The company suggests that the director of Ohio Medicaid acted inappropriately. It happened before

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A company that has been ignored for part of the largest set of contracts ever by the state of Ohio hinted in court on Wednesday that Ohio Medicaid Director Maureen Corcoran may have acted inappropriately .

Kirsten R. Fraser, lawyer for managed care provider Paramount Advantage, asked a Medicaid official if Corcoran or any of his subordinates contacted any of the bidders about the gigantic contracts during the “blackout period.” . This is when the rules state that there should be no communication between bidders and the officials evaluating them.

Medicaid official, Deputy Director Patrick Beatty, said he was not aware of any of these communications.

It is possible, of course, that Fraser was just fishing. But it is a fact that when Corcoran was a senior official at another state agency, his communications with a bidder on a major managed care contract were deemed so inappropriate that a federal judge rescinded the contract and appointed a comptroller. special.

Asked about Wednesday’s exchange, Medicaid spokeswoman Lisa Lawless said in an email, “The comments from staff (from the Ohio Department of Medicaid) at the trial speak for themselves. We have no further comments.

Paramount, a subsidiary of Toledo-based ProMedica, is suing the Medicaid department for being the victim of a skewed process when it was not chosen in April to be one of six companies to handle care for them. Ohio Medicaid clients under the age of five. -year, $ 22 billion deal.

Despite his long service to the program, Paramount said, the Medicaid department has tilted the process against him and in favor of giant out-of-state companies.

During testimonies, it was revealed that evaluators viewed Paramount only operating in Ohio as a weakness. In addition, none of the Medicaid officials who testified could say whether Mercer, the consultant who facilitated the procurement, had one of the successful bidders among his clients.

Successful bidders include Centene, a company that Attorney General Dave Yost accused in March of scamming Ohio taxpayers to the tune of tens of millions of dollars. Centene is paying $ 88 million – and $ 1 billion more to other states – to settle these claims.

Companies owned by UnitedHealth Group and CVS Health, whose pharmacy intermediaries have been accused of scamming Ohio taxpayers for years, have also been hired as part of the major overhaul. A lawsuit by Yost against UnitedHealth’s OptumRx continues.

For their part, Medicaid officials, in two days of testimony this week, said they are undertaking a fundamental overhaul of the state’s Medicaid managed care program, which they say has performed poorly compared to other states. Officials said Paramount’s proposal was inadequate because it was mired in the old ways of doing things.

Paramount scored much worse than the companies selected in the assessment of proposals by officials.

When interviewing Ohio Medicaid officials, Fraser pointed out that they disclosed whether they held shares in any companies interested in the procurement, while Corcoran, who had the final decision, apparently did not. not done.

Disclosures made under a separate and less strict law indicate that as recently as last year Corcoran owned shares in three companies that were awarded $ 1 billion contracts as part of this year’s purchases. . But Corcoran won’t say whether she filed affidavits disclosing her holdings when she signed the contracts – even though such affidavits appear to be required by law.

This isn’t Corcoran’s first legal battle over a high-profile government contract.

In late 1996, when she was deputy director of the Ohio Department of Mental Health, her agency and the Ohio Department of Addiction Services issued a request for proposals. They were looking for a private company that would join a network of external behavioral service providers, transfer services offered by government agencies to those providers, and then see that they were paid.

The process would have been analogous to what Medicaid managed care companies like Paramount do: register provider networks like doctors and hospitals, enroll clients, coordinate their care, and reconcile provider complaints.

Among the companies that submitted proposals in 1996 for mental health work included Value Behavioral Health and the Ohio Behavioral Health Partnership.

The RFP capped potential profits at $ 1.5 million, which Value Behavioral Health’s proposal did. Despite submitting a proposal that envisioned maximum profits of $ 5.4 million – nearly four times the cap – Ohio Behavioral Health won the business.

In court testimony, Corcoran boss, Department of Mental Health Director Michael Hogan, said he was in favor of the Ohio Behavioral Partnership despite failing to comply with the demands of the appeal. offers. But during the process of drafting the final contract, other officials pointed out the gap.

Less than two hours after the Ohio Behavioral Partnership was informed it had won the contract, Corcoran, whom Hogan put in charge of the process, and others called the company’s president, Ronald I. Dozoretz.

“Corcoran told (Ohio Behavioral Health) president Dr. Dozoretz that the company’s administrative costs were too high,” U.S. District Judge Edmund A Sargus Jr. wrote in a 1997 ruling on the case. “Corcoran told Dozoretz that the administrative fee could not exceed $ 0.95 (per member, per month), representing the specific amount proposed by the requester. The $ 0.95 (per member, per month) administrative fee was also a reduction of $ 3,864,000 from the amount previously submitted by (Ohio Behavioral Health) in its proposal. “

The next day, Dozoretz faxed Corcoran a revised price plan making its maximum profit the same as offered by Value Behavioral Health, the company that sued because it didn’t get the contract.

“No bidder other than (Ohio Behavioral Health) was invited or had the opportunity to modify its bid in response to a request from state agencies,” Sargus wrote. “It was only after receiving the two reviews from (Ohio Behavioral Health) that the defendants then informed the unsuccessful bidders at approximately 4:00 pm on February 4, 1997 that they had not been selected.”

State attorneys attempted to argue that Corcoran’s appeal was OK. Ohio Behavioral Health had already been selected, so the state was free to negotiate the contract on whatever terms it wanted.

Sargus didn’t buy it. He said this argument negates the whole purpose of competitive sourcing.

“In this case, the process was anything but ‘free and open’,” the judge wrote. “The state has specific requirements that all bidders must meet. Prior to being selected as the successful vendor, (Ohio Behavioral Health) failed to meet a critical element of these requirements. It was only after (Ohio Behavioral Health) was selected that it submitted a proposal that met all the essential requirements of the state’s own standards.

Sargus rejected the contract and he was so concerned about the conduct of the state that he appointed a special controller to oversee any future RFPs.


This story was republished from the Ohio Capital Journal under a Creative Commons license.


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