By Jamey Dunn
Some lawmakers voiced their frustration today that Health Alliance did not make the cut to offer health care plans to some state retirees, even though the provider claims it could have given a lower price than the vendors chosen.
The Commission on Government Forecasting and Accountability took testimony today on the process used to pick the providers for Medicare Advantage plans for retirees. Health Alliance Medical Plans did not meet the requirements to provide a Medicaid Advantage HMO plan. But the company says it could have offered a statewide HMO for less than UnitedHealthcare Group PPO, Humana Benefit Plan HMO, Humana Health Plan HMO, and Coventry Advantra HMO, which were the winning bidders.
Currently, retirees are generally enrolled in Medicare with state coverage as a supplement. But under the change, retires must now pick a Medicare Advantage plan or lose their state coverage. The open enrollment period to choose a plan starts on November 12 and runs through December 13. New plans will go into effect on February 1, and according to Central Management Services, retirees who have not made the change to an advantage plan by that date will lose their state coverage. Eligible retirees will receive information in the mail. The change does not apply to retirees who have a spouse or dependent on their plan who is not Medicare-eligible. “That family unit stays in the plan they are currently in. We are not splitting families,” said Janice Bonneville, CMS deputy director of benefits. Retirees who want to keep traditional Medicare can do so, but they would lose their state coverage. CMS estimates that the change will save the state more than $250 million over two years.
Bonneville told the committee today that CMS was not aware that Health Alliance could have provided coverage that would have cost the state even less. Once it was determined that the company’s bid did not fulfill the requirements set for the contract, CMS did not look at the other aspects of it. “We don’t evaluate disqualified bids,” said Matt Brown, chief procurement officer for the state. Health Alliance did not meet requirement for having administered larger Medicare Advantage systems.
But some committee members said they suspected the requirements were intended to exclude Health Alliance, which sued the state after it lost its bid to continue to provide insurance coverage to state workers but then dropped the suit after it was allowed to submit a second bid. Health Alliance covers public employees primarily in the Champaign and Springfield areas. “You’ve got a process that knocks them out before you even score them. ... And at the end of the day, the taxpayers have a right to those savings,” said Mahomet Republican Sen. Chapin Rose. “You have a process that from the beginning looks like it was set up to exclude a company from bidding.”
Catlin Republican Rep. Chad Hays agreed with Rose’s take on the situation. “There seems to be a pattern of behavior that tries to exclude this company.” Many state retirees in Rose’s district and Hays’ district receive their medical treatment from the Carle health care system and have been covered by Health Alliance. Carle has an exclusive Medicare Advantage agreement with Health Alliance. However, the other plans that would be offered in east-central Illinois would reimburse Carle for services at the Medicare rate. Rose said that he has gotten reassurances from Carle that they will not demand that patients pay any out-of-network costs upfront.
Not all the critics were willing to go as far as calling it a conspiracy theory, but some said that CMS should have looked at the whole picture of the Health Alliance bid. “We’re talking about Health Alliance as if they’re some mom and pop shop that just got into health care,” said Sen. David Koehler, a Peoria Democrat.
Sen. Michael Frerichs, a co-chair of COGFA, said that he realizes that CMS must follow procurement law and make sure vendors are capable of provide the service they are bidding for. But he says the state should make sure that it is not setting “arbitrary minimum requirements that reduce the amount of competition and increase prices.”
Frerichs also represents retirees who obtain their care at Carle. “[The witnesses] said today that they will still have access to their health care providers. They won’t have the same insurance company, but they’ll still have access to their providers, and it won’t necessarily cost them any more money,” Frerichs said. "If that’s the case, my constituents should be OK. However, all those constituents are also taxpayers, and everyone in the state should have a problem if we are leaving savings on the table.”
Frerichs said he thinks CMS possibly should reconsider the decision because the contracts with the advantage plan providers have not been signed at this point. “If you’re looking at somewhere in the magnitude of 50-some-million dollars in savings. ... $50 million is an awful lot to leave out there.”
However, he said that retirees should go ahead and pick a Medicare Advantage plan from the current offerings. “I don’t anyone to wait until the list minute miss any deadlines and then not have access to care.” He said that if any changes were made down the road, retirees would likely have the option to rethink what plans they want.
At the same time, CMS is working to verify that retirees’ dependents are eligible for health care coverage. Bonneville said that 10,000 verification letters were sent out before the end of September. But CMS recently sent out letters to 44,000 retirees and has gotten some negative reaction from retires who are uncertain about what information they must provide. Bonneville said that the larger group has caused “ a little more noise.”
Retired teacher Beverly Johns told the committee that the combination of the verification letters and the switch to Medicare advantage plans has left many retirees uncertain and scared. “Confusing misinformation and fear run rampant among my colleagues.” She said when her verification letter came from an out of state vendor, she contacted Attorney General Lisa Madigan because she was concerned that it might be a scam. “If people got the information and thought it was a scam, they may not have completed it; therefore they lose their dependents' health insurance.”
Bonneville said retirees should look to the Frequently Asked Questions section of the information they receive along with their letters for examples of what documents they must provide the state to prove their dependents are eligible. For more on the dependent verification process, see CMS’ website.