Correction: Get Insured, a company based in Mountain View, Calif., withdrew its bid to build a small-business health insurance exchange for Arkansas after two unidentified people improperly contacted a member of the Arkansas Health Insurance Marketplace Board of Directors about the contract. The headline in this artcile inaccurately stated that the state found the company violated procurement rules.
One of the two finalists for a contract to build a small-business health insurance exchange for Arkansas withdrew its bid Monday after an inquiry into whether two people attempted to improperly contact a state board member about the contract.
The decision by Mountain View, Calif.-based Get Insured, also known as Vimo Inc., came after John Denery, a member of the Arkansas Health Insurance Markeplace Board of Directors, reported to the marketplace's director that two people had tried to contact him about the company's bid.
The marketplace board's procurement rules prohibit any communications between bidders for a contract and board or staff members outside of the procurement process during a "blackout period" that started Nov. 10.
In a letter delivered to the director, Cheryl Smith, on Monday, Get Insured chief executive Chini Krishnan said the company officials "have not discovered any improper contact between any employee, contractor or agent of the Company and any Board member."
"However, based on the information you have shared with us, we cannot rule out that individuals outside the Company's direct influence contacted a Board member during the blackout period," Krishnan said in the letter.
He said the company was withdrawing its bid "because of the concerns raised by the Board" and to "preserve the integrity of the proposal process."
"We deeply respect the AHIM [request for proposal] requirements and hold ourselves to the highest standards of ethics and business conduct," Krishnan said in the letter. "We are initiating a thorough review of all the Company's RFP policies, procedures, and practices to ensure full compliance moving forward."
In a phone interview, Andrea Riggs, director of client relations for Get Insured, called the events "hugely disappointing."
"We've been involved in dozens of RFPs with states, and this is the first time anything like this has even come into question," she said.
The decision leaves Reston, Va.-based hCentive Inc. as the sole remaining finalist for the contract to build the technological framework for the state-based small business health insurance exchange.
It has offered to build the exchange and operate it for three years for $8.9 million. Get Insured's proposal totaled $25.1 million.
The two companies were among six that responded to a request for proposals issued by the marketplace board in November.
An evaluation committee, made up of marketplace board and staff members, selected the finalists at a meeting last month. Representatives from both companies made presentations to the board on Jan. 23.
The board had been scheduled to select the winning bid Wednesday.
On Jan. 30, Denery sent an email to the board's attorney, Tracey Dennis, saying he had been contacted the day before by "a colleague" who had been given information by someone to pass along to Denery about Get Insured.
"Upon hearing this, I told my colleague not to provide me with any such information," Denery said in the email.
The same day, Denery said he "received a message" from another colleague indicating that someone would contact him about Get Insured.
"The person identified in this message was different than the one mentioned by the first colleague," Denery said in the email. "I have not had any contact with this person, and am not aware of any further attempts by this person to contact me."
Marketplace spokesman Heather Haywood said Denery called Smith on Jan. 29 and told her about the attempts to contact him. Smith then told board Chairman Sherrill Wise, who directed the marketplace staff to notify all the board members and begin making inquiries, Haywood said.
Dennis said Monday that she did not know the names of the people who tried to contact Denery or of the colleagues mentioned in his email. Denery didn't return a call seeking comment.
Riggs said the company didn't direct anyone to contact board members. Bruce Hawkins, a Morrilton-based lobbyist for the company, said he didn't make any such attempts either.
Created by the Legislature in 2013, the marketplace is working to build insurance exchanges that would replace the ones set up for the state by the federal government under the 2010 Patient Protection and Affordable Care Act. Supporters of Arkansas-based exchanges say they could be tailored to better fit the state's needs.
Enrollment in Arkansas' planned small-business exchange is scheduled to start in October for coverage that would start in 2016.
For individual consumers, enrollment would begin in 2016 for coverage that would start in 2017.
Small-business exchanges allow employers to shop for coverage for their employees. In some cases, the employers can offer their employees the choice plans offered by different companies. Some employers that purchase coverage through the exchanges may qualify for federal income tax credits
HCentive built the technology for the federally operated small business exchanges used by Arkansas and 32 other states.
The company also provided the technology for the small-business and individual exchanges for Colorado, New York and Kentucky.
Get Insured built the "consumer, issuer and agent-facing" components of California's exchange, according to the company's Jan. 23 presentation to the board. It also built the small-business exchanges for New Mexico and Mississippi and the individual and small-business exchanges for Idaho.
On Wednesday, the board could decide to award the contract to hCentive, consider one of the four companies that were not named as finalists or delay implementing the small business exchange until next year, when one company could be hired to build both the exchanges for small businesses and individuals, said board member Fred Bean, president of a Little Rock benefits consulting firm.
"It's just unfortunate that everybody's gone to this much time, and this much expense, this much effort and this much commitment, and because of an error, that to me is not a major error, we've ended up with one choice" of finalists, Bean said.
He said his firm enrolled a company through the federal small business exchange and found the process to be time-consuming. But he said hCentive could make Arkansas' exchange more user-friendly than the federal one if it wins the contract.
Board member Annabelle Tuck said "it's a good idea" that Get Insured withdrew its bid.
"Everybody knew the rules," Tuck said. "I get a little stiff when I see people who say maybe the rules don't apply to me."
Metro on 02/10/2015