Nebraska names new slate of vendors to handle Medicaid starting in 2024

Posted at 1:01 PM, Sep 24, 2022

OMAHA, Neb. (Nebraska Examiner) — In a process that’s seen more than typical scrutiny, Nebraska administrators on Friday announced their selection of three vendors to handle the state’s Medicaid managed care program starting in 2024.

The services now cost the state nearly $3 billion a year.

For the new five-year period, Nebraska Department of Health and Human Services administrators chose two of the three providers that currently share the contracted services to Medicaid beneficiaries. 

That duo — Nebraska Total Care and United HealthCare of the Midlands — will have a new partner: Molina Healthcare of Nebraska, according to a statement.

HealthyBlue was not reinstated.

Concerns about the past

State officials described the five providers that had submitted bids as excellent contenders for the Medicaid Heritage Health program, which provides physical and behavioral health care, pharmacy and dental services to about 340,000 low-income and disabled Nebraskans.

But of the narrowed choice, DHHS chief executive Dannette Smith said: “We’re excited to work with these three health plans to ensure Medicaid members in Nebraska continue to receive the health care that they need.”

“We believe that having three vendors strikes an appropriate balance between affording our members a choice of health plans and creating a favorable market for potential bidders,” spokesman Jeff Powell said.

While actual contract costs can vary in any given year, Powell said, the department anticipates spending $12 billion to $15 billion over the five-year span of the contract, or $4 billion to $5 billion per plan.

The next five-year contractual period that begins at the start of 2024 provides two-year optional renewals.

DHHS sought requests for proposals in April, and bids were received in July.

Some state senators have expressed concern about the state’s procurement process, saying that administrators should consider superior service and not the lowest cost, which has caused trouble in past state bidding selections.

They point to the multimillion-dollar mistakes over“bad bids” that were approved for services including the state’s Medicaid managed care program and for two computer systems.

In 2019, the state made what would later amount to a $158 million mistake in awarding a contract to oversee the state’s child welfare system to St. Francis Ministries of Kansas. That financially troubled nonprofit’s $197 million bid was later revealed to be markedly low, requiring $158 million more in funding.

‘Listening tour’

State Sen. John Arch of La Vista, chair of the Legislature’s Health and Human Services Committee, said Friday his concern has always been that the state follow a “fair and thorough procurement process.”

“I have been assured by the department that this was their goal as well,” he said.

Arch said DHHS officials are to brief his committee on Nov. 4.

Medicaid Director Kevin Bagley said he was “extremely pleased” with all bids. “Ultimately, while we had to choose three, all five bids were impressive and showed high regard for the Medicaid program and Nebraska.”

In the past, losing bidders have appealed the state’s selections.

In the latest process, bidders were scored based on quality, appropriateness and thoroughness, a news release said. Stakeholder input also was sought. DHHS interviewed the bidders for more detail.

Administrators said they will work with the selected health plans to transition smoothly. Medicaid officials also are to continue to meet with members of the community across Nebraska about the changes, and said they will adjust the plans as needed.

The next “listening tour” is to be held in mid- to- late October.

Nebraska Examiner is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Cate Folsom for questions: Follow Nebraska Examiner on Facebook and Twitter.

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