexican Just as the state Human Services Department was getting ready to announce which insurers had been selected to receive contracts worth billions of dollars to administer its Medicaid program, Gov. Michelle Lujan Grisham stepped in with a last-minute surprise. She ordered a do-over — […]

Lujan Grisham intervenes in Medicaid procurement process

By Daniel J. Chacón and Robert Nott, The Santa Fe New Mexican

Just as the state Human Services Department was getting ready to announce which insurers had been selected to receive contracts worth billions of dollars to administer its Medicaid program, Gov. Michelle Lujan Grisham stepped in with a last-minute surprise.

She ordered a do-over — a move that has sparked questions and criticism from lawmakers on both sides of the aisle amid shifting explanations from the governor’s administration.

“It just smells wrong,” said Sen. Jerry Ortiz y Pino, an Albuquerque Democrat who chairs the Senate Health and Public Affairs Committee.

“The timing of this decision is certainly suspect given the fact that the respondents to the RFP (request for proposals) had already been scored,” Senate Minority Leader Greg Baca of Belen said in a statement. “I fully support the bipartisan calls for the governor to explain this unexpected action.”

Last September, the department issued a request for proposals from health insurance companies to deliver services to the nearly 1 million New Mexicans on Medicaid, a state-managed federal health care program targeted at low-income residents.

In December, a seven-member evaluation committee comprised of bureau chiefs and directors reviewed and scored the five proposals the department received.

At the start of the year, Procurement Manager Charles Canada recommended the department “select/proceed with an intent to award” contracts to four of the five respondents — a recommendation endorsed by the department’s former Medicaid director, Nicole Comeaux, and chief procurement officer, Gary Chavez, according to documents obtained by The New Mexican.

Western Sky Community Care, one of the department’s existing Medicaid providers, didn’t make the cut.

Western Sky is a subsidiary of St. Louis-based Centene Corp., which reached a $13.7 million settlement with the state Attorney General’s Office in 2022. At the time, the AG’s Office said Centene failed to pass on discounts to the state’s Medicaid program, among other things. A separate news release issued by the state Superintendent of Insurance pegged the settlement at more than $17 million to resolve claims the company had violated consumer protection laws in connection with its spread pricing practices.

Centene has paid millions of dollars to settle Medicaid overpayment allegations in other states, according to published reports.

Canada wrote the insurers recommended for “selection/intent to award” — Blue Cross and Blue Shield of New Mexico, UnitedHealthcare, Molina Healthcare of New Mexico, Inc., and Presbyterian Health Plan — earned the highest point totals in the evaluation and offered proposals “deemed most advantageous to the State.”

Lujan Grisham’s communications director, Maddy Hayden, wrote in an email the governor and her staff “shared concerns” with former Human Services Department Secretary David Scrase and acting Secretary Kari Armijo “about the providers’ ability to provide adequate care and continuity of services during a changeover in providers.”

“Following these discussions,” Hayden wrote, “it was decided to cancel the procurement, review the deliverables and issue a new RFP to procure the best services for New Mexicans. This decision was based solely on protecting the best interests of the nearly 1 million New Mexicans covered by Medicaid.”

The Human Services Department initially had said it was scrapping the original RFP so the agency’s new leadership “can assess the design of the procurement” given the looming departures of Scrase and Comeaux, the former Medicaid director.

The decision has come under withering criticism, with House Minority Leader Ryan Lane, R-Aztec, calling for more transparency in the governor’s decision to intervene in the procurement process.

“New Mexicans deserve transparency, and I think that’s the issue right now, is there’s a lot of questions out there,” he said.

“We’re talking about multimillion-dollar corporations that submit responses to these kinds of RFPs,” Lane added. “We’re not talking about mom and pops that aren’t sophisticated, so I think people would typically think that these are well-defined responses and complete responses because of the level of sophistication. That’s why I think we need to have some transparency about why the RFP responses were not accepted.”

Ortiz y Pino indicated the governor had tainted the process.

“It just reinforces to me how critical it is that we not let politics enter into these decisions,” he said. “Keep the Governor’s Office out of it. Let the department do its own work. But no, they always have to get involved.”

Ortiz y Pino noted billions of dollars are at stake.

“This is not an insignificant thing,” he said. “When you factor in the federal money,” it’s about $8 billion to run the state’s Medicaid program.

Ortiz y Pino said the health insurance companies that answered the department’s request for proposals “spent a fortune” developing responses to the state.

“They’ve had to do enormous amounts of work and at the 11th hour — no, 11th hour, 59th minute — cancel them for no good reason given, absolutely no reason given, just we’re going to start all over now. That just does not feel right,” he said. “I don’t have any evidence at all that there’s something nefarious going on, but it just feels wrong.” 

The state’s contracts with its existing providers — Blue Cross and Blue Shield of New Mexico, Presbyterian Health Plan, and Western Sky Community Care — are set to expire at the end of this year.

“With over eighty percent of New Mexico’s Medicaid population receiving care through the managed care delivery system it is essential to select managed care partners that provide access to quality, cost-effective health care — and that can help transform the health care system to deliver measurably improved outcomes to New Mexicans,” Scrase, the former Cabinet secretary, said in a statement at the time.

The state decided to cancel the procurement Jan. 27, the same day the Governor’s Office announced Scrase’s plan to retire, according to the Albuquerque Journal, which first reported the story.

The request for proposals increased accountability for the state’s managed care partners, Comeaux, the state’s former Medicaid director, said in a statement when the department announced it was going out to bid.

“The new contract reflects our intent to require our managed care organizations and their subcontractors to work with providers and community partners to improve access, advance health equity, reduce disparities, and deliver comprehensive quality care that results in positive outcomes for New Mexicans,” she said.

Campaign finance reports filed with the New Mexico Secretary of State’s Office show Western Sky Community Care contributed $10,400 to Lujan Grisham’s campaign on April 4, 2022, during the primary election reporting period. The documents show a refund was issued the same day, though it doesn’t explain why.

At least three other insurers bidding on the Medicaid contracts — Blue Cross and Blue Shield, Molina and UnitedHealthcare — also contributed to the governor’s reelection campaign, documents show. Molina was at the top with $20,800 in donations.

Follow Daniel J. Chacón on Twitter @danieljchacon.

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