Dental insurer to drop lawsuit in Arkansas Medicaid case

Firm, state resolve bid issue

A Boston company has agreed to drop a lawsuit challenging the company’s disqualification from the bidding for a multimillion-dollar contract to provide dental benefits for Arkansas Medicaid recipients.

DentaQuest was one of four companies that bid on contracts to provide benefits, starting next year, to about 750,000 Arkansans, including about 500,000 children, enrolled in the state’s traditional Medicaid program in exchange for fixed monthly payments for each enrollee.

Information in the bid solicitation and submitted by the companies indicates the payments are expected to total about $300 million over two years.

DentaQuest’s proposal was initially ranked the highest among the four bids, but state Procurement Director Edward Armstrong disqualified the company in February for failing to disclose a lawsuit that had been filed against it in Massachusetts.

He also disqualified Irvine, Calif.-based Liberty Dental for similar omissions.

That left Sherwood-based Delta Dental, which had ranked second in an evaluation by a committee of state employees, and Fort Lauderdale, Fla.-based Managed Care of North America, which ranked last in the evaluation, as the winning bidders.

DentaQuest contended in the lawsuit, filed in Pulaski County Circuit Court in April, that its omission of the Massachusetts case, filed on behalf of children who had been denied orthodontic care, was “immaterial” and shouldn’t have resulted in the company’s bid being disqualified.

It also contended that Armstrong damaged the company’s reputation when he wrote, in declining to reconsider the disqualification, that the company’s omission of the Massachusetts case “has all the hallmarks of being an intentional representation.”

Armstrong noted in that ruling that DentaQuest said in its bid that it did not have “any resolved, pending or threatened litigation, administrative or regulatory proceedings or similar matter related to the subject matter of the services sought in this” bid solicitation.

Along with a request filed in court Friday to drop the lawsuit, DentaQuest included a letter from Armstrong, also dated Friday, clarifying that the disqualification “was not based on any determination of misconduct or deception by DentaQuest.”

“I strongly encourage DentaQuest to bid on any future opportunities that may arise in Arkansas, and to seek clarification as to any solicitation requirements it may consider unclear or ambiguous,” Armstrong said in the letter.

The court filing also included a proposed order saying the Department of Human Services concurs with Armstrong’s letter and agrees the company is “eligible and encouraged to bid on future contract opportunities with the state of Arkansas.”

Scott Hardin, a spokesman for the state Department of Finance and Administration, said Monday that DentaQuest had never been barred from bidding on other state contracts.

In a statement Monday, DentaQuest spokesman Kristin LaRoche said, “We are pleased to have reached a resolution with the state and look forward to future opportunities to serve the people of Arkansas.”

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