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State draws protest over Medicare deal

Firm takes issue with disqualification by Michael R. Wickline | June 18, 2022 at 3:10 a.m.

Benistar Administrative Services has filed a protest over the state's Employees Benefits Division's award of a state contract to provide group Medicare Advantage with prescription drug coverage to eligible retirees in the state's health insurance plans for public school and state employees to United Healthcare Insurance Co.

Benistar's filing of the protest led the Arkansas Legislative Council on Friday to authorize its co-chairmen to sign off on the proposed contract with United Healthcare after the state's procurement director makes a determination on the protest by June 30 and if the terms of the proposed contract don't change.

On June 3, the state Board of Finance approved the proposed contract with United Healthcare.

Minnesota-based United Healthcare, Connecticut-based Benistar and Kentucky-based Humana Insurance Co. are the three companies that submitted bids for the contract.

The state's procurement director, Mitch Rouse, told the Legislative Council's Employee Benefits Subcommittee on Wednesday that the crux of Benistar's protest is over its disqualification from consideration for the Medicare Advantage contract.

He said Benistar was disqualified because the firm didn't meet the minimum requirements for the Employee Benefits Division's contract to provide Medicare Advantage with prescription drug coverage to eligible retiree in the state's health insurance plans for public school and state employees.

Attorney J. William Eshelman of Washington, D.C., who represents Benistar Administrative Services, said in a letter dated June 10 to the state's procurement coordinator Tanya Freeman that Benistar's offer was improperly rejected for consideration by the state.

Any award to United Healthcare "is, at minimum, as flawed as the State's initial rejection of Benistar's Offer," Eshelman wrote in his letter to Freeman.

He said that the acquisition process employed in the state's solicitation, evaluation and apparent contract award "is no more than an anti-competitive process, which frankly presents itself more as justification for a predetermined outcome than a legitimately competitive process."

Earlier this month, Jake Bleed, director of the state's Employee Benefits Division, told the finance board that the state's Employee Benefits Division plans to contract with United Healthcare to offer Medicare Advantage services to eligible retirees in calendar years 2023, 2024 and 2025, and additional years can be added upon conclusion of the initial three-year term.

There are about 16,000 retirees in the state's health insurance plan for public school employees and about 14,000 retirees in the state's health insurance plan for state employees, he said.

Retirees, who are 65 or older or who are otherwise eligible for Medicare, will be automatically enrolled in the Medicare Advantage program and will be given the opportunity to opt out of Medicare Advantage and retain existing benefits, Bleed said in a memo to the state Board of Finance earlier this month.

The benefits offered under Medicare Advantage will mirror existing benefits, but also offer additional services including coverage for vision, dental and hearing and other benefits that are not currently provided to retirees, he said.

Print Headline: State draws protest over Medicare deal

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