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Health Alliance claims it underbid state's Medicare Advantage picks

CHAMPAIGN (MCT) — Health Alliance Medical Plans underbid all four competitors chosen to provide Medicare Advantage plans for state retirees, the company says.

With a state legislative panel set to meet this morning to take a closer look at the contract selections, unsuccessful bidder Health Alliance said it learned Tuesday that its bid to provide a statewide Medicare Advantage HMO for retirees ranged from 24 percent to 124 percent lower than the four winning bidders.

The state selected UnitedHealthcare Group PPO, Humana Benefit Plan HMO, Humana Health Plan HMO, and Coventry Advantra HMO, but hasn't yet signed contracts with those insurers, Anjali Julka, spokeswoman for the state Department of Central Management Services, said Tuesday.

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.

Unless the contracts wind up being rebid, though, "we're out," Hayes said.

"We offered a lower bid, statewide coverage, and here we are, no contract," she added.
State Sen. Mike Frerichs, D-Champaign, said he scheduled this morning's meeting of the Commission on Government Forecasting and Accountability because so many of his constituents have raised questions, and he wants answers.

"I'm hoping to get greater clarity as to how these contracts were chosen," he said.

There are "way too many unanswered questions," said state Sen. Chapin Rose, R-Mahomet.
Among his questions, Rose said, is why bid requirements were structured the way they were.

"If you are really trying to get the best deal for the taxpayers, why would you structure the bids so certain vendors wouldn't qualify?" he asked.

Rose also said a Medicare Advantage PPO that will be available statewide through UnitedHealthcare may be better for retirees who travel or live out of state part of the time, because it would give them coverage out of the area, but he would like to know if it would be a better deal for the taxpayers to have retirees in an HMO plan.

Still undetermined, too, is how some 6,000 state retirees who receive their care at Carle and have been covered by Health Alliance will fare under the two options available for East Central Illinois _ the UnitedHealthcare PPO or Coventry Advantra HMO _ as long as Carle continues its exclusive Medicare Advantage arrangement with Health Alliance.

UnitedHealthcare responded to an inquiry about coverage for Medicare Advantage members wishing to continue care at Carle this way: "Retirees who enroll in the UnitedHealthcare Group Medicare Advantage PPO plan can see any provider that accepts Medicare, without referral or prior authorization, and the member's out-of-pocket cost share is the same regardless of whether the provider is included in the plan's network," United Healthcare spokesman Kevin Shermach said in an e-mail.

"Though they do have the option to refuse to provide care, providers that are not included in UnitedHealthcare's network will be reimbursed at 100 percent of the Medicare-allowable rate for the care they provide to members enrolled in the United Healthcare Group Medicare Advantage PPO plan," he said.

How a 40 percent out-of-network charge will be billed for UnitedHealthcare patients remains unanswered, says Linda Brookhart, executive director of the State Universities Annuitants Association.

The state negotiated a deal that will leave retirees taking the PPO with a net 10 percent out-of-network cost, but will they have to pay the extra 30 percent up front or will providers bill United Healthcare for it, Brookhart wonders.

Carle spokeswoman Jennifer Hendricks said Carle does plan to continue seeing its current state retiree patients, but she can't answer questions about charges.

"Our plan is to continue to see Carle patients, and we don't know about the out-of-pocket differential since we haven't seen the benefit design plan," she said.

Brookhart, who will testify at the COGFA hearing, said she is concerned that enough outreach is being done to clinics and doctors to make sure a burden doesn't fall on the retiree-patients.

She said she will testify about problems she sees going forward _ another of which is that some providers have said they won't take the UnitedHealthcare PPO.

"There might be some unintended consequences by doing this and doing it so quickly," she said.
Open enrollment for state Medicare Advantage plans has been set for Nov. 12 through Dec. 13, with new plans taking effect Feb. 1, 2014, according to CMS.

(c)2013 The News-Gazette (Champaign, Ill.)
Distributed by MCT Information Services

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