HMO dispute all wrapped up
The fight over state employees' health insurance coverage is finally over.
Another bizarre chapter in Illinois government came quietly to a close last week when the state announced it had reached contract agreements with Health Alliance and Coventry Health Care (formerly Personal Care) to provide HMO insurance coverage for state employees and retirees.
Just like that, a nearly two-year controversy came to an end. The agreement calls for a 3.5-year contract (Jan. 1, 2013 to June 30, 2016) with the possibility of five one-year renewals.
That's a possible 8.5-year deal, and it represents a stunning turnaround from the state's 2011 contracts that would have left a good deal of downstate Illinois without any HMO coverage.
The new agreement is the result of the state's decision to seek supplemental requests for proposals to rebid insurance contracts as part of the settlement of a lawsuit filed by Health Alliance.
No doubt, many thousands of East Central Illinois residents are both pleased and relieved by the news. The 3.5-year agreement will cost the state $2.1 billion, with the additional five one-year agreements costing an additional $4 billion. HMO coverage for Coventry will cost $649 million.
Health Alliance lawyer Lori Benso said the two HMO agreements will supplement the previous agreements the state reached with Blue Cross/Blue Shield and Personal Care/Health Link and will cover 96 counties outside Cook and five collar counties.
All's well that ends well, but it's still important to ask, "What happened?" The entire episode makes no sense.
Republican State Rep. Chad Hays of Catlin described the events as a "total and complete fiasco," and that's being charitable.
State officials said the original contracts would have saved taxpayers $1 billion over 10 years. But Health Alliance officials vigorously disputed that number, and a report by Illinois Auditor General William Holland was highly critical of the state's procurement process.
Holland's report outlined what it called "serious deficiencies" that included "disregard for following evaluation procedures."
"We are unable to conclude whether the state's best interests were achieved," Holland's report stated.
State officials dismissed those criticisms as mere "technical issues" then and are not willing to discuss the process now. A spokesman said only the department is happy to have the issue resolved and is looking to the future.
But non-explanations are hardly reassuring. This was an avoidable disaster that created considerable turmoil. It reeks of incompetence.
It's good that things came out OK in the end, but not good enough to justify putting this sorry episode to bed. The Quinn administration needs to provide some answers.