Ohio lawmakers join ProMedica in frustration with Medicaid contract

Jun. 5—COLUMBUS — The Ohio Senate has slipped a provision into its vision for the next two-year budget to force the state to scuttle April's awards of six Medicaid managed-care contracts and redo the selection process after Paramount Advantage, ProMedica's insurance subsidiary, was shut out.

The Senate said it made the move out of its frustration at being unable to get answers from Gov. Mike DeWine's administration about the scoring process.

"We have to do something," Senate President Matt Huffman (R., Lima) said. "We can't simply accept that we're not going to get any information."

The provision, part of a broad rewrite of the proposed $74 billion, two-year budget, would require the Department of Medicaid to conduct another selection process in the next fiscal year that starts July 1.

This time there would be preference given to companies located in Ohio and already doing the job. The department must also take into consideration the number of jobs affected and other economic impacts from such a decision as well as whether a company already has a proven track record when it comes to quality and customer satisfaction.

At the least, such a company must be retained for the regions of the state they already serve.

"These are Ohio jobs," Mr. Huffman said. "Just because they are Ohio companies doesn't mean we are going to or should award them a contract or something like that, but certainly there should be special preference as we do in many other situations."

The contract awards were the culmination of a reworking of the state's $20 billion managed-care program serving some 3 million lower-income adults and children.

Paramount Advantage has appealed the decision of the department not to award it a contract for the northwest and northeast Ohio regions effective on Jan. 5, 2022. It has said the move will cost Ohio about 600 jobs and about $81 million a year in economic activity.

The department gave Paramount the second-lowest overall score among the applicants. The company was one of four applicants and the only current provider not selected.

In a lawsuit filed in the Ohio Court of Claims seeking department documents for its appeal, Paramount contends Medicaid had an "implicit negative bias" against the company after it raised concerns in 2019 about "serious flaws" in algorithms used to assign Medicaid recipients to managed-care organizations. The dispute forced a correction in Medicaid billing.

Without mentioning Paramount by name, Mr. Huffman echoed the company's lawsuit in noting that an oral presentation by the company received a score of zero as if it had not given one. How that could happen is one of the questions posed to the administration.

A mediation conference has been set for June 16 in Paramount's public records lawsuit.

In testimony submitted to the Senate Finance Committee last week, Kelsey Bergfeld — director of Advocates for Ohio's Future, a nonprofit, nonpartisan coalition of over 500 state and local health and human service organizations — urged the removal of the language.

"The proposed pause effectively derails the crucial effort to refocus the delivery of Medicaid services to the benefit of the people who need them," she said. "The pause benefits the managed-care plans who provide less value and poorer health benefit to Ohio and replaces a contractual marketplace based on competition and cost efficiency."

Sen. Theresa Gavarone (R., Bowling Green), vice chairman of the Senate Finance Committee, championed the budget language on behalf of a major employer in her district.

"The re-procurement process was critically flawed, and there's no doubt Paramount, which has received high ratings from the Department of Medicaid, should continue to be a Medicaid provider," she said Friday.

She said she will continue to work with the House and the DeWine administration to ensure Paramount remains a Medicaid provider — "just as they have for nearly three decades."

In a statement, Paramount applauded the amendment.

"Out-of-state, for-profit, multi-billion-dollar Fortune 500 companies appear to have been favored over mission-driven, not-for-profit managed-care organizations headquartered in Ohio, including those that have received some of the highest quality scores as Medicaid managed care providers," it said.

"There has been quite a bit of media coverage questioning the ODM decision, and we are encouraged that it appears our state lawmakers understand the importance of the issue and the need to protect Ohio jobs from being lost to out-of-state, for-profit, Fortune 500 companies," it said.

The Senate is expected to vote on the budget next week. A Republican-majority conference committee would then meet to work out a compromise between the Senate and House visions. A final plan must reach Mr. DeWine's desk by the end of this fiscal year on June 30.