Health Alliance underbid winning providers

Health Alliance underbid winning providers

CHAMPAIGN — Health Alliance Medical Plans underbid all four competitors chosen to provide Medicare Advantage plans for state retirees, the company says.

With a state legislative panel set to meet Wednesday morning to take a closer look at the contract selections, unsuccessful bidder Health Alliance said it learned Tuesday that the four winning bids to provide Medicare Advantage coverage for retirees ranged from 24 percent to 120 percent higher than its own bid.

The state selected UnitedHealthcare Group PPO, Humana Benefit Plan HMO, Humana Health Plan HMO, and Coventry Advantra HMO, but hasn't yet signed contracts with those insurers, Anjali Julka, spokeswoman for the state Department of Central Management Services, said Tuesday.

Health Alliance spokeswoman Jane Hayes said the contract selections are puzzling, "because we're often seen as too expensive."

"Of course, they probably didn't even look at the pricing, because we were thrown out on a technicality that the (state) chief procurement officer could have waived," Hayes said.

The technical requirement Health Alliance didn't meet pertained to experience administering large-member Medicare Advantage contracts.

The state required insurance vendors seeking the Medicare Advantage contracts 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. Bidders also needed to show they had at least one year's experience administering a Medicare Advantage plan for a government employer with at least 500 participants.

Unless the contracts wind up being rebid, though, "we're out," Hayes said.

"We offered a lower bid, statewide coverage, and here we are, no contract," she added.

State Sen. Mike Frerichs, D-Champaign, said he scheduled Wednesday's meeting of the Commission on Government Forecasting and Accountability because so many of his constituents have raised questions, and he wants answers.

"I'm hoping to get greater clarity as to how these contracts were chosen," he said.

There are "way too many unanswered questions," said state Sen. Chapin Rose, R-Mahomet.

Among his questions, Rose said, is why bid requirements were structured the way they were.

"If you are really trying to get the best deal for the taxpayers, why would you structure the bids so certain venders wouldn't qualify?" he asked.

Rose also said a Medicare Advantage PPO that will be available statewide through UnitedHealthcare may be better for retirees who travel or live out of state part of the time, because it would give them coverage out of the area, but he'd like to know if it would be a better deal for the taxpayers to have retirees in an HMO plan.

Still undetermined, too, is how some 6,000 state retirees who receive their care at Carle and have been covered by Health Alliance will fare under the two options available for East Central Illinois — the UnitedHealthcare PPO or Coventry Advantra HMO — as long as Carle continues its exclusive Medicare Advantage arrangement with Health Alliance.

UnitedHealthcare responded to an inquiry about coverage for Medicare Advantage members wishing to continue care at Carle this way:

"Retirees who enroll in the UnitedHealthcare Group Medicare Advantage PPO plan can see any provider that accepts Medicare, without referral or prior authorization, and the member's out-of-pocket cost share is the same regardless of whether the provider is included in the plan's network," United Healthcare spokesman Kevin Shermach said in an email.

"Though they do have the option to refuse to provide care, providers that are not included in UnitedHealthcare's network will be reimbursed at 100 percent of the Medicare-allowable rate for the care they provide to members enrolled in the United Healthcare Group Medicare Advantage PPO plan," he said.

How a 40 percent out-of-network charge will be billed for UnitedHealthcare patients remains unanswered, says Linda Brookhart, executive director of the State Universities Annuitants Association.

The state negotiated a deal that will leave retirees taking the PPO with a net 10 percent out-of-network cost, but will they have to pay the extra 30 percent up front or will providers bill United Healthcare for it, Brookhart wonders.

Carle spokeswoman Jennifer Hendricks said Carle does plan to continue seeing its current state retiree patients, but she can't answer questions about charges.

"Our plan is to continue to see Carle patients, and we don't know about the out-of-pocket differential since we haven't seen the benefit design plan," she said.

Brookhart, who will testify at the COGFA hearing, said she is concerned that enough outreach is being done to clinics and doctors to make sure a burden doesn't fall on the retiree-patients.

She said she will testify about problems she sees going forward — another of which is that some providers have said they won't take the UnitedHealthcare PPO.

"There might be some unintended consequences by doing this, and doing it so quickly," she said.

Open enrollment for state Medicare Advantage plans has been set for Nov. 12 through Dec. 13, with new plans taking effect Feb. 1, 2014, according to CMS.

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BlahBlahBlah2013 wrote on October 23, 2013 at 8:10 am

Translation: "When the RFP guidelines don't benefit us (Health Alliance), we expect them to be changed in our favor. When they do beneift us we expect them to be followed by the letter, no exceptions."

I know corporate PR people can be hard to understand sometimes so I hope that helped clear it all up.

Sid Saltfork wrote on October 23, 2013 at 8:10 am

Central Management Services is the "bag man" for governors.  It does the bids, and picks the winners.  Bill Cellini, serving time now in prison, loved CMS.  Blago loved CMS.  Quinn loves CMS.  CMS is as crooked as a dog's hind leg.  Those of us who earned our healthcare after years of service know CMS.   I used to get tired of the old assumption that all state employees were "connected".   The rank and file state, and university employees, and retirees know that the patronage jobs are in CMS.   The Fix is On.  The State of Illinois' legislators, and governor know full well that "Pay to Play" still exists.  This is just another example of it. 

Both Chapin Rose, and Mike Frerichs are helping those of us who are being defrauded by Quinn, and his beloved CMS.  I thank them for asking the questions, and helping to do the right thing.  

airrecon wrote on October 23, 2013 at 9:10 am


Lostinspace wrote on October 23, 2013 at 2:10 pm

Could someone explain why CMS exists in the first place?

Sid Saltfork wrote on October 24, 2013 at 2:10 pm

They had to create a management agency made up of patronage employees which would pick the vendors, and release the bids.  Things like building leases, asphalt, construction, insurance, printers, computers, paper, toliet paper, soap, janitorial services, land purchases, state vehicles, dead grandma eye pennies, and other assorted things that would generate "campaign donations". 

Lostinspace wrote on October 25, 2013 at 2:10 pm

Thanks.  This confirms my suspicion that it has no real function.  Sort of like university committees, the four or five ladies you have to deal with before you get to a see a doctor, and big box greeters.

BlahBlahBlah2013 wrote on October 29, 2013 at 1:10 pm

"big box greeters". Ha! I think it would be just as welcoming to have a robot standing in their place saying, "Welcome to XXX", or "Thank you for shopping at XXXX". Although I guess it gives the elderly something to do. That's a nice thing. But there's no real value added here.


enoughalready wrote on October 25, 2013 at 8:10 am

United Healthcare owns CGI, the company developing the federal insurance exchanges.  Dots connected.  

cretis16 wrote on October 25, 2013 at 4:10 pm

A little confusing here. If Health Alliance reviewed the requirements of the bid, and noted that they did not meet the requirements...then why did they still place a bid? If the bid process specifically asked for a certain number of members and a certain number of years experience  which Health Alliance did not have.....why did they insist on placing a bid?

Sid Saltfork wrote on October 25, 2013 at 5:10 pm

Six thousand reasons living locally; and your not one of them.

sparky123 wrote on October 25, 2013 at 7:10 pm

I was thinking the same thing.....did they not read the requirements before bidding?

BlahBlahBlah2013 wrote on October 29, 2013 at 1:10 pm

They submitted the bid because they hoped the CPO would 1) make an exception to the very logical criteria put in place for a contract of this size or, 2) If there was no exception made they could cry about it in the press and hope public pressure would overturn the decision (like a couple years ago). Both strategies failed this time around. And rightfully so. If you want to stop bad behavior from a spoiled toddler, you must eventually tell them, "no".