Something just doesn’t seem right here
Thursday, Oct 24, 2013 - Posted by Rich Miller
* Insurance giant Health Alliance claims it seriously under bid all of its competitors to provide Medicare Advantage for thousands of Downstate public employee retirees…
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.
* We’re talking pretty big money here…
“I think if you’re looking at something in the magnitude of some $50 million in savings — they said they didn’t know but that was one estimate put out by Health Alliance — $50 million is a lot to leave out there.” [said Sen. Mike Frerichs]
* So, why was the company disqualified? State experience requirements…
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.
* The Quinn administration’s decision to disqualify the company, which has provided retiree health insurance for decades, isn’t sitting well with retirees and Downstate legislators…
Rep. Chad Hays, R-Catlin, said that made no sense since Health Alliance already provides regular health insurance to thousands of state workers.
“We are talking about Health Alliance like it’s some mom and pop shop that just got into health care,” Hays said.
Bonneville said Health Alliance asked for a waiver of the requirement, but it was not granted. Frerichs said it may be time to review the state’s procurement laws that establish rules for the state soliciting contracts.
“I really think our procurement policy needs to have a thorough review,” he said. “What I heard is we became slaves to following policy rather than seeking the greatest savings for the state. Clearly, we don’t want any back-room, insider dealings. Our number one goal should be providing the best services at the least cost for the most people.”
* More…
State Sen. Chapin Rose, R-Mahomet, another member of COGFA, said he believed the requirements were a ruse to keep Health Alliance from winning the contract.
“There’s no doubt in my mind they deliberately went out of their way to make sure that Health Alliance could not bid this contract,” Rose said. “Why would you write a requirement knowing that these guys can’t qualify? Then twice they asked to have it waived, and Matt Brown said no.”
State Rep. Chad Hays, R-Catlin, said, “I have people openly asking me, does this reek of a vendetta?”
But Janice Bonneville, deputy director of benefits for CMS, said the requirements were developed “after consultation with Segal Consultants of Chicago” which said the requirements were “lower than what they’ve seen in other states who are bidding these same kinds of products.”
The state tried to dump Health Alliance during the Blagojevich era and that decision wound up being probed by the feds.
- just sayin - Thursday, Oct 24, 13 @ 10:14 am:
You can’t fight City Hall. You may get a reprieve because they are so transparent that there is blowback, but eventually they’ll do it right and they win and you lose.
- New rules - Thursday, Oct 24, 13 @ 10:19 am:
So if your Quinn and you don’t like someone just write the rules in a way that disqualifies them. I guess this fix will work until CMS re-writes the rules again and makes the retirees pay the higher Co-payments.
- OneMan - Thursday, Oct 24, 13 @ 10:22 am:
Seems the ‘experience’ requirement would be somewhat anti-competitive on it’s face and a bit of a catch-22.
- Cassiopeia - Thursday, Oct 24, 13 @ 10:24 am:
It is a long-standing practice in state bids to narrow who can bid by putting in requirements that limit who can bid. Often it is done for good reasons, but far too often it is done to “steer” selection to specific vendors.
- phocion - Thursday, Oct 24, 13 @ 10:26 am:
Watch Matt Brown. Closely.
- Secret Square - Thursday, Oct 24, 13 @ 10:26 am:
Many are asking “Why does the state want to get rid of Health Alliance so badly?” Perhaps the question should be “What company does the state want to replace Health Alliance with, and why?” Is CMS simply looking for more coverage in the Chicago/collar county area and that just means a Downstate provider has to take the hit, or what?
- Past the Rule of 85 - Thursday, Oct 24, 13 @ 10:29 am:
Just think how bad it would be if Quinn had not cleaned house of all the Blago cronies. (Sarcasm intended)
- Leave a Light on George - Thursday, Oct 24, 13 @ 10:32 am:
Unless it affects Madison or St. Clair counties in a bad enough way that they raise a ruckus I don’t think Quinn or anyone else in his administration cares how it plays downstate.
- anon - Thursday, Oct 24, 13 @ 10:39 am:
Why are retirees being forced into a Medicare Advantage plan to begin with. Medicare Advantage plans are not what you want to have in the first place. I would much rather keep the federal medicare coverage with the state policy acting as a supplement than give up the federal coverage for a privatized version. We all know how well something like that works out. Does the normal person realize what is being give up here? the state policy was a supplement once you reach age 65, not providing full coverage to begin with. it only picked up what medicare didn’t pay for. Now I hear on the radio about paying the same co-pay in or out of the network. Well, medicare didn’t have a co-pay to begin with for doctors. It is a usual and customary charge that medicare paid 80% of and the supplement picked up the other part. There is a much bigger problem here than Health Alliance being left out of the choices.
- just wondering - Thursday, Oct 24, 13 @ 10:42 am:
Is it true that 68 counties in Illinois will only have 1 choice of health coverage and that is UHC PPO????? Does that include Vermilion county medicare primary retirees. Has anyone looked at UHC plan’s poor track record and the problems encountered with them.
- A guy... - Thursday, Oct 24, 13 @ 10:43 am:
This might be one of those government solutions that’s meant to help us. (complete snark) At least we know about it. That might be step 1.
- Small Town Liberal - Thursday, Oct 24, 13 @ 10:44 am:
Is anyone in the media or the GA ever going to figure out that the chief procurement officer does not report up to the Governor? That’s the whole point of their position.
- reformer - Thursday, Oct 24, 13 @ 10:45 am:
When Sec. of State Ryan put out a request for bids on the digital DLs during the mid-90s, the specs were so specific — thanks to Larry Warner — that only one company could bid.
- reformer - Thursday, Oct 24, 13 @ 10:45 am:
When Sec. of State Ryan put out a request for bids on the digital DLs during the mid-90s, the specs were so specific — thanks to Larry Warner — that only one company could bid.
- dupage dan - Thursday, Oct 24, 13 @ 10:45 am:
Find out who benefits from this situation and you find out why it is happening.
- so... - Thursday, Oct 24, 13 @ 10:48 am:
Can anyone explain why the state is always trying to get rid of Health Alliance?
- Formerly Known As... - Thursday, Oct 24, 13 @ 10:53 am:
In essence, the state crafted a technical requirement on the bid so narrow that it was specifically designed to knock out a particular bidder.
Do the individuals coordinating this bid process think people are stupid?
- TooManyJens - Thursday, Oct 24, 13 @ 11:03 am:
so…: Because Health Alliance doesn’t have the right connections?
I don’t know, but I’m tired of it.
- retired and fed up - Thursday, Oct 24, 13 @ 11:03 am:
Retirees are being forced into Medicare Advantage because AFSCME negotiated that an Advantage or a Supplement plan be put in place for us as a way for the State to save money. The State choice only advantage plans to offer.
- langhorne - Thursday, Oct 24, 13 @ 11:13 am:
size matters, i guess. but only when you want to exclude one company, and insert a favorite. it would be one thing if the winning bids were lower than HA. but it appears they are not. as some have said, CMS lost sight of the goal — best coverage for the money. HA has a long track record of providing quality coverage, to thousands of state employees and retirees, FOR YEARS. they do a great job serving downstate. more power to chapin rose and any others working to right this fiasco.
- Old and In The Way - Thursday, Oct 24, 13 @ 11:14 am:
Does AFSCME represent retirees? I think not. I know not legally. The question is whether retirees have recourse and choice in the matter. Medicare is a Federal benefit program that most retirees have paid into and I would question the state’s motives on this. Just as in the retiree ‘verification’ program this appears to be more state harassment in an effort to discourage retirees from collecting their contractual benefits. I found it telling when the state asserted under questioning at the ISC hearing that retirees have no recourse and thus no right to question any healthcare insurance decision the state may make. This is just more of the same.
As for CMS, they can’t deliver on contracts for toilet paper and light bulbs! Why would we think this is any different!
- retired and fed up - Thursday, Oct 24, 13 @ 11:14 am:
That should have been the State only chose.
- JoeInPeoria - Thursday, Oct 24, 13 @ 11:17 am:
Health Alliance has been providing coverage downstate for 20+ years. I had their coverage for a few years, and liked them fairly well. At least, compared to others.
When we Central Illinoisans see Health Alliance being cut out by Northern Illinois based companies, we smell a Chicago political rat.
- retired and fed up - Thursday, Oct 24, 13 @ 11:22 am:
There might be a Constitutional equal rights issue since Medicare retirees with non-Medicare dependents get to keep what they have. Who can afford to sue? I can’t. Contrary to popular belief my pension is only meager after 30 year with the State.
- Jechislo - Thursday, Oct 24, 13 @ 11:48 am:
“There might be a Constitutional equal rights issue since Medicare retirees with non-Medicare dependents get to keep what they have. Who can afford to sue?”
How do you figure that? I turn 65 in February and have no choice but to go to Medicare. My spouse is 62 and will remain on Cigna. Are you saying that I also stay on Cigna until my spouse is 65? I thought my spouse stayed on Cigna and I was being forced to the Medicare Advantage coverage?
Is there something I missed?
- DuPage - Thursday, Oct 24, 13 @ 11:48 am:
Being forced to give up Medicare is WRONG. Restricting who and where you can get medical care is wrong. My understanding of this coverage is that it has HMO like characteristics. Over the years, I have known many people that tried HMOs. Their experience was great as long as you didn’t need any medical care. When they got sick, they had to wait sometime weeks to see a doctor. When good medicines are available, they are told to use cheap medicines with bad side effects or even over the counter products. A couple of people (now deceased) had late diagnosis cancer that would have been found earlier if the HMO would have allowed the needed tests/biopsies when pain was first noticed. Any deal forcing anyone into such a situation is wrong.
- retired and fed up - Thursday, Oct 24, 13 @ 11:56 am:
If you are retired State employee and are on Medicare but pay for your spouse’s insurance as a dependent and she is not yet on Medicare you get to keep what you have. Go to CMS Group Insurance site and click on the enrollment link. That’s where the info is.
- Jechislo - Thursday, Oct 24, 13 @ 12:04 pm:
Didn’t know that. That’s great. Wow. If a 65 year-old was married to a 50 year-old, the 65 year-old would be able to have Cigna coverage until they were 80.
- Huggybunny - Thursday, Oct 24, 13 @ 12:10 pm:
Find out who benefits from this situation and you find out why it is happening.
Exactly! COGFA can’t make them reverse the choice, correct? So, what can be done to get to the bottom of it, anything, nothing?
- BMAN - Thursday, Oct 24, 13 @ 12:15 pm:
No snark no sarcasm, as a state worker I believe the decision makers and string pullers can manipulate the system any time they want. What i can’t believe is that it is so hard to prove corruption exists!
- DuPage - Thursday, Oct 24, 13 @ 12:22 pm:
=who can afford to sue?= You hit the nail on the head!
It is very expensive to sue the state. The state or for that matter cities, counties, etc. have the financial advantage. They have large amounts of (taxpayer) money available for lawyers, appeals, and if they are forced to pay something, it is paid with more taxpayer money. (No big deal to them it’s not their money). That is one reason a lot of these decisions are made by these agencies, they can get away with it EXACTLY because “who can afford to sue?”.
- Just Saying... - Thursday, Oct 24, 13 @ 12:43 pm:
It wouldn’t surprise me if the Feds stepped in again. CMS has a history of this type of behavior. It’s going to pretty hard for Matt Brown justifying leaving that kind of money on the table without being totally incompetent or a fixer.
- RNUG - Thursday, Oct 24, 13 @ 12:47 pm:
Having both written and reviewed quite a few RFP’s and RFQ’s over the years, –Cassiopeia– is right. It is very easy to “steer” a bid by setting the specs too narrow. And it may have been done by “higher ups” in government. When I was writing bid specs, I used to get phone calls (no written record there!) all the time from both vendors (who I ignored) and “upper management” (which I immediately documented in email back to them) asking for this or that “tweak” to the specs. I would be willign to bet quite a bit of money something like that happened here …
- RNUG - Thursday, Oct 24, 13 @ 12:49 pm:
just wondering @ 10:42 am:
According to the CMS map and my count, it’s 48 counties …
http://www2.illinois.gov/cms/Employees/benefits/StateEmployee/Documents/Medicare_Advantage_Map.pdf
- RNUG - Thursday, Oct 24, 13 @ 12:52 pm:
According to what I heard, Health Alliance was the only company to submit a Medicare Supplemental bid … which is why the only choices are Advantage programs.
- RNUG - Thursday, Oct 24, 13 @ 1:01 pm:
It’s in the last paragraph of the SJ-R story Rich linked to, but Raymond Poe is filing a bill to again give COGFA authority over retiree health insurance procurement. That was, apparently deliberately, bypassed this time.
- RNUG - Thursday, Oct 24, 13 @ 1:50 pm:
BMAN @ 12:15 pm:
In my experience, the (smart) people attempting to / manipulating the system NEVER put anything in writing. It is always done via phone call or face to face with no witnesses.
I feel sorry for the people who actually write the RFP’s and RFQ’s; they have to try to do an honest job and also follow their bosses orders. It can be a real tightrope act …
- Ahoy! - Thursday, Oct 24, 13 @ 2:14 pm:
–But Janice Bonneville, deputy director of benefits for CMS, said the requirements were developed “after consultation with Segal Consultants of Chicago” which said the requirements were “lower than what they’ve seen in other states who are bidding these same kinds of products.”–
That would be easy to prove then, CMS should list other states requirements and show that we were in line. If they did their research, that list is easily available.
- Nearly Normal - Thursday, Oct 24, 13 @ 2:36 pm:
Those retirees who say they had no idea that the insurance for Medicare recipients would change did get a hint this spring. There was a notice about this in the flyer that was mailed about the premiums for FY14. Here is what it said–
“Medicare Primary Retirees, Annuitants and Survivors–Effective January 1, 2014, Medicare primary retirees, annuitants and survivors (including those who have Medicare primary dependents on their health insurance)may be required to enroll in a state-sponsored Medicare plan. Impacted members will receive a letter in the coming months outlining this change and and their health plan choices.”
I found this on page 2 of the FY2014 Benefit Choice Options flyer for TRIP. Here’s the web address for the TRIP flyer–
http://www2.illinois.gov/cms/Employees/benefits/Teachers/Documents/FY14_TRIP_Flyer.pdf
Found the same language in page 7 of the state employees FY2014 book. Here’s that website–
http://www2.illinois.gov/cms/Employees/benefits/StateEmployee/Documents/FY14_State_BCBook.pdf
Pays to read every page.
- Buster - Thursday, Oct 24, 13 @ 2:57 pm:
RNUG has it on the nose! The specs were written so Health Alliance was excluded. It’s an old technique for steering the contract award process. The losers are not just the retirees happy with their current HA coverage or HA themselves but the tax payers who will pay more for less and bear the long-term consequences in efficiency and performance of a state workforce who the State has decided to wage war on. It’s sad.
- RNUG - Thursday, Oct 24, 13 @ 3:31 pm:
If anyone is in Springfield Friday, according to yesterday’s SJ-R, Janice Bonneville is supposed to be speaking on the health insurance at the Hoggland Center starting at 8 AM. Unfortunately, I can’t make it but maybe Norseman or one of the others here can. Doors are supposed to opne at 7:30 AM
- RNUG - Thursday, Oct 24, 13 @ 8:21 pm:
=who can afford to sue?=
If you feel strongly enough about it, you find a way.
A bunch of the affected retirees can get together and between them they would have the resources to sue. That’s what happened in the Sangamon Country retiree health insurance case that ended up as part of the combined “Maag” case. I happen to personally know one of the plaintiffs and while they have a decent pension, they are far from rich.
- Rahm's Middle Finger - Friday, Oct 25, 13 @ 8:22 am:
This is clearly the work of Matt Brown and the CPO’s office. They are a disaster. The CPO’s creation in SB 51 is one of the worst things to happen to the State in a long time… and that’s saying a lot.
- enoughalready - Friday, Oct 25, 13 @ 8:25 am:
Tribune reported that United Health Care owns CGI, the company developing the federal health insurance exchange web site. This probably explains why they were one of the chosen ones.
- DuPage - Friday, Oct 25, 13 @ 9:33 am:
http://fpfairfax.com/United%20Health%20care.html
This is the company that CMS is forcing retirees to sign up with!