Beshear cancels and re-bids $8 billion in Medicaid managed-care contracts awarded by his predecessor

Gov. Andy Beshear (Photo from Kentucky Today)

Gov. Andy Beshear has cancelled, and ordered rebidding of, $8 billion in Medicaid managed-care contracts that then-Gov. Matt Bevin awarded to five insurance companies 24 days after Beshear defeated him and 11 days before Beshear took office.

Beshear offered several reasons for his actions at a Dec. 23 news conference, Jack Brammer reported for the Lexington Herald-Leader. He noted that the original request for proposals included provisions from Bevin's plan to change Medicaid, which Beshear recently rescinded.

Bevin's proposal would have required "able-bodied" adults without dependents to work or participate in approved "community engagement" activities 80 hours a month and pay small, income-based premiums monthly to stay covered by Medicaid.

The original proposal projected that in five years the Medicaid rolls would have 95,000 fewer people with the plan than without it, largely because of non-compliance with its requirements, including monthly reporting. Bevin's plan had been twice blocked by a federal judge in Washington, D.C., and was awaiting the decision of an appeals court.

Beshear also noted that members of the legislature's Government Contract Review Committee, which has only advisory powers, unanimously voted to reject the contracts on Dec. 9 "and that Bevin had shown bias against one of the unsuccessful bidders -- Passport Health of Louisville -- by criticizing the company," Brammer noted.

Passport and Anthem Inc., which both have managed-care contracts, were not included among those awarded for the fiscal year beginning July 1, 2020, which the Bevin administration announced Nov. 27. The contracts went to Aetna Better Health of Kentucky, Humana Health Plan and Wellcare Health Insurance of Kentucky, all of which have contracts with the state, and two newcomers, United Healthcare and Molina Health Care.

Passport and Anthem had promised to appeal the awards; Beshear's cancellation of the contracts could crease a cause of legal action for the other companies.

About 1.2 million of the 1.3 million low-income and disabled Kentuckians in Medicaid are covered by the managed-care system, in which the companies deal with patients much like private insurance plans.

Beshear said the state would rebid the contracts on an accelerated time schedule, with a request for proposal target date of Jan. 10; responses due Feb. 7; and a goal of selecting providers in April.

Meanwhile, the managed-care program will operate under the current contracts, which Beshear said may require extensions to prevent any loss of coverage.

He told reporters that his decision “has nothing to do with who won or lost in the initial process. The rebidding will be fair. No one is guaranteed a contract."