Pennsylvania court sides with UnitedHealthcare in bid protest over Medicaid contract

Gavel court room lawsuit judge
A Pennsylvania court reversed the state's decision to deny UnitedHealthcare's protest over a Medicaid contract awarded to Centene. (Pixabay)

A Pennsylvania court has breathed new life into a dispute over which insurer will oversee the state’s $12 billion Medicaid program.

The Commonwealth Court of Pennsylvania overturned a decision by the Pennsylvania Department of Human Services in which the agency denied a bid protest by UnitedHealthcare after DHS awarded Medicaid contracts to Centene in late 2016.

The court ruling leaves open the possibility the state will have to relaunch a bid proposal to appoint a Managed Care Organization to administer the HealthChoice program for the third time in less than two years.

DHS spokesperson Colin Day told FierceHealthcare the agency is "currently reviewing the decision."

“The Department of Human Services (DHS) is committed to providing the highest quality healthcare available to the individuals we serve across the commonwealth,” he said in a statement. 

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UnitedHealthcare took specific issue with a December 19, 2016, meeting in which DHS met with Centene officials shortly before awarding the bid to Centene subsidiary Pennsylvania Health & Wellness. In its bid protest shortly after the award was announced, UnitedHealthcare claimed the Department “acted arbitrarily and capriciously, abused its discretion and acted contrary to the law” by allowing Centene to modify its proposal to adhere to updated scoring criteria. 

The Department denied UnitedHealthcare’s bid protests in June of last year, prompting the insurer to file a legal complaint.

The Pennsylvania court ruled (PDF) that the director “erred in denying United’s bid protests” and reversed the decision, indicating the December 19 meeting with Centene officials violated state procurement code regardless of the nature of the meeting.

“We are pleased with the Commonwealth Court’s decision and look forward to continuing to serve the more than 1 million Pennsylvanians who have entrusted us with their health care needs," UnitedHealthcare spokesperson Jocelyn Parker said in a statement to FierceHealthcare.