More officials attack state agency over health care contracts
Sen. Bill Brady, the Bloomington lawmaker who unsuccessfully challenged Gov. Pat Quinn, lambasted the administration for its handling of $7 billion worth of health insurance contracts awarded in 2011 to Blue Cross and Blue Shield of Illinois and two other providers to provide health coverage for more than 400,000 state employees, retirees and their family members.
His criticism came a day after the state Auditor General issued a scathing review of the Department of Healthcare and Family Services, which negotiated the deals, and the Executive Ethics Commission responsible for monitoring the process.
The audit charred both entities for a troubling series of failures and "serious deficiencies" that left the auditors unable to assess whether the massive deals serve Illinois' best interests.
Brady said he's asking for the hearings and the suspension of the state's procurement process "after a review of the very disturbing summary and the failure of the current administration to comply" with state rules that govern contracts. He also said he will work with other legislators to craft "emergency legislation" that will address shortcomings detailed in the audit.
The state is preparing to reopen for bids a supplemental contract that could provide health insurance coverage for about 241,000 state employees, retirees and family members outside the six-county Chicago metro area.
As part of a settlement on a lawsuit filed by Urbana-based Health Alliance, an insurer cut out of the contracts last year, the department is required to issue a request for proposals by the end of April.
But Brady wants to halt the process until the Illinois Legislative Audit Commission, a legislative committee of which he's a member, "can take a much closer look at (the audit's) findings."
The audit, ordered by Illinois lawmakers in May – a month after the state awarded the contracts – cited wholesale problems with the state's review and process of selecting winners:
A 12-member committee in charge of evaluating the contracts did not meet once during the review process, a violation of department policy. Further, 10 of the 12 evaluators did not provide sufficient comment on the proposals.
The agencies allowed a consulting firm, Mercer LLC, to play a key role in the review, even though the company had business relationships with each of the firms that bid on the contract.
The department awarded Blue Cross and Blue Shield a contract to offer health plans in 20 counties on which it did not bid. The insurer also had no primary-care physicians in its network in 24 counties where its plans were to be offered.
An original recommendation to award the contract was changed shortly after an agency head met with Gov. Pat Quinn's office in late March.
The healthcare department's original plan was to award Blue Cross and Blue Shield a contract to offer managed-care insurance coverage to state employees in eight counties in and around the Chicago metro, and Health Alliance the right to offer coverage in 29 counties.
But after a meeting with officials from the governor's office, the department opted to expand coverage for Blue Cross and Blue Shield and cut Health Alliance out of the picture, according to the audit. It's unclear what prompted the changes.
The department has largely disputed the audit's findings and maintained that the process of awarding the contracts was "executed in a fair and competitive manner."
Nonetheless, following a lawsuit filed by a jilted insurer and the pending audit, the state acquiesced and agreed to reopen a portion of the contracts for bids.
Health Alliance, which provides insurance for about 93,000 state workers, retirees and dependents under an emergency contract that expires at the end of June, said Thursday that it plans to re-bid on the supplemental contract.