Judge in Louisiana Won’t Stop State Health Insurance Contracts

September 16, 2011

A Baton Rouge, La., judge has refused to block the state from signing contracts with three private insurance companies chosen to take part in Louisiana’s new health-care delivery system for the poor. In a separate action, a different judge ordered that the companies’ proposals to the state be made public.

The Advocate reports Judge William Morvant rejected arguments from an attorney for Aetna Better Health Inc. — which failed to get some of the business — that Aetna will be irreparably harmed if the state is allowed to move forward with the three winning proposals.

Those companies are Louisiana Healthcare Connections Inc., AmeriHealth Mercy of Louisiana Inc. and AmeriGroup Louisiana Inc.

On a related legal front, state District Judge Todd Hernandez ruled that the winning proposals submitted by Louisiana Healthcare Connections, AmeriGroup and United Healthcare of Louisiana Inc. must be released to the public.

Those companies filed separate lawsuits against DHH to block the release of their proposals, claiming the documents contain trade secrets and proprietary information.

Steve Russo, general counsel for the state Department of Health and Hospitals, represented DHH at the court hearing in front of Morvant and said afterward that the contracts could be signed soon.

The Jindal administration plans on rolling out the program in January.

Russo called Morvant’s ruling from the bench a victory for the roughly 800,000 Medicaid recipients in Louisiana who will have their health care managed pursuant to the contracts.

‘I think you will see access improve. You will see quality unbelievably improve,’ he said.

Aetna spokesman Matt Wiggin released a statement in which the company said it is evaluating its options and will make a decision shortly on how to proceed.

‘We are disappointed in today’s decision and continue to have concerns with the manner in which the Medicaid contracts were awarded,’ the statement read. ‘We believe that there were errors in the procurement process and in the scoring of the awards.’

Aetna claims the awards should be thrown out because DHH did not use the proper procedure to solicit proposals.

In the related public records suit, Hernandez held a hearing last month and ruled Tuesday that the information does not fall within the exceptions contained in the Louisiana Public Records Act or state Constitution.

‘This entire process is to provide services to Louisiana’s Medicaid recipients in an improved process at a savings to Louisiana citizens. It was all performed in a competitive process, and to limit disclosure would limit the scope of that competitive process, thereby undermining its whole purpose,’ the judge wrote.

Attorneys for Louisiana Healthcare Connections, AmeriGroup and United Healthcare plan to ask Hernandez to grant a suspensive appeal, which — if granted — would put his ruling on hold while the companies ask a higher court to review it.

Five companies were tapped in July to participate in the Jindal administration’s venture into privatization of Medicaid service delivery.

Louisiana Healthcare Connections, AmeriHealth Mercy and AmeriGroup Louisiana beat out Aetna and Coventry Health Care of Louisiana for one type of network plan called coordinated-care networks, or CCNs.

CCNs would take over $2.2 billion of the state’s $6.7 billion Medicaid program.

Coventry already has filed a petition for judicial review in the 19th Judicial District Court in Baton Rouge. It has been assigned to Morvant.

United Healthcare and Community Health Solutions of America Inc. outscored Louisiana Physicians Connections for the other type of network plan to be offered.

Aetna filed a protest with DHH on Aug. 8, but it was denied four days later by DHH Secretary Bruce Greenstein. Aetna then filed an appeal with state Commissioner of Administration Paul Rainwater on Aug. 19, but it was denied Sept. 2.

While the second appeal was pending, Aetna filed a petition Sept. 1 in the 19th Judicial District for a temporary restraining order, preliminary injunction and permanent injunction.

State District Judge Janice Clark issued a temporary restraining order Sept. 6, but Morvant dissolved that order and also denied Aetna’s request for a preliminary injunction.

Information from: The Advocate

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