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."