One of the losing bidders for the contracts to handle Oklahoma’s Medicaid program has filed a protest to challenge the state’s decision, claiming the bid process was flawed and unfair.

Aetna Better Health of Oklahoma Inc., a subsidiary of Aetna Better Health Inc., filed a 51-page protest of the bidding process on Feb. 12. The state on Jan. 29 awarded contracts to four private health insurance companies to manage much of the state’s Medicaid program: Humana Healthy Horizons; United Healthcare; Blue Cross and Blue Shield of Oklahoma; and Oklahoma Complete Health, which is a subsidiary of Centene. 

The four companies, which will start managing the program in October, represent some of the nation’s largest health insurance organizations. 

The Oklahoma Health Care Authority will spend up to $2.2 billion to partially privatize Medicaid through what’s known as a managed care model. Up to 75 percent of the state’s Medicaid enrollees will be managed by for-profit companies. 

Seven companies competed for the contracts. 

The protest from Aetna Better Health of Oklahoma claims the Oklahoma Health Care Authority was unfair in its evaluations of proposals and its scoring system was “fatally flawed.” The protest includes dozens of pages of exhibits, including evaluators’ summaries on companies’ proposals and emails to evaluators regarding the review process. Aetna claims the documents show the process was improper. 

For example, a Dec. 15 email from a consultant working on behalf of the state told members of the team tasked with evaluating proposals to not “be overwhelmed by the sheer size” of bidder’s responses, which sometimes went beyond 5,000 pages. 

“Much of this is supporting documentation you do NOT have to review,” the email said. 

Aetna’s protest claims those supporting documents included information vital to the company’s proposal. Some of the criticism from evaluators indicates the documents weren’t reviewed, the protest says.

“It is unfair and completely inappropriate in a competitive bidding situation to demand information from the bidders, permit such information to be included in attachments and supporting documentation, and then instruct evaluators not to consider such attachments and supporting documentations when scoring proposals and deciding how to award the contract,” it says.

The state rushed to complete the award process and there wasn’t enough time to properly review proposals, the protest argues. 

The Oklahoma Health Care Authority released a solicitation for proposals for the managed care programs on Oct. 15. The window for proposals closed on Dec. 15, and the winning companies were announced on Jan. 29. 

The Health Care Authority assigned 11 employees to serve on an evaluation committee but their findings were not presented to the agency’s board, according to the protest. They were instead shared with its CEO, Kevin Corbett. Aetna argued the managed care contracts were not presented to the Oklahoma Health Care Authority Board for approval and only the board had authority to award contracts.

Aetna’s protest also argues the agency violated the state’s Open Records Act and Open Meetings Act by failing to disclose how evaluators scored the bids.

Oklahoma Health Care Authority officials declined to comment until the protest process is complete. The agency has not yet entered a response to Aetna’s protest. 

The protest comes as a large group of state medical organizations and several lawmakers from both sides of the aisle have come out against the managed care plan. Opponents are concerned the program was designed hastily, that it will reduce health access for low-income Oklahomans instead of improving it, that it will drive down provider participation in Medicaid and that the contracts faced no legislative oversight.

Supporters, including officials within the Oklahoma Health Care Authority, argue that the policy protects the state from financial risk. For example, when demand for services increases because of a pandemic or a financial downturn, the onus would be on the private companies to adjust to new costs, removing the burden from state coffers.

Managed care will change how Medicaid funding works. Right now, the Oklahoma Health Care Authority manages the program and pays providers directly, using a fee-for-service model. Under managed care, the state will pay for-profit companies to coordinate enrollees’ care, paying those companies a set monthly fee per enrollee.  

The Oklahoma State Medical Association, along with four other health groups, filed a lawsuit earlier this month seeking an injunction from the Oklahoma Supreme Court to temporarily halt the governor’s plan to partially privatize the state’s Medicaid program. 

The coalition alleges the state Legislature has been left out of the process and that the Oklahoma Health Care Authority doesn’t have the authority to enter into the contracts with the managed care companies without input from the Legislature. 

“The fact remains that Oklahoma’s Legislature has not passed the appropriate legislation or funding to move managed care forward,” said Dr. Pete Aran, chair of the OSMA board of directors. “We believe it is premature to move ahead with these contracts until the legislative process is completed.”