Judge denies Medicaid services provider’s injunction request

By Marissa Harshman, Columbian health reporter

Published:

Updated: April 26, 2012, 5:47 PM

 

A federal judge denied the request by Vancouver-based Columbia United Providers to stop the state from implementing contracts with other health insurance plans to provide Medicaid services.

U.S. District Court Judge Benjamin H. Settle issued his ruling on the injunction request Wednesday. Settle concluded that CUP and Community Health Plan of Washington, another Medicaid services provider, failed to show “that the balance of hardships tip sharply in their favor.” The state Health Care Authority, however, demonstrated the hardship it would face if an injunction order stopped the state from implementing new contracts, which are set to go in effect July 1, Settle said.

“The court concludes that the public interest factor weighs in favor of HCA,” Settle wrote in his 26-page ruling.

Columbia United Providers filed a lawsuit against the HCA earlier this year after the state announced that it would not continue its contract with CUP to provide Medicaid managed care services to Clark County residents. Community Health Plan of Washington joined CUP’s lawsuit after the state reversed its decision to award the group contracts in Clark and three other counties.

The plans argue HCA violated its own bidding process and ignored requirements intended to make the bidding process fair and ensure the adequacy of the provider networks of the selected plans.

HCA argues it did not award a contract to CUP because its proposed rates were too high and it underperformed in some of the categories used to evaluate bids. Community Health Plan wasn’t given a contract in four counties because its proposed rates were too high, according to court documents.

The lawsuit is set to go to trial at a later date. In the meantime, the plans filed the injunction to try to halt the state’s effort to contract with the successful bidders. Attorneys for the insurance plans and the state made their cases before Settle in Tacoma earlier this month.

Bill Stephens, senior counsel for the state Attorney General’s office, said the judge’s ruling Wednesday accurately states the law at issue and shows that HCA was in compliance with its bidding process.

“HCA is pleased with the ruling and believes it’s the appropriate ruling,” Stephens said.

Dr. Lisa Morrison, medical director for CUP, said CUP officials were disappointed with the ruling.

“We continue to be concerned about who will treat Medicaid recipients in Clark County,” Morrison said. “The fact that the judge said he won’t stop the process of the procurement doesn’t make us think the situation, in terms of network adequacy, is any different today than it was when the RFPs (request for proposals) were submitted in December.”

The contracts with the health plans are to provide Medicaid services to more than 700,000 Washington residents, including more than 65,000 in Clark County. The selected insurance plans will manage care for the state’s Healthy Options and Basic Health members, most of whom are low-income women and children.

In addition to preparing the legal case, CUP officials are working with local legislators.

Legislators added proviso language to the negotiated supplemental operating budget that could potentially benefit the health plans.

The language would require HCA to certify that Medicaid managed care contractors have established networks of acute, primary and specialty care providers sufficient to meet the needs of the anticipated enrollees.

If the contracted plans couldn’t meet requirements, the budget language would require the state to accept new bids from each of the original applicants and continue the process until finding a plan that meets the requirements.

Local legislators and CUP supporters are urging Gov. Chris Gregoire to keep the language in the final budget.

Marissa Harshman: 360-735-4546; http://twitter.com/col_health; http://facebook.com/reporterharshman; marissa.harshman@columbian.com.