After initially scoring last among four bidders, a Florida company won a contract to manage dental benefits provided to Arkansas Medicaid recipients after the state's procurement director on Friday disqualified two of the other bidders.
The ruling cleared the way for Fort Lauderdale-based Managed Care of North America to provide the dental benefits starting in 2018 along with Sherwood-based Delta Dental of Arkansas, which scored second in an evaluation by a committee of state employees.
The highest-ranked bidder, Boston-based DentaQuest, and Irvine, Calif.-based Liberty Dental, which scored third, were disqualified after state Procurement Director Edward Armstrong found that they failed to disclose lawsuits involving similar services provided by the companies in other states.
Liberty also failed to disclose a $10,000 administrative penalty imposed on the company by California in 2015, Armstrong found.
The disqualifications sustained Managed Care of North America's protest that the bidders failed to disclose the legal actions, but Armstrong rejected the company's claim that Delta Dental also failed to disclose lawsuits. Those suits involved corporate affiliates that would not be involved with the Arkansas contract, he said.
The ruling cleared the way for Managed Care of North America and Delta Dental to provide dental benefits to about 750,000 Arkansans enrolled in the state's traditional Medicaid program, including about 500,000 children, 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.
Dentists and other oral health care providers would be reimbursed for services by the companies instead of the Medicaid program, as they are now.
Adults who became eligible for Medicaid under the expansion of the program in 2014 don't receive dental benefits, but state officials hope to offer it as an incentive to enrollees who pay premiums and visit a primary care doctor.
Those dental benefits may be provided through the managed care contracts, according to the bid solicitation.
The managed care contracts are part of an effort to reduce the growth of spending in the state's Medicaid program.
The Stephen Group, a Manchester, N.H.-based consultant to a legislative task force, estimated last year that such contracts would save the state about $5 million in annual spending on dental care while also generating more than $3 million a year in state premium taxes that would be levied on the dental plans.
"We had really strong bidders with national reputations, so we're excited about what is to come," state Department of Human Services spokesman Amy Webb said in an email. "We think there will be positives for both beneficiaries and providers, such as electronic claims payment."
The contracts must still go to the Legislature for approval.
All four companies that responded to the bid solicitation, issued in September, proposed the minimum cost allowed under the solicitation but differed in their scores on the technical merits of their proposals.
In sustaining Managed Care of North America's protest, Armstrong faulted DentaQuest for failing to disclose a pending lawsuit alleging that it arbitrarily denied medically necessary orthodontics to children in Massachusetts' Medicaid program.
He found the company violated a requirement in the solicitation to disclose any ongoing or resolved litgation or administrative proceedings related to Medicaid managed care contracts in other states within the past five years.
DentaQuest interpreted the requirement to mean it had to only disclose litigation related to work for Arkansas' Medicaid program, according to a letter submitted by an attorney for the company in response to the protest.
Armstrong rejected that argument.
"The subject matter of the [bid solicitation] is the provision of dental services under a managed care model, which Arkansas has not yet had, so it would be absurd to construe the [bid solicitation] as only inquiring about Arkansas managed care programs in this State, as none have previously existed," Armstrong wrote.
Similarly, Armstrong found that Liberty failed to disclose a lawsuit in Idaho in which another company claimed that Liberty had excessively redacted information from the publicly available version of a bid Liberty submitted in that state.
He also cited the omission of the $10,000 penalty, which resulted from late payments to providers.
William Bird III, a Little Rock attorney representing Liberty, said the company is reviewing Armstrong's decision.
A spokesman for DentaQuest didn't return calls seeking comment on Friday.
Metro on 02/04/2017