* 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.”
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.