Health Alliance didn't meet bid requirement

Health Alliance didn't meet bid requirement

URBANA — Health Alliance Medical Plans failed to meet a technical requirement when it sought a contract to provide Medicare Advantage health coverage for state retirees, a company spokeswoman says.

Insurance vendors seeking state Medicare Advantage contracts needed to show they have at least five years' experience administering Medicare Advantage plans — plus at least three years' experience administering Medicare Advantage plans for at least one employer with a minimum 1,000 participants enrolled.

Also, insurers seeking contracts had to show they have at least one year of experience administering a Medicare Advantage plan for a government employer with a minimum 500 participants.

Health Alliance provided the state its history in the Medicare HMO business dating back to 1997, but didn't provide information meeting the required minimum group members for individual employers.

"There aren't that many employers who have 1,000 retirees providing benefits for that many retirees in our area to meet that requirement," Health Alliance spokeswoman Jane Hayes said.

In its response to the state's request for proposals, Health Alliance provided examples of its active employer groups and said its "combined number of participants across all of Medicare Advantage employer group plans is greater than 1,500 members."

A list of 22 government groups in Health Alliance Medicare Advantage plans showed membership in individual groups ranging from 1 to 73 members.

"We didn't meet the technical requirement," Hayes said in an email. "However, we felt our existing membership, years of experience and high quality clearly demonstrated our ability to administer the (Medicare Advantage) HMO benefits for the state."

The state requested bids for a state-sponsored Medicare plan June 21, with a goal of having contracts in place Oct. 1 and conducting an enrollment period in time for new coverage starting Jan. 1, 2014.

Chosen to be awarded nearly $4.2 billion in contracts over 10 years were Aetna Life Insurance Co., Humana Health Plan, Humana Benefit Plan and United Healthcare, according to the state Department of Central Management Services.

Health Alliance's response also stated the company serves 107 Medicare Advantage employer groups and began enrolling the first members in a Medicare HMO in 1997.

The company also said it has 11 years' experience in Medicare supplement plans, has offered a Medicare PPO plans since 2005 and has had a Medicare stand alone prescription drug plan since 2011.

Carle's exclusive Medicare Advantage contract with Health Alliance for physician services means 6,000 of Health Alliance current 15,000 state retiree members would lose coverage at Carle and need to change doctors, the company said.

Hayes said calls from state retirees have continued to roll in since news about the state contracts was out Wednesday.

"I get comments from our customer representatives, our customer service director, about how difficult it is not to be able to give the retirees the answer they need because we don't know what's going to happening next," she said. "The retirees are very frustrated."

Health Alliance had seven days to protest the contract awards, and is still weighing its options, Hayes said Thursday.

State Sen. Michael Frerichs, D-Champaign, said he is working with CMS to get more information on the state contracts, and the Commission on Government Forecasting and Accountability he co-chairs is in the process of scheduling a hearing "to bring more light to the process."


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BlahBlahBlah2013 wrote on October 04, 2013 at 9:10 am

"Carle's exclusive Medicare Advantage contract with Health Alliance for physician services means 6,000 of Health Alliance current 15,000 state retiree members would lose coverage at Carle and need to change doctors, the company said."

Let me reiterate for those who don't understand: It is Carle's decision to have an exclusive relationship with Health Alliance. Carle has chosen to intentionally limit the options of local members by only contracting with a company they own, Health Alliance. If Carle really cared about the local residents they would open their doors to other insurers. Of course you won't hear this in the press.

Mrs. Hayes and Mr. Ingrum like to play the blame game but in reality their parent company, Carle, has the power to make this transition virtually seamless. Of couurse they don't want you to know that.


the world lacks common sense wrote on October 04, 2013 at 11:10 am

Actually, to correct your incorrect comment, Carle is not "exclusive" with only Health Alliance. Carle is contracted with 25 different insurance companies. My suggestion would be to learn the facts before casting blame onto Carle. I am so tired of this community always complaining about Carle. I am sure, God forbid, you or your family need a level 1 trauma center you will be grateful Carle is here. Medical care is expensive. This is not a new concept. It is expensive everywhere. Like any other medical facility in this country, there are certain insurance companies that have direct contracts with Carle and some that dont. Carle is no different. And lets not forget, Carle is not your only option. If you are that unhappy maybe you should switch to Presence and Christie. Is Carle perfect? No. Is any medical facility or business perfect? Again no. Here is another novel idea, if you have a question or concern about your insurance you should call your insurance company, not Carle. Carle is NOT an insurance company contrary to popular belief. Carle does not have all the answers to every patients indivisual insurance policy. Take some responsibility and learn.

BlahBlahBlah2013 wrote on October 04, 2013 at 1:10 pm

Yes, "the world lacks common sense", Carle does have contracts with other insurance companies. But, they give preferential treatment to Health Alliance. For example, Carle has "exclusive" contracts for Medicare Advantage with Health Alliance. Exclusive means 1...not 25. And while Carle is not an insurance company, they own one: Health Alliance. 

I still believe Carle is an asset to this area. It's a regional facility and a level 1 trauma center. Both my kids were born there, both my grandparents died there. I have nothing but great things to say about the staff there, especially the nurses and most of the doctors. However, I do have a big issue with limiting competetion in the area or anywhere for that matter and to say Carle doesn't limit competition is being naive and blind. I also have a big problem with any company using the media to distort the truth to an audience that doesn't really understand a very complex business. Health Alliance is guilty of that, without a doubt. 

Lostinspace wrote on October 04, 2013 at 12:10 pm

And no one at CMS pointed out this obvious oversight before making a decision?

BlahBlahBlah2013 wrote on October 04, 2013 at 2:10 pm

The Sandbox

A Short Story

Many years ago a child lived with his dad in a medium sized college town in central Illinois. Now this child, we'll call him Hampy, wasn't an inherently bad child, but he was very small for his age and grade. Because of this his father, Carl, a very authoratative and demanding father, thought it best to limit his dear son's exposure to other children, especially those bigger and more threatening. One Fall day, while playing in the sandbox at the park, Hampy was joined by some other bigger kids who started playing with the toys. Now little Hampy was none to happy about this and went crying to his father, Carl. "Dad! These other kids are playing with "my" toys in "my" sandbox!!" From that day forward, Carl did his best to protect his little boy from the other kids. He did not want to ever see Hampy so upset. 

Many years later, after Carl had passed  away, Hampy found that he couldn't function in the real world. At his job he couldn't grasp the concept of competition. He was so accustomed to being protected that he didn't posses the skills necessary to succeed in the rough and tumble real world. He was often "perplexed" and frustrated. Hampy swore that he would never do this to his own kids and they would be exposed to real competition to prepare them for the real world. No sheltering. No special protection. 

The moral of the story: Competition is good. Sheltering is bad, for you and the other kids in the sandbox. 

sweet caroline wrote on October 04, 2013 at 3:10 pm

This is a great analogy, Blah!  You should write this as a letter to the editor.  It's humorous, yet sensible!