UnitedHealthcare alleges ‘flawed and illegal’ Medicaid procurement process

by | May 10, 2024

UnitedHealthcare has filed a formal protest against the Florida Agency for Health Care Administration, alleging procedural and legal flaws in the procurement process for the Statewide Medicaid Managed Care Program, claiming it was neither transparent nor fair and calling for corrective action or a formal hearing.

UnitedHealthcare has lodged a formal protest against the Florida Agency for Health Care Administration (AHCA), alleging procedural and legal flaws in the procurement process for the Statewide Medicaid Managed Care Program.

The protest, filed on April 26 and shared with The Capitolist, contends that AHCA’s process was neither transparent nor fair, calling for corrective action or a formal hearing to address the concerns.

UnitedHealthcare, a large-scale player in the managed care industry, alleges that AHCA’s procurement process violated multiple statutory requirements and employed arbitrary methods that ultimately skewed the outcome of contract awards. Within the petition document, the company noted that billions of tax dollars and the healthcare of millions of Floridians were at stake.

“This protest arises from one of the most important procurements in Florida’s history. Millions of vulnerable Floridians and tens of billions of tax dollars are at stake,” the petition reads. “Unfortunately, based on Agency procurement records released to date, there were fundamental flaws in the procurement process.”

UnitedHealthcare’s protest is predicated upon the claim that AHCA failed to apply the six mandatory preference factors outlined in Section 409.966(3)(C) of the Florida Statutes, which states that in Medicaid procurement, AHCA “shall select the eligible plans that are determined to be responsive and provide the best value to the state.” UnitedHealthcare contends that there is a lack of evidence or explanation to show that AHCA considered these factors in its award decisions. Documents produced by the negotiation team indicate that these statutory preference factors were weighted lower than other non-statutory criteria, directly violating state law.

“Contrary to Florida law and the solicitation, the negotiation team failed to apply mandatory statutory selection criteria and preferences in making its best-value determination,” UnitedHealthCare claims. “The negotiation team impermissibly used unstated evaluation criteria and recommended awards to Respondents that were nonresponsible and nonresponsive by the express terms.”

UnitedHealthcare additionally argues that AHCA did not implement the mandatory tiered scoring approach for assessing operational functions within the state as required by law. The scoring system mandates that preference points be awarded based on the extent to which health plans perform their operational functions in Florida. The absence of evidence showing that AHCA followed this tiered approach serves as supplement to UnitedHealthcare’s claim of a flawed procurement process.

In addition, the protest noted that the negotiation team was “inadequately trained” and “misunderstood or misapplied” the selection criteria. Transcripts from negotiation sessions reveal confusion among team members about the definition and application of “best value,” a critical criterion for selecting awardees. This confusion, according to UnitedHealthcare, led to inconsistent and arbitrary decision-making.

A significant portion of the protest is dedicated to the use of unstated evaluation criteria by the negotiation team. UnitedHealthcare further alleges that the team considered factors not included in the Invitation to Negotiate (ITN) or Florida statutes, such as administrative expediency and potential future protest risks.

The use of such unstated criteria, the company argues, undermines the integrity of the procurement process and violates principles of fair competition.

“As set forth, the negotiation team did not specifically analyze the best-value factors in the ITN or Florida Statutes. Instead, negotiators built their own bestvalue matrix at the same time they were considering each proposal. Moreover, to the extent the negotiation team may determine the best value selection criteria, the negotiation team did not describe or disclose all of the additional criteria in its Award Recommendation, despite that the recommendation purportedly identified all of the best-value criteria that were considered, making them unstated and impermissible,” the petition contends.

One of the more egregious claims is that the negotiation team violated the ITN by considering respondents’ evaluation scores during the negotiation process. The ITN explicitly prohibits using these scores to determine the best value. Despite this, evidence from negotiation sessions shows that evaluation scores were discussed and utilized, contravening the ITN’s directives.

“While it failed to consider and give preference to the best-value factors that the Legislature mandated, and considered other unstated evaluation criteria that it was not to considerthe negotiation team undisputedly considered something that the ITN expressly prohibited: the respondentsevaluation scores,” the allegation states. “Negotiators repeatedly discussed evaluation scores during their negotiation sessions with respondents, including comparisons of the respondentsscores.”

Furthermore, UnitedHealthcare points out that contracts were awarded to non-responsible respondents, specifically Florida Community Care (FCC) and Community Care Plan (CCP). These respondents did not meet the ITN’s requirement of achieving at least 70 percent of the total available points to be deemed responsible. Awarding contracts to these entities, UnitedHealthcare argues, is contrary to both the ITN and Florida law.

The protest also criticizes AHCA for considering late and non-conforming offers. UnitedHealthcare notes that Simply Healthcare Plans, Sunshine State Health Plan, and FCC submitted proposals that were either incomplete or late. Accepting these submissions, per the petition, provides an unfair advantage and violates procurement principles.

In a particularly pointed accusation, UnitedHealthcare additionally claims AHCA engaged in technical leveling during the Best and Final Offer (BAFO) process. This practice involved disclosing proprietary information from UnitedHealthcare’s proposal to other respondents, allowing them to adjust their proposals to match UnitedHealthcare’s offerings, an action that is both unfair and illegal.

The company also raises concerns about AHCA’s documentation of its decision-making process. The company asserts that the agency failed to provide adequate explanations for its award decisions, as required by Florida statutes, amounting to “arbitrary and capricious conduct.” Compounding this, UnitedHealthcare alleges that AHCA frustrated its protest rights by failing to timely produce the entire procurement file. Despite repeated requests, UnitedHealthcare claims it has not received all relevant documents, hindering its ability to fully challenge the procurement process.

In totality, the protest calls for a halt to the procurement and contracting process until the issues are resolved. The company seeks either corrective action through mutual agreement, including being awarded a contract or a re-procurement of the ITN, or a formal administrative hearing to address the disputed issues.

Inquiries submitted to AHCA by The Capitolist were not responded to.

Last month, AHCA announced that it will award contracts to five healthcare organizations for the Statewide Medicaid Managed Care Program.

The selected firms included Florida Community Care, which will cover Regions A, B, C, D, and I; Humana Medical Plan, and Simply Healthcare Plans, both assigned statewide responsibilities; Community Care Plan, covering Regions E, F, G, H, and I; and Sunshine State Health Plan, also serving a statewide demographic and catering to all three specialized care categories.

The re-procurement process, which involves contracts worth billions of dollars, determines which healthcare providers will manage Medicaid services for the state.


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