Meridian and WellCare Continue Fighting for a Piece of Medicaid

Feb 1, 2016

Healthcare companies WellCare and Meridian are continuing their fights to manage a piece of Iowa’s $4.2 billion Medicaid system.

WellCare was one of four companies selected to privatize Medicaid. But its contract was terminated after Administrative Law Judge Christie Scase determined it had violated rules of the bid process. 

Scase says WellCare fouled by not disclosing the amount of a  2012 settlement. WellCare says it wasn’t necessary to list the settlement’s amount of $137.5 million. The ruling also found it was improper for a WellCare lobbyist and consultant to communicate with Michael Bousselot, the governor’s chief healthcare advisor, during a “blackout” period. WellCare argues since Bousselot isn’t a state agency employee, the communication was not a violation.

Meridian, for it's part, says the selection process used by Iowa’s Department of Human Services to pick which companies would manage Iowa’s Medicaid program was arbitrary, capricious and unfair. Its former  co-plaintiff Aetna argued the same, but Aetna gave up the fight after Polk County District Court Judge Robert Blink denied a request to force DHS to temporarily halt preparations for Medicaid privatization.

The state argues DHS has discretion on how it selected the companies to manage Iowa’s Medicaid system.

Meridian also suggests the state simply reevaluate its application, since starting the selection process over might be impractical. Meridian reasons since WellCare's contract was tossed, there's room for a fourth healthcare company to manage Medicaid. 

Iowa’s Medicaid program is slated to go into private management in four weeks. Judge Blink says he is aware of the tight timeline, but did not say exactly when he’ll issue his ruling.