Lots at stake as bids are sought for Nebraska Medicaid program, but lawmaker optimistic

Posted at 4:30 PM, Apr 19, 2022
and last updated 2022-04-19 17:30:07-04

The search began Monday for entities that will best deliver health care benefits to hundreds of thousands of Nebraskans served by Medicaid.

And state lawmakers seeking to avoid a costly bidding mistake like the recent one involving the state’s child welfare system contract say the state appears to be on a better track this time.

“There is still a ways to go here,” said State Sen. John Arch of La Vista, chairman of the Legislature’s Health and Human Services Committee. “But I think it is heading in the right direction.”

State Sen. Machaela Cavanaugh of Omaha said lessons have been learned since the state accepted an ultra low bid for child welfare services — and ultimately paid a high price to avoid financial collapse of the St. Francis Ministries operation, which was awarded the Nebraska contract.

Serving low-income and disabled

Cavanaugh said she remains cautious, awaiting permanent procurement process improvements. But she said state senators received assurances from administrators handling Medicaid that a contract would not “automatically” go to the lowest bidder. 

“I don’t, at this point, have reason to think they won’t be diligent,” she said of the Nebraska Department of Health and Human Services and Department of Administrative Services, which handles state contracts. 

Nebraska Medicaid on Monday announced it had started to solicit bids from entities interested in providing health care benefits for at least the next five years to Nebraskans enrolled in Medicaid.

Nearly all state Medicaid beneficiaries currently receive their physical health, behavioral health and prescription drug benefits through Heritage Health, Nebraska’s integrated managed care program. 

The program serves about 340,000 low-income and disabled Nebraskans.

Three big companies — HealthyBlue, United Health Care and Nebraska Total Care — share the current five-year contract that costs the state nearly $3 billion a year.

Listening sessions

The new bidding process comes on the heels of prolonged controversy surrounding the low bid of $197 million by Kansas-based St. Francis in 2019. A year ago, DHHS had to provide another $158 million as a rescue, meaning the state spent more on the five-year contract with St. Francis than the state’s previous contractor had bid.

Arch, who headed the special legislative study on the St. Francis situation, said he was encouraged that DHHS officials spent time more recently on “listening sessions” that gathered feedback about Heritage Health.

Arch said he was heartened that thenew plan will provide dental benefits. Currently, dental services are provided by a separate contract.

Another new feature, DHHS said, will be a common provider credentialing service that responds to a concern voiced by users during the listening sessions.

“They’ve taken some good steps,” said Arch.

Nebraska Medicaid plans to announce the winning bids in August.

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