February 5, 2021 - PA.Gov

Dear :333 Market Street, 16th Floor | Harrisburg, PA 17101-2234 | 717.346.9903 | F 717.425.5343 | openrecords.pa.gov
February 5, 2021 PACFILED Michael Krimmel, Esq. Prothonotary Commonwealth Court of Pennsylvania Pennsylvania Judicial Center 601 Commonwealth Avenue, Suite 4500 Harrisburg, PA 17106-2575
RE: Submission of Record in:
Aetna Better Health of Pennsylvania, Inc. v. Pennsylvania Department of Human Services, No. 1 CD 2021
Dear Mr. Krimmel: We hereby submit the record in the above-referenced matter. Section 1303 of the Right-to-Know Law, 65 P.S. §§ 67.101, et seq., (“RTKL”), defines the Record on Appeal as “the record before a court shall consist of the request, the agency’s response, the appeal filed under section 1101, the hearing transcript, if any, and the final written determination of the appeals officer.” Pursuant to Department of Transportation v. Office of Open Records, 7 A.3d 329 (Pa. Commw. Ct. 2010), this record includes all “evidence and documents admitted into evidence by the appeals officer pursuant to Section 1102(a)(2).” The record in this matter consists of the following: Office of Open Records Docket No. 2020-2256:
1. The appeal filed by Mark Schwemler, on behalf of Aetna Better Health of Pennsylvania, Inc. (“Requester”) to the Office of Open Records (“OOR”), received November 6, 2020.
2. Official Notice of Appeal dated November 6, 2020, sent to both parties by the OOR, advising them of the docket number and identifying the appeals officer for the matter.
3. Email chain dated November 16, 2020 wherein the OOR grants the Department of Human Services (“Department”) additional time to make a submission and the Requester grants the OOR additional time to issue the final determination.
Prothonotary February 5, 2021 Commonwealth Court of Pennsylvania Page Two
4. Email chain dated November 19, 2020 through November 20, 2020 wherein the
OOR confirms the Requester’s withdrawal of a portion of the appeal.
5. Department’s submission dated November 23, 2020.
6. The Final Determination dated December 3, 2020, issued by the OOR.
The OOR has discretion to hold a hearing on appeals filed but chose not to do so in this matter. Therefore, there is no transcript to transmit. Certification of the record in this case is attached to this letter. Please feel free to contact us for any reason in connection with this matter. Sincerely,
Charles Rees Brown Chief Counsel Attachments cc: See certificate of service
Commonwealth of Pennsylvania
I, Elizabeth Wagenseller, certify that the accompanying electronically transmitted materials are true
and correct copies of all materials filed in the Office of Open Records and constitute the record for :
Aetna Better Health of
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
AETNA BETTER HEALTH OF : OF PENNSYLVANIA, INC., : Petitioner, : : No. 1 CD 2021 v. : : PENNSYLVANIA DEPARTMENT : OF HUMAN SERVICES, : Respondent. :
CERTIFIED RECORD
Charles Rees Brown Chief Counsel Commonwealth of Pennsylvania Office of Open Records 333 Market Street, 16th Floor Harrisburg, PA 17101-2234 Phone: (717) 346-9903 Fax: (717) 425-53123 E-mail: [email protected]
February 5, 2021
AETNA BETTER HEALTH OF : OF PENNSYLVANIA, INC., : Petitioner, : : No. 1 CD 2021 v. : : PENNSYLVANIA DEPARTMENT : OF HUMAN SERVICES, : Respondent. :
CERTIFICATE OF SERVICE
I hereby certify that I have served a true and correct copy of the Certified Record upon the following persons via email only: Thomas Helbig, Jr., Esquire Mark J. Schwemler, Esquire Gregory S. Voshell, Esquire Elliott Greenleaf, PC 925 Harvest Dr., Suite 300 Blue Bell, PA 19422 [email protected] [email protected] [email protected] (for Aetna Better Health of PA, Inc.) Kenneth J. Serafin, Esquire Pennsylvania Department Of Human Services 625 Forster Street Harrisburg, PA 17120 [email protected] (for Department of Human Services) Joshua J. Voss, Esquire Kleinbard, LLC One Liberty Place, 46th Floor Philadelphia, PA 19103 [email protected] (for PA Health and Wellness, Inc.)
Thomas A. Leonard, Esquire Obermayer, Rebmann, Maxwell & Hippel, LLP 1500 Market St., Suite 3400 Ctr Sq W Philadelphia, PA 19102 [email protected] (for Vista Health Plan, Inc.) Jessica C. Abrahams, Esquire Faegre Drinker Biddle & Reath LLP 1500 K Street NW Suite 1100 Washington, DC 20005 [email protected] (for UPMC For You, Inc.) Brian S. Gocial, Esquire Joel Michel, Esquire Blank Rome, LLP 1 Logan Square Philadelphia, PA 19103 [email protected] (for Geisinger Health Plan)
Received 2/5/2021 1:37:58 PM Commonwealth Court of Pennsylvania
Sean Shafiq Zabaneh, Esquire DuaneMorris LLP 30 South 17th Street Philadelphia, PA 19103-4196 [email protected] (for Health Partners Plan) Kevin J. McKeon, Esquire Melissa A. Chapaska, Esquire Hawke McKeon & Sniscak 100 North 10th Street Harrisburg, PA 17101 [email protected] [email protected] (for UnitedHealthcare of PA, Inc.)
C. Grainger Bowman, Esquire K & L Gates LLP 17 N. Second Street, 18th Floor Harrisburg, PA 17101 [email protected] (for Gateway Health Plan, Inc.)
Faith Henry, Administrative Officer Office of Open Records 333 Market Street, 16th Floor Harrisburg, PA 17101-2234 Phone: (717) 346-9903 Fax: (717) 425-53123 E-mail: [email protected]
Dated: February 5, 2021
AETNA BETTER HEALTH OF : OF PENNSYLVANIA, INC. : Petitioner, : : No. 1 CD 2021 v. : : PENNSYLVANIA DEPARTMENT : OF HUMAN SERVICES, : Respondent. :
TABLE OF CONTENTS - RECORD
Mark Schwemler and Aetna Better Health of Pennsylvania, Inc. v. Pennsylvania
Department of Health, OOR Dkt. AP 2020-2256
Office of Open Records Docket No. AP 2020-2256:
1. The appeal filed by Mark Schwemler, on behalf of Aetna Better Health of Pennsylvania, Inc. (“Requester”) to the Office of Open Records (“OOR”), received November 6, 2020.
2. Official Notice of Appeal dated November 6, 2020, sent to both parties by the OOR, advising them of the docket number and identifying the appeals officer for the matter.
3. Email chain dated November 16, 2020 wherein the OOR grants the Department of Human Services (“Department”) additional time to make a submission and the Requester grants the OOR additional time to issue the final determination.
4. Email chain dated November 19, 2020 through November 20, 2020 wherein the OOR confirms the Requester’s withdrawal of a portion of the appeal.
5. Department’s submission dated November 23, 2020.
6. The Final Determination dated December 3, 2020, issued by the OOR.
OOR Exhibit 1
Mark J. Schwemler, Esq
Mr. Erik Arneson
Re: Right to Know Law Appeal from Request No. 20-RTKL-360
Dear Mr. Arneson:
Aetna Better Health of Pennsylvania Inc. (“Aetna”) files this Appeal of the Department of
Human Services (the “Department”) October 16, 2020 decision granting in part and denying in
part Aetna’s Right to Know Law (“RTKL”) requests. Attached as Exhibit 1 are Aetna’s September
9, 2020 RTKL requests, in which Aetna made four (4) specific requests for records. Attached as
Exhibit 2 is the October 16, 2020 response of the Department. The Department indicated that it
possessed records responsive to Aetna’s requests, however, it denied Aetna’s first two record
requests relying upon the exemption sent forth at 65 P.S. § 67.708(b)(26).1 (Ex. 2 at 2.) As set
forth below, however, the Department failed to meet its burden for withholding records and
improperly relied upon the exemption set forth at 65 P.S. § 67.708(b)(26).
I. ARGUMENT
A. Legal Principles
Under the RTKL, records in the possession of a state agency are presumed to be a public
record unless, “the record is exempt from disclosure under Section 708, or the record is exempt
from disclosure under any other federal or state law or regulation.” Easton Area Sch. Dist. v.
Miller, 232 A.3d 716, 724 (Pa. 2020). “Consistent with the RTKL’s goal of promoting government
transparency and its remedial nature, the exceptions to disclosure of public records must be
1 DHS also redacted personally identifiable information contained in the records
responsive to Aetna’s third and fourth requests, which Aetna does not challenge. (Ex. 2 at 2.)
OOR Exhibit 1 Page 002
II Elliott Greenleaf II A Professional Corporation
BLUE BELL HARRISBURG SCRANTON
Phone: (215) 977-1000 • Fax: (215) 977-1099 www.elliottgreenleaf.com
WILKES- BARRE WILMINGTON
November 6, 2020
narrowly construed.” Id.; see also California Univ. of Pennsylvania v. Schackner, 168 A.3d 413,
421 (Pa. Commw. Ct. 2017) (same). The agency “has the burden of proving that a record is exempt
from public access ‘by a preponderance of the evidence.’” Easton Area Sch. Dist., 232 A.3d at
724.
B. UnitedHealthcare of Pennsylvania, Inc. v. Pennsylvania, Dep’t of Human Servs.,
187 A.3d 1046 (Pa. Cmwlth. Ct. 2018) Is Inapposite Because Portions of the
Application At Issue Have Already Been Publicly Disclosed.
Aetna’s first request sought a discrete portion of the Application submitted by
UnitedHealthcare of Pennsylvania, Inc. (“United”), specifically United’s “Work Statement
Questionnaire Responses to Member Management Question 3 and Care Management Question 7.”
(Ex. 1 at 1.) The Department denied Aetna’s request stating that it was not required to disclose
United’s Application until after a contract is awarded, relying on the exemption set forth at 65 P.S.
§ 67.708(b)(26) and UnitedHealthcare of Pennsylvania, Inc. v. Pennsylvania, Dep’t of Human
Servs., 187 A.3d 1046 (Pa. Cmwlth. Ct. 2018). (Ex. 2 at 2.)
In United, however, the Court explained that the rationale behind preventing disclosure
until an actual contract is awarded is because “[p]rematurely granting access to proposal
documents prior to the award of the contract could bestow an unfair advantage on competitors in
any subsequent bidding” if the Request for Proposal was later rescinded and the project rebid. Id.
at 1053. This, the Court found, would not be consistent with the purpose of this exemption, which
is “to foster competitive bidding until a contract is awarded.” Id. at 1058. In other words, the
purpose of this exemption is to benefit the bidder who submitted the application, by preventing the
information in that application from being disclosed prior to the award of a contract, in the event
that the contract is re-bid. Id.
But, here, United itself has already publicly disclosed aspects of its “Work Statement
Questionnaire Responses to Member Management Question 3 and Care Management Question 7.”
Indeed, on July 8, 2020, United filed a bid protest relating to RFA No. 07-19, in which it disclosed
specific details regarding these portions of its proposal. (Ex. 3 at 8-9). United described an alleged
“innovative feature” concerning its idea to put a “regional council” in place, which the Department
then improperly shared with other applicants, before a decision was made on the applications, in
the hope that others would adopt the concept. (Id.)2 Accordingly, unlike in UnitedHealthcare,
here disclosure of this portion of United’s application carries no risk of bestowing “an unfair
advantage on competitors in any subsequent bidding” and will not prejudice this exemption’s goal
of “foster[ing] competitive bidding” because United itself has taken the affirmative step of
disclosing information regarding these portions of its application. UnitedHealthcare, 187 A.3d at
1053.
2 Aetna has submitted a bid protest of its own based on the information disclosed by
United in its July 8, 2020 protest. The public records being sought are therefore essential to
Aetna’s protest.
Mr. Erik Arneson Right to Know Law Appeal from Request No. 20-RTKL-360
November 6, 2020
Page 3
Moreover, as UnitedHealthcare makes clear, this exemption is meant for the benefit of the
bidder whose proposal is being sought so as to not place that bidder at a competitive disadvantage
in any subsequent re-bid. UnitedHealthcare, 187 A.3d at 1058. But, it is United itself that has
taken the affirmative step of disclosing portions of its applications to the public in its bid protest.
(Ex. 3 at 8-9.) In other contexts, courts routinely find that any confidentiality and/or privilege that
attached to information was waived when a person places their own confidential and/or privileged
information at issue. See Octave ex rel. Octave v. Walker, 103 A.3d 1255, 1263 (Pa. 2014)
(confidentiality of mental health records is waived by filing lawsuit which places those records at
issue); Rost v. State Bd. of Psychology, 659 A.2d 626, 629 (Pa. Commw. Ct. 1995)
(psychotherapist-patient privilege is waived where “the client places the confidential
information at issue.”); Commonwealth v. McCullough, 201 A.3d 221, 241 (Pa. Super. Ct. 2018)
(attorney-client privilege can be waived by placing the confidential information at issue). This is
true even where the confidential information was placed “at issue” in a separate proceeding. See
Com. v. Hunter, 60 A.3d 156, 160 (Pa. Super. Ct. 2013) (spousal privileged was waived because
communications were placed at issue in separate child welfare proceedings).
Accordingly, for all the above reasons, the Department erred in denying Aetna’s first
request based upon the exemption set forth at 67.708(b)(26) and UnitedHealthcare.
C. The Department Did Not Address The Substance Of Aetna’s Second Request
And Failed To Show That The One Responsive Record Identified Was Exempt
From Disclosure.
In Aetna’s second request, Aetna sought: “All records reflecting the transmission of the
contents or substance of the records described in item No. 1, above, to any DHS employee or
representative between December 17, 2019 and July 1, 2020.” (Ex. 1 at 1.) Aetna sought records
reflecting who in the Department received a copy of United’s application before selections were
made. In response, the Department indicated that there was only one record that was responsive
to this request, “a communication with the evaluation committee about how to access the submitted
proposals.” (Ex. 2 at 2.) However, the Department has failed to submit any affidavit or other
evidence in support of its assertion that there is only one (1) record responsive to this request, and
thus, has failed to meet its burden. Easton Area Sch. Dist., 232 A.3d at 724 (agency has “a
preponderance of the evidence” burden).
As a preliminary matter, the Department’s Response seems to purposely misconstrue
Aetna’s request. Aetna is seeking who in the Department received a copy of United’s Application.
(Ex. 1.) This would be reflected in the Department’s own records, not in the records of
communications with evaluation committee members. It is impossible to claim, also, that no one
in the Department received a copy of United’s application. Obviously, it had to be received and
distributed within the Department.
With respect to the one record identified by the Department, however, it was withheld
pursuant to 65 P.S. § 67.708(b)(26), claiming that the communication constituted “notes and other
records of agency proposal evaluation committees established under 62 Pa. C.S. § 513 (relating to
competitive sealed proposals).” (Id.) However, the Office of Open Records has held that “[t]o
Mr. Erik Arneson Right to Know Law Appeal from Request No. 20-RTKL-360
November 6, 2020
Page 4
qualify under (b)(26), the records must show the evaluations and considerations of the Evaluation
Committee, not merely be records that are considered by the Committee.” Team Clean, Inc., v.
School District Of Philadelphia, 2011 WL 1553558, at *3 (Pa.Off.Open Rec., Apr. 21, 2011).
Moreover, the record must be one that was “used by an evaluation committee during the course of
evaluations of competitively bid proposals.” Aetna Better Health Of Pennsylvania, Inc., v.
Pennsylvania Department Of Human Services, 2017 WL 3048838, at *8-9 (Pa.Off.Open Rec. July
14, 2017).
Here, the Department has failed to explain how this communication from the Department
to the evaluation committee could possibly “show the evaluations and considerations of the
Evaluation Committee” or be “used by an evaluation committee during the course of evaluations
of competitively bid proposals.” Team Clean, Inc, 2011 WL 1553558, at *3; Aetna Better Health
Of Pennsylvania, Inc, 2017 WL 3048838, at *8-9. Accordingly, the Department has failed to carry
its burden of showing that even this one record is exempt pursuant to 65 P.S. § 67.708(b)(26).
II. CONCLUSION
DHS bears the burden of demonstrating the applicability of the RTKL’s narrowly
construed exceptions. It has failed to do so here for the reasons set forth above, or has avoided
addressing the substance of Aetna’s requests, altogether. Aetna respectfully requests that the
Office of Open Records direct DHS to produce all withheld records.
Sincerely,
EXHIBIT 1
Ii Elliott Greenleaf ii A Professional Corporation
MARK J. SCHWEMLER, ESQ.
DIRECT DIAL: 215-977-1051 EMAIL: MJS@ELLIOTTGREENLEJ\F.COM
VIA ELECTRONIC AND FIRST CLASS MAIL
Andrea Bankes Agency Open Records Officer Department of Human Services Room 234, Health and Welfare Building P.O. Box 2675 Han-isburg, PA 17105 [email protected]
RE: Request for Applications No. 07-19
Dear Ms. Bankes:
Phone: (215) 977-1000 • Fax: (215) 977-1099 www.elliottgrcenlcaf.com
September 9, 2020
This firm represents Aetna Better Health of Pennsylvania Inc. ("Aetna"). Pursuant to the Pennsylvania Right to Know Law, 65 P.S. §67.101, et seq., I hereby request copies of the following public records of the Department of Human Services ("DHS"):
1. That portion of the response ofUnitedHealthcare of Pennsylvania, Inc. ("United") to Request for Applications ("RFA") 07-19 consisting of that applicant's Work Statement Questionnaire Responses to Member Management Question 3 and Care Management Question 7. These aspects of United's application are specifically referenced in United's July 8, 2020 protest as to RFA 07-19, and fo1m the basis of one aspect of that protest.
2. All records reflecting the transmission of the contents or substance of the records described in item No. 1, above, to any DHS employee or representative between December 17, 2019 and July l, 2020.
3. All records reflecting communications between the Secretary of DHS, or her staff, and any managed care organization that submitted a response to RF A 07-19, regarding the concept of "regional councils" to be utilized in connection with the HealthChoices program. This request is limited in time to communications occuning between December 17, 2019 and July 1, 2020.
BLUE BELL HARRISBURG SCRANTON WILKES-BARRE WILMINGTON
Andrea Bankes Request for Applications No. 07-19 September 9, 2020 Page 2
4. All records reflecting communications between the Secretary of DHS, or her staff, and any employee or representative of Health Paiiners Plan, as to the convening of a forum among managed care organizations to discuss the concept of "regional counci ls" in connection with the HealthChoices program.
The Pennsylvania Right to Know Law requires a response time within five (5) business days. However, we request that all responses to these requests be returned prior to any debriefing session to be conducted with Aetna in connection with RF A 07-19. If any requests are denied, please cite each specific exemption that justifies the refusal to release the inf01mation and notify the undersigned of any appeal procedures. Any questions can also be forwarded to the undersigned.
Very truly yours,
Agency Open Records Office P.O. Box 2675 | Harrisburg, PA 17105 | 717.787.3422 | F 717.772.2490 | www.dhs.pa.gov
October 16, 2020 SENT VIA EMAIL Mark J. Schwemler, Esq. Elliott Greenleaf 925 Harvest Drive, Suite 300 Blue Bell, Pennsylvania 19422 Email: [email protected] RE: Right-To-Know Law Request No. 20-RTKL-360 Dear Mr. Schwemler: The Department of Human Services (department) received your request for information pursuant to the Pennsylvania Right-To-Know Law, 65 P.S. §§ 67.101 – 67.3104 (RTKL). On September 16, 2020, an interim communication was sent to you indicating that up to an additional 30 days would be needed to respond to your request. Your Request Your request for records is as follows:
1. That portion of the response of UnitedHealthcare of Pennsylvania, Inc. ("United") to Request for Applications ("RFA") 07-19 consisting of that applicant's Work Statement Questionnaire Responses to Member Management Question 3 and Care Management Question 7. These aspects of United's application are specifically referenced in United's July 8, 2020 protest as to RF A 07-19, and form the basis of one aspect of that protest.
2. All records reflecting the transmission of the contents or substance of the records
described in item No. 1, above, to any DHS employee or representative between December 17, 2019 and July 1, 2020.
3. All records reflecting communications between the Secretary of DHS, or her staff,
and any managed care organization that submitted a response to RF A 07-19, regarding the concept of "regional councils" to be utilized in connection with the HealthChoices program. This request is limited in time to communications occurring between December 17, 2019 and July 1, 2020.
4. All records reflecting communications between the Secretary of DHS, or her staff,
and any employee or representative of Health Partners Plan, as to the convening
,tit pennsylvania ., DEPARTMENT OF HUMAN SERVICES
of a forum among managed care organizations to discuss the concept of "regional councils" in connection with the HealthChoices program.
The Department’s Response to Your Request Part 1 Your request is denied. The records requested are part of the application proposal submitted by United in response to RFA 07-19. Pursuant to the RTKL, “[a] proposal pertaining to agency procurement or disposal of supplies, services or construction” is exempt from the definition of “public record” until “the award of the contract.” 65 P.S. § 67.708(b)(26). See UnitedHealthcare of Pennsylvania, Inc. v. Pennsylvania Dep't of Human Servs., 187 A.3d 1046 (Pa. Cmwlth. 2018). An agreement has not yet been awarded. Part 2 Your request is denied. There is only one record responsive to your request. It is a communication with the evaluation committee about how to access the submitted proposals. Pursuant to the RTKL, “the identity of members, notes and other records of agency proposal evaluation committees established under 62 Pa.C.S. § 513 (relating to competitive sealed proposals)” are exempted from the definition of “public record.” 65 P.S. § 67.708(b)(26). Parts 3 and 4 Your request is granted in part and denied in part. Along with this letter, the department is providing you with records responsive to your request. However, some information has been redacted because it is exempt from disclosure by law, as follows:
• Personal Identification Information: The department has redacted personal identification information from the records. Pursuant to the RTKL, “a record containing all of part of a person’s Social Security number…home, cellular or personal telephone numbers; personal email addresses;…or other confidential personal identification number” is exempt from disclosure. 65 P.S. § 67.708(6)(i)(A).
Duplication Fee The department is permitted to charge up to $.25 cents per page for requested documents. In accordance with the policy that a fee will not be assessed when records are provided electronically, no fee is due.
3
Appeal Rights With regard to records that were not produced within this response, you have a right to appeal in writing to the Executive Director, Office of Open Records (OOR), 333 Market Street, 16th Floor, Harrisburg, PA 17126-0333. If you choose to file an appeal you must do so within 15 business days of the mailing date of this response and send to the OOR:
1. This response; 2. Your request; and 3. The reasons why you think the record is public (a statement of the grounds you
assert for the requested record being a public record) and why you think the department is wrong in its reasons for saying that the record is not public (a statement that addresses any ground stated by the department for the denial, which you are challenging); if the department gave several reasons why the record is not public, state which ones you think were wrong.
All of the above must be submitted in order for the appeal to be valid. The OOR has an appeal form available on its website at: https://www.openrecords.pa.gov/Appeals/HowToFile.cfm. If you have any questions related to this RTKL response, please contact me. Sincerely, Andrea Bankes Agency Open Records Officer Attachments
50 South Sixth Street | Suite 1500 | Minneapolis, MN | 55402-1498 | T 612.340.2600 | F 612.340.2868 | dorsey.com
ALEX P. HONTOS (612) 492-6634
FAX (612) 677-3403 [email protected]
July 8, 2020
Mr. DeShawn Lewis Department of Human Services Office of Administration, Bureau of Procurement & Contract Management Room 824 Health and Welfare Building 625 Forster Street Harrisburg, Pennsylvania 17120 [email protected]
Dear Mr. Lewis:
It is already clear that the process used by the State of Pennsylvania Department of Human Services (“DHS”) Office of Administration, Bureau of Procurement & Contract Management in issuing its HealthChoices awards was fundamentally flawed. In addition, the decision to non-select UnitedHealthcare of Pennsylvania, Inc. (“United”) for further negotiations in all but four zones was arbitrary and capricious. United has identified multiple grounds that independently warrant reversal of the decision to non-select United for four zones:
• DHS changed the readiness review criteria in Request for Application (“RFA”) criteria months after final applications had been submitted and mere weeks before issuing its notices of selection;
• DHS utilized a preference for vertically integrated MCO systems even though the RFA never identified this as a criteria for selection;
• DHS engaged in improper communications and appears to have permitted applicants to alter their applications after the submission date;
• DHS failed to adequately consider negative information related to applicant work- stoppages in violation of the RFA; and
• DHS failed to engage in a competitive award process that is contrary to federal law.
Given the numerous and serious flaws that have been identified to date, United asks DHS to take quick and voluntary corrective action and to avoid a drawn-out protest process.1
1 United respectfully submits this protest even though DHS has not yet made “awards” as contemplated by the RFA to conserve state resources. United has not received responses to its PA Right-to-Know Law requests, submitted to DHS on July 2, 2020, nor has DHS provided the debriefing required by RFA Paragraph I-25. Accordingly, United reserves its right to supplement this protest if and when additional information about DHS’s decisions becomes available.
C]) DORSEY'" always ahead
I. FACTUAL BACKGROUND
The HealthChoices Physical Health Program is Pennsylvania’s (the “PH Program”) statewide mandatory managed care program through which the majority of Medical Assistance (“MA”) beneficiaries receive physical health services. For the most part, the costs, utilization, and quality of the PH Program is carried out by Managed Care Organizations (“MCOs”), which deliver Medical Assistance benefits and additional services through contracts with the State. Indeed, since DHS began contracting with MCOs such as United, the PH Program experienced an improvement in care for populations with chronic and complex conditions, payment incentives aligned with performance goals, and higher accountability for high quality care.
On October 15, 2019, DHS issued Request for Application No. 07-19 (the “RFA”), which sought applicants to serve as MCOs in the following five HealthChoices zones: Lehigh/Capital, Northeast, Northwest, Southeast, and Southwest.2 Within each zone, DHS contemplated multiple MCO awards as follows:
• Southeast: 4-5 • Southwest: 3-5 • Lehigh/Capital: 3-5 • Northwest: 3-4 • Northeast: 3-4
(Exhibit A at 4). The RFA contemplated the award of contracts with an initial term of five years, and an option to extend each contract for an additional three-year period. (Ex. A at I-22.) Between the date of the issuance of the RFA and the date applications were due, the RFA was amended eight times.
In order to submit an application, MCOs needed to adhere to numerous conditions described in the RFA, including requirements regarding information and materials, a description of the services to be provided, eligibility standards, and general evaluation criteria. (Ex. A at I- 1). Specifically, applications were to be evaluated on three technical factors:
2 The issuance of the RFA followed Pennsylvania’s attempts in 2016 and 2017 to award new contracts under Requests for Procurement. As a result, the PH Program currently operates under extensions of contracts originally awarded in 2012.
Factor Weight
Personnel Qualifications and Staffing 5%
Prior Experience and Performance 10%
(Ex. A at II-4.) Further, the RFA provided an additional 3% bonus for Domestic Workforce Utilization. (Ex. A at II-4.) In order to qualify for award selection, an MCO’s raw score for the technical factors needed to reach 75 percent or greater. (Ex. A at II-5.)
By submitting an application, each MCO attested that all information submitted in the application was material and important. (Ex. A at I-23.) This information included, among other things, evidence that the MCO is able to fully execute contractual requirements with integrity and reliability. (Ex. A at II-5). Moreover, each MCO was to ensure compliance “with all federal and Pennsylvania laws…[and laws] governing participation in the MA program.” (Ex. A at I-23 and III-1.) The purpose of the attestation was to allow DHS to rely upon the information in the application in awarding each contract. (Id.) If an application had a nonconformity with the requirements set out in the RFA, DHS reserved sole discretion to waive the nonconformity, allow the MCO to cure the nonconformity, or to “consider the nonconformity in the scoring of Applicant’s application.” (Ex. A at II-2.) To be deemed responsible, an applicant must “submit a responsible application and possess the capability to fully perform the Agreement requirements in all respects and the integrity and reliability to result in good faith performance of the Agreement.” (Ex. A at II-5.)
If a potential applicant needed any additional information about the RFA, the sole point of contact authorized by the RFA was Karen Kern at [email protected]. (Ex. A at I-2.) Questions were due by or before November 5, 2019. (Ex. A at 5.) Other than this process, the RFA contemplated communication between potential applicants and DHS only through Best and Final Offers and contractual negotiations.
A successful applicant would be notified that it was selected for negotiations. (Ex. A at I- 24(A).) Applicants were to be informed of selections for negotiation by April 1, 2020. After negotiations were completed and agreements were signed, the RFA provides that unsuccessful applicants would be notified of the award decision. (Ex. A at I-24(B).)
Responses to the RFA were due on December 17, 2019. (Ex. A at 5.) The deadline was extended to January 6, 2020. (Exhibit B, Addendum 8.) United timely submitted its application and, on July 1, 2020, received a letter stating that DHS selected United’s application for the Southeast Zone for agreement negotiations, but no other zones. (Exhibit C.) That same letter listed the applicants chosen for negotiation in each other zone. Also on July 1, DHS issued a corrected letter clarifying a typing error. (Exhibit D.) The other MCOs selected for further negotiations were:
CJ» DORSEY" always ahead
MCO Zones
Northwest, Southwest, Southeast
Northwest, Southwest, Southeast Gateway Health Plan Lehigh/Capital, Southwest
This letter protest is submitted on July 8, seven days after United was informed that it was not selected for negotiation in four of the five zones and after United learned the identity of the MCOs that DHS contemplated negotiating with in those zones.
II. LEGAL FRAMEWORK
In the context of competitive awards3, an agency must adhere to the terms of the solicitation document throughout the evaluation process. See Lagsday v. Allegheny Cty., 453 A.2d 949, 954 (Pa. 1982); accord Weathers v. Sch. Dist. of Phila., 383 F. Supp. 3d 388, 403 (E.D. Pa. 2019) (explaining that agency is obligated to adhere to solicitation documents). Likewise, an award cannot be made that is the product of extraneous or unstated award criteria that are not found in the solicitation document. See D'Eramo v. Allegheny Cty., 37 A.3d 84 (Pa. Commw. Ct. 2012) (affirming injunctive relief due to deviations from the solicitation’s mandatory award criteria). Deviations from the requirements of competitive awards are prohibited “even where there is no evidence of fraud or favoritism.” Hanisco v. Township of Warminster, 41 A.3d 116, 123 (Pa. Commw. Ct. 2012). These requirements are in place “for the purpose of inviting competition, to guard against favoritism, improvidence, extravagance, fraud and corruption.” Yohe v. Lower Burrell, 208 A.2d 847, 850 (Pa. 1965) (internal quotations omitted).
Agency action—like the decision to non-select United here—cannot be arbitrary, capricious, or contrary to law. See, e.g., Cary v. Bureau of Prof'l & Occupational Affairs, State Bd. of Med., 153 A.3d 1205, 1210 (Pa. Commw. Ct. 2017). An arbitrary-and-capricious decision is one that, for example, is “unsupportable on any rational basis because there is no evidence upon which the action may be logically based.” Id. An agency must “examine relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Id. (internal citations omitted).
3 Although the intent of the RFA is to award a grant, the Pennsylvania Procurement Code nonetheless applies to competitive solicitations for MCOs. Aetna Better Health of Pa. Inc. v. Dep't of Human Servs., 2016 Pa. Commw. Unpub. LEXIS 1120, at *36-37 (Pa. Commw. Ct. July 19, 2016).
CJ» DORSEY" always ahead
III. PROTEST GROUNDS
DHS’s decision to non-select United—and to proceed with negotiations with other applicants in those regions—was contrary to applicable law and arbitrary and capricious for several independent reasons.
1. DHS Deviated from the RFA’s Terms a. Readiness Review
The RFA contemplated a rigorous “Readiness Review” process to vet potential MCO awardees for “each HC Zone for which the [MCO] was selected for negotiations.” (Ex. A. at III- 7.B; see also id. at I-21.) During the Readiness Review, DHS “will assess a selected [MCO’s] readiness to provide required services in compliance with Agreement requirements.” DHS anticipated that this Readiness Review would “will last approximately six (6) months.” (Id.) Failure to complete the Readiness Review to DHS’s satisfaction would preclude the MCO from obtaining an award. (Id.; see also id. II-6 (“If a selected Applicant does not complete the Readiness Review to DHS’s satisfaction for some or all of the Zones for which it was selected for negotiations, DHS will not permit the Applicant to provide program services to MA beneficiaries and will not proceed to the operational phase of the Agreement with the Applicant for the applicable Zones.”)).
But long after the RFA’s deadline for applications, DHS abruptly changed course on the Readiness Review process—effectively re-writing the RFA in the process to provide more time for applicants who were unprepared or unable to conduct the Readiness Review. During a routine meeting on May 6, 2020 between United and DHS, the DHS staff disclosed that while there was “no news on the RFA,” DHS was considering an attestation process to make the review easier and faster for health plans already serving in Health Choices. Then, DHS indicated that it was dropping the Readiness Review altogether in favor of selected applicants submitting self-attestations to their readiness to serve millions of beneficiaries. This decision follows conceded concerns that some of the selected applicants were unprepared to undertake their Readiness Review. DHS officials have long complained about the readiness of certain applicants to perform the HealthChoices award. For example, on November 18, 2016, DHS’s Allen Fisher wrote in an email message to David Evans that he had concerns about Geisinger’s preparedness to begin work on time. (Exhibit E.)
It is evident that DHS intends to depart from the RFA’s terms given the recent decision by DHS to extend incumbent contracts. Specifically, in June 2020, just one business day before DHS announced which applicants would enter the negotiation phase, DHS required United to extend its existing awards until the earlier of December 31, 2021 or until DHS completed
July 8, 2020 Page 6 negotiations and awards under the RFA. DHS is not free to re-write the RFA’s award process mid-stream—and there cannot be a “competitive” process if DHS is putting its finger on the scale of the competition by buying more time for unprepared MCOs. See, e.g., Lagsday, 453 A.2d at 954; Hanisco, 41 A.3d at 123.
b. DHS Favored Vertically Integrated Insurer/Hospital Systems— a Preference Not Articulated in the RFA’s Evaluation Criteria.
Part II of the RFA lists the criteria that DHS must use to evaluate the Applications. The RFA contains no language that expresses a requirement, much less a preference, for applications from vertically-integrated systems of hospitals of insurers. Indeed, the RFA does not state a preference for any particular business structure. Per the terms of the RFA, 100% of the possible points came from the Soundness of Approach, Personnel Qualifications and Staffing, and Prior Experience and Performance categories. (Ex. A at II-4.) And the only bonus points available were for Domestic Workforce Utilization. (Ex. A at II-4.) Any award arising from DHS’s deviation from the criteria in the RFA is arbitrary and contrary to law. See, e.g., Hanisco, 41 at 123.
Such a deviation occurred here—DHS clearly, during the evaluation, preferred vertically- integrated systems of hospitals and insurers. Three of the four applicants selected for statewide negotiation are vertically integrated hospital/insurer systems: UPMC, Geisinger, and Health Partners. This preference was found nowhere in the RFA documents and caused DHS to select these applicants to the exclusion of other applicants.
This preference was so significant that it even overcame DHS’s stated evaluation factors. For example, Geisinger and Health Partners lack experience in the PH program outside of their existing geographic footprint, as shown here:
July 8, 2020 Page 7
See Statewide Managed Care Map, available at: https://www.dhs.pa.gov/providers/ Providers/Pages/Statewide-Managed-Care-Map.aspx (last visited July 7, 2020). This map shows that Health Partners and Geisinger both only have experience operating one Zone—a far cry from the statewide operations they will be expected to undertake as a result of this selection process. Prior Experience and Performance, which counts for 10% of an applicant’s score, only has a few evaluation factors, one of which is “experience in Medicaid managed care systems, and in the operation of managed care medical programs”. (Ex. A at II-4.) Given Geisinger and Health Partners’ lack of experience, this crucial factor evidently was not weighted appropriately. Applicants with low scores in the Prior Experience and Performance category would have a mountain to climb to defeat more experienced and higher-scoring applicants—indicating that this category was not scored appropriately.
2. DHS Used Unstated Evaluation Criteria to Assess Proposals—and Engaged in Improper Communications With Applicants
In making competitive awards, an agency cannot use unstated or secret evaluation criteria. See D'Eramo, 37 A.3d at *28; see also Lab. Corp. of Am. Holdings v. United States, 116 Fed. Cl. 643, 650 (Fed. Cl. 2014); 62 Pa.C.S. § 513(e). Indeed, a prior iteration of this competition was cancelled and re-issued on July 21, 2016 following a court order enjoining execution of any agreement related to that RFP because of concerns about DHS’s use of an
July 8, 2020 Page 8 unstated criteria that it called “Heritage Factor.” Aetna Better Health of Pa., Inc. v. Commonwealth, 186 A.3d 575, *9 (Pa. Commw. Ct. 2018).
Nor can an agency engage in improper communications with applicants. See UnitedHealthcare of Pa., Inc. v. Dep't of Human Servs., 186 A.3d 573, *35 (Pa. Commw. Ct. 2018) (Department had improper contacts between DHS and an offeror’s executives after bids were opened but before responsible offerors were determined); see also Aetna, 186 A.3d at *37-38 (same). Separately, an agency cannot share advantageous features from one applicant with another applicant and ask the second applicant to revise its proposal. See Am. Totalisator Co. v. Seligman, 34 Pa. Commw. Ct. 391, 429 (1978) (quoting Louchheim v. Philadelphia, 218 Pa. 100 (1907)) (“Private negotiations between [the agency] and a successful bidder through which the terms and conditions of the competitive bids are modified or changed, resulting either to the advantage or disadvantage of the [agency], are not within the spirit and purpose” of a competitive process); 62 Pa.C.S. § 513(f).
DHS appears to have violated these same principles again in conjunction with the current award process. For example, DHS informally revised the terms of the RFA after submissions. In its RFA response, United proposed an innovative feature to cultivate Accountable Communities of Health. (See, e.g., UnitedHealthcare of Pennsylvania’s Proposal in Response to Request for Applications 07-19, Work Statement Questionnaire Responses to Member Management Question 3 and Care Management Question 7.) DHS apparently liked this offering in United’s application—so much it relabeled it as a “regional council” and then shared it, post-bid, with other applicants in the apparent hope that others would sweeten their applications with something similar. But in June 2020—months after the due date for applications had passed—the Secretary pushed for MCO participation in a regional council. (Exhibit F.) This was improper. See 62 Pa.C.S. § 513(f) (“In conducting discussions, there shall be no disclosure of any information derived from proposals submitted by competing offerors.”). Several weeks before the award announcement or the contract extensions, the Secretary and her staff joined a PAMCO meeting to state her expectations for MCO community engagement. When asked for clarification, DHS noted that the expectations would begin in 2021, i.e., during the period of performance under the RFA. Shortly thereafter, in late June 2020, the Secretary and her staff summoned the CEOs of each MCO in individual meetings to respond to DHS’s vision for “regional councils.” DHS set the expectation that applicant “decision makers” must attend these meetings and be prepared to make commitments to the program. Shortly after Health Partners’ Plan’s meeting, and prior to the award announcement, HPP staff emailed all MCOs statewide noting that they would be convening a forum in response to the Secretary’s vision on regional councils. And, one week later, Health Partners’ Plans was selected to conduct negotiations for a statewide contract. DHS effectively permitted Health Partners’ Plans to change its proposal after the fact to incorporate an idea in United’s proposal. Apart from the
July 8, 2020 Page 9 DHS-initiated contact with an applicant during a blackout period, DHS apparently sought to either re-write its own RFA after the submittal of applications or sought to extract additional post-application features from individual applicants found nowhere in the RFA.
This was part of a clear pattern of improper communications. To give another example: the Secretary of Human Services, in an unsolicited email to the United CEO in November 2019, referenced an article in Bloomberg about United’s work on housing for the homeless, and expressed a wish for United to bring this model to PA.
These DHS communications raise concerns about improper ex parte contacts with individual applicants, reveal that there were two yardsticks—one as articulated in the RFA, and another separate set of criteria and features that DHS was using to evaluate applicant proposals. And it is clear, given DHS’s decision to non-select United for four regions, that the second set of criteria infected DHS’s decision. These unstated evaluation criteria are plainly improper, and DHS should sustain this protest and re-score proposals consistent with the stated evaluation criteria. See D'Eramo, 37 A.3d at *28; see also Lab. Corp. of Am. Holdings, 116 Fed. Cl. at 650.
3. Applicants Failed to Disclose—or DHS Failed to Adequately Consider—Negative Information About Work Stoppages that Materially Increases the Risks of Performance
Section III-7 of the RFA recognizes that the provisions of the draft Agreement (Appendix A) will become part of DHS’s ultimate agreement with a successful applicant. Sub-Section III-7(A) states:
A. A description of the anticipated requirements for the provision of Physical Health services to MA beneficiaries for the HealthChoices Program is set forth in the draft Agreement (Appendix A). The provision of this RFA and its Appendices will become a part of the HealthChoices agreement.
(Ex. A at III-7(A)) (emphasis added).) In addition, in Section III-8 the RFA makes clear that “The Applicant shall not request changes to the other provisions of the RFA [other than in Exhibits D or E of the draft agreement], nor shall the Applicant request to completely substitute its own terms and conditions,” and “The Department will reject any application that is conditioned on the negotiation of the terms and conditions.” (Ex. A at III-8.)
In the draft agreement in Appendix A to the RFA, Section V’s “Program Requirements” includes the following regarding the applicant’s “Provider Network”:
The PH-MCO may not include in its network any Provider with a history of one or more work stoppages during the five years
July 8, 2020 Page 10
immediately preceding the Effective Date of this Agreement, unless the Provider is or becomes a signatory to a valid collective bargaining agreement or is or becomes a signatory to a labor peace agreement with any labor organization that informs the Provider that it is seeking to represent the Provider’s employees at any site in the PH-MCO’s network that delivers services to HealthChoices enrollees. Such agreement, which is intended to prevent service disruptions to the PH-MCO’s members caused by employee unrest or dissatisfaction, must contain (1) a provision prohibiting the labor organization and its members, and in the case of a collective bargaining agreement, all employees covered by the agreement, from engaging in work stoppages, boycotts, or other economic interference with the Provider’s provision of HealthChoices services at the facility for the duration of the time covered by this Agreement; and (2) the Procedures that the Provider and labor organizations shall use to negotiate and resolve disputes relating to employment conditions, including but not limited to a requirement that all such unresolved disputes be submitted to final binding arbitration.
(Ex. B § S (emphasis added).) DHS clarified, through its answers to Additional Question No. 259, that “[a] work stoppage refers to the temporary cessation of work as a form of protest and can be initiated by either employees or company management.” (Ex. B Question No. 259.)
At least one of the applicants had an impermissible work stoppage in the relevant time period. See UPMC workers and patients protest board meeting, Pittsburgh’s Action News 4 (May 28, 2019), available at https://www.wtae.com/article/upmc-workers-one-day-strike-protest- board-meeting/27612682 (last visited July 5, 2020). With the Effective Date of the anticipated agreements to occur on January 1, 2021, (see Ex. A at I-3), this work stoppage falls within “the five years immediately preceding the Effective Date of this Agreement,” (Ex. B § S.)
As a result, UPMC had to already be, or become, “a signatory to a valid collective bargaining agreement” or “a signatory to a labor peace agreement with any labor organization that informs the Provider that it is seeking to represent the Provider’s employees at any site in the PH-MCO’s network that delivers services to HealthChoices enrollees.” (Ex. B § S.) UPMC does not currently have any such agreement and, based on the tortured history of labor negotiations with UPMC, it is unforeseeable that it will be able to obtain any such agreement. See, e.g., In rift over UPMC hospital, a union and mayor expose split views, Pittsburg Post-Gazette (Aug. 30, 2018), available at https://www.post- gazette.com/business/career-workplace/2018/08/30/SEIU-Bill-Peduto-UPMC- hospitals/stories/201808210128 (last visited July 8, 2020). DHS’s failure to disqualify UPMC on
July 8, 2020 Page 11 this basis, or to adequately consider and reduce UPMC’s score as a result, was arbitrary, capricious, contrary to law, and contrary to the terms of its own RFA.
Moreover, DHS’s conduct effectively imposed an improper basis for the award of a state contract. DHS made billions of dollars contingent on UPMC’s willingness to enter into an agreement, and in an effort to force UPMC to do so, DHS selected UMPC’s application for negotiations for all five HealthChoices Zones, making it clear that DHS is focused on including UPMC as an awardee and forcing it into a collective bargaining or similar agreement. The collective-bargaining criteria, which applied to some but not all applicants, appears to have been used to force UPMC into such an agreement. Because a contract cannot be awarded for reasons outside of the terms of the RFA, DHS’s decision to award the contract to UPMC to force it into a collective-bargaining agreement was improper. D'Eramo, 37 A.3d at *28.
4. DHS’s Failure to Engage in a Competitive Award Process May Result in
Termination of Federal Funding.
States with managed care program through which Medical Assistance beneficiaries receive health services receive federal reimbursement if certain statutory compliance requirements are met. See 42 U.S.C. §§ 1396a, 1396n. Failure to comply with these terms may result in termination of federal reimbursement. See Bowen v. Massachusetts, 487 U.S. 879, 885 (1988).
States may apply for a waiver of these requirements, 42 U.S.C. § 1396n(b), which Pennsylvania did for the HealthChoices Program. (Exhibit G.) As part of that waiver application, the State agreed to select contractors using a competitive procurement process. (Ex. G at 10.) CMS approved that application, presumably conditioned on the representations in that application. But, as demonstrated throughout this letter, DHS did not abide by the terms of the RFA in a number of non-competitive ways. It thereby failed to use a competitive award process.
DHS’s failure is a violation of the waiver application, rendering the resulting approval of the waiver application illegitimate. Because Pennsylvania has been operating under the assumption that certain terms of §§ 1396a and 1396n are waived, any issue with the waiver would likely make Pennsylvania noncompliant and would result in termination of federal reimbursement. Bowen, 487 U.S. at 885. To ensure that its federal funding is maintained, DHS should reissue this RFA and engage in a truly competitive award process.
IV. CONCLUSION
United values its long-standing relationship with the Commonwealth of Pennsylvania. United submitted an application that best addressed DHS’s RFA and the needs of Pennsylvania MA beneficiaries. But this award process was beset by irregularities and inconsistencies. DHS’s decision to non-select United for further negotiations was, as a result, arbitrary and capricious. United respectfully requests that DHS enter into negotiations with United in each Zone. Failing that, DHS should reverse its selection decision and reprocure its requirements on an expedited basis and in a manner consistent with competitive principles. United looks forward to DHS’s response and expects it to adhere to the mandatory stay of performance pending resolution of this protest.
Cordially yours,
TABLE OF CONTENTS Exhibits to UnitedHealthcare of Pennsylvania Bid Protest Dated 7/8/20
Exhibit No. Title/Description
A Pennsylvania Department of Human Services Request for Applications No. 07-19
B Excerpts from Appendices and Addenda to Request for Applications No. 07-19
C July 1, 2020 Letter from Pennsylvania Department of Human Services to
UnitedHealthcare of Pennsylvania
D Corrected July 1, 2020 Letter from Pennsylvania Department of Human Services to UnitedHealthcare of Pennsylvania
E November 18, 2016 Emails Between David Evans and Allen Fisher
F June 8, 2020 Email from Michele Messinger to Allison Davenport
G Section 1915(b) Waiver Proposal for Pennsylvania MCO Program
EXHIBIT A
Pennsylvania Department of Human Services Request for Applications No. 07-19
i
Managed Care Organizations to Provide Physical Health Services in the Commonwealth of Pennsylvania in the Five HealthChoices Zones:
Southeast Zone, Southwest Zone, Lehigh-Capital Zone, Northwest Zone, Northeast Zone
ISSUING OFFICE
Commonwealth of Pennsylvania Department of Human Services
Bureau of Procurement and Contract Management Room 824 Health and Welfare Building
625 Forster Street Harrisburg, PA 17120
RFA NUMBER
ii
REQUEST FOR APPLICATIONS FOR HEALTHCHOICES PHYSICAL HEALTH SERVICES IN ALL
ZONES COMMONWEALTH-WIDE
TABLE OF CONTENTS
CALENDAR OF EVENTS Page v Part I GENERAL INFORMATION 1 I-1 Purpose 1 I-2 Issuing Office 1 I-3 Overview of the Project 1 I-4 Type of Agreement 4 I-5 Rejection of Applications 6 I-6 Incurring Costs 6 I-7 Pre-Application Conference 6 I-8 Questions and Answers 6 I-9 Addenda to the RFA 7 I-10 Response Date 7 I-11 Application Requirements 7 I-12 Economy of Preparation 11 I-13 Alternate Applications 11 I-14 Discussions for Clarification 11 I-15 Oral Presentations 11 I-16 Prime Applicant Responsibilities 11 I-17 Application Contents 11 I-18 Best and Final Offers 12 I-19 News Releases 13 I-20 Restriction of Contact 13 I-21 Issuing Office Participation 13 I-22 Term of Agreement 14 I-23 Applicant’s Representations and Authorizations 14 I-24 Notification of Selection 15 I-25 Debriefing Conferences 15 I-26 RFA Protest Procedure 16 I-27 Use of Electronic Versions of this RFA 16 I-28 Information Technology Policies 16
and Negotiations
iii
Part II CRITERIA FOR SELECTION 18 II-1 Mandatory Responsiveness Requirements 18 II-2 Technical Nonconforming Applications 18 II-3 Evaluation 18 II-4 Evaluation Criteria 18
A. Technical 18 B. Domestic Workforce Utilization 19
II-5 Applicant Responsibility 20 II-6 Final Ranking and Award 20
PART III TECHNICAL SUBMITTAL 22 III-1 Nature and Scope of the Project 22 III-2 Zone of Operation 22 III-3 Management Summary 22 III-4 Qualifications 22
A. Corporate Background 22 B. Corporate Experience 23 C. Personnel 24
III-5 Financial Capability 27 III-6 Work Statement Questionnaire 30 III-7 Requirements 41 III-8 Objections and Additions to Standard Grant Terms and
Conditions 43
45
IV-1 Small Diverse Business Participation Packet 45 IV-2 SDB Participation Goal 45 IV-3 Agreement Requirements – SDB Participation 45
PART V CONTRACTOR PARTNERSHIP PROGRAM 49
V-1 General Information 49
V-2 Participation Requirements 49
V-3 RFA Requirements 49
V-4 Agreement Requirements 50
iv
APPENDICES
APPENDIX A Draft Healthchoices Agreement APPENDIX B Financial Data APPENDIX C Federal Funding Accountability and Transparency Act Sub-
Recipient Data Sheet APPENDIX D Application Cover Sheet APPENDIX E Trade Secret Confidential Proprietary Information Notice
Form APPENDIX F Applicant’s Managed Care Experience and References APPENDIX G Executive Staff and Key Administrative Personnel Checklist APPENDIX H Ownership Structure and Related Information APPENDIX I Domestic Workforce Utilization Certification APPENDIX J Small Diverse Business Participation Summary Sheet APPENDIX K Small Diverse Business (SDB) Participation Packet
SDB-1 Instructions for Completing the SDB Participation Submittal and SDB Utilization Schedule SDB-2 Participation Submittal SDB-3 SDB Listing SDB-4 Letter of Commitment SDB-5 Guidance for Documenting Good Faith Efforts to Meet the SDB Participation Goal SDB-6 Good Faith Efforts Documentation to Support Waiver Request of SDB Participation Goal
APPENDIX L Lobbying Certification and Disclosure of Lobbying Activities APPENDIX M Quality and Performance Management
HEDIS®* & CAHPS®** Template APPENDIX N Model Form of Small Diverse Business Subcontract
Agreement APPENDIX O Management Directive 205.34 Commonwealth of
Pennsylvania Information Technology Acceptable Use Policy
* The Healthcare Effectiveness Data and Information Set (“HEDIS®”) is a registered trademark of the National Committee for Quality Assurance (“NCQA”).
** The Consumer Assessment of Healthcare Providers and Systems (“CAHPS®”) is a registered trademark of the Agency for Healthcare Research and Quality.
•
• • • •
•
CALENDAR OF EVENTS
The Commonwealth will make every effort to adhere to the following schedule:
Activity Responsibility Date
Potential Applicants
Pre-Application Conference
Rachel Carson State Office Building - Auditorium 400 Market Street Harrisburg, PA 17101
DHS/ Potential
Answers to Potential Applicant questions posted to the DGS website http://www.emarketplace.state.pa.us/Search.aspx.
DHS November 19, 2019
Potential Applicants Ongoing
Sealed application must be received by the Issuing Office at:
Commonwealth of Pennsylvania Department of Human Services Bureau of Procurement & Contract Management Room 824 Health and Welfare Building 625 Forster Street Harrisburg, PA 17120
Applicants December 17, 2019 @ 12:00 PM EST
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PART I
GENERAL INFORMATION
I-1. Purpose. This request for applications (“RFA”) provides to those interested in submitting applications for the subject procurement (“Applicants”) sufficient information to enable them to prepare and submit applications for consideration by the Department of Human Services (“Department” or “DHS”) on behalf of the Commonwealth of Pennsylvania (“Commonwealth”) to satisfy a need for Commonwealth licensed Health Maintenance Organizations (“HMOs”) to operate as Managed Care Organizations (“MCOs”) in the HealthChoices Physical Health (“PH”) Program in the five (5) HealthChoices Zones (“Project”). This RFA contains instructions governing the requested applications, including the requirements for the information and material to be included; a description of the services to be provided; requirements that Applicants must meet to be eligible for consideration; general evaluation criteria; and other requirements specific to this RFA.
I-2. Issuing Office. The DHS Office of Administration, Bureau of Procurement and Contract Management (“Issuing Office”) has issued this RFA on behalf of the Commonwealth. The sole point of contact in the Commonwealth for Applicants for this RFA shall be Karen Kern, RA- [email protected], the Issuing Officer for this RFA. Please refer all inquiries to the Issuing Officer.
I-3. Overview of the Project. The HealthChoices PH Program is the Commonwealth’s statewide mandatory managed care program through which the majority of Medical Assistance (“MA”) beneficiaries receive their physical health services. The Department is issuing this RFA to procure the services of MCOs to provide HealthChoices PH Program services to MA beneficiaries in the five HealthChoices Zones, which cover all 67 counties of the Commonwealth. In issuing this RFA, the Department’s objectives are to improve the HealthChoices Program and accomplish the following:
• Promote achievement of Triple Aim (better health, better care, lower costs); • Provide high quality healthcare services to MA beneficiaries; • Improve care coordination between physical and behavioral health services; • Promote the expansion of value-based purchasing of healthcare services; • Promote the expansion of team-based approaches to care delivery (i.e. patient centered
medical homes); • Promote Community-based public health initiatives; • Increase consumer access to needed services, especially in rural and underserved areas of
the Commonwealth; • Increase consumer access to needed services, including services to mitigate social
determinants of health; • Improve the efficiency of the HealthChoices Program; and • Improve the provider experience with the HealthChoices Program.
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To achieve these goals, selected MCOs must be as flexible and adaptable as possible, and demonstrate the ability to coordinate services across multiple programs, including programs whose focus is broader than the delivery of physical healthcare services. Selected MCOs will be challenged to assist their members in new ways to overcome personal barriers and ultimately to be self-sufficient, informed purchasers of services.
As part of such new approaches to service coordination and delivery, the Department may include additional populations to be served or modify benefit packages to be delivered. In developing the HealthChoices PH program, the Department will maintain its focus on the provision of services that will achieve the objectives listed in this section.
The HealthChoices PH Program is currently operational in all 67 counties that comprise five (5) geographic Zones. HealthChoices is the sole program option for the majority of MA consumers residing in these five Zones.
67 Counties in five (5) Zones
The HealthChoices PH Program operates statewide in the following five (5) geographic Zones. Each Zone is considered one combined service area, requiring that a selected PH-MCO be able to provide the HealthChoices services required under this RFA and Agreement in all counties of a Zone for which it has an Agreement.
A. The Southeast Zone (“SE”) includes Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties.
B. The Southwest Zone (“SW”) includes Allegheny, Armstrong, Beaver, Bedford, Blair, Butler, Cambria, Fayette, Greene, Indiana, Lawrence, Somerset, Washington, and Westmoreland Counties.
C. The Lehigh/Capital Zone (“L/C”) includes Adams, Berks, Cumberland, Dauphin, Franklin, Fulton, Huntingdon, Lancaster, Lebanon, Lehigh, Northampton, Perry, and York Counties.
D. The Northwest Zone (“NW”) (formerly New West) includes Cameron, Clarion, Clearfield, Crawford, Elk, Erie, Forest, Jefferson, McKean, Mercer, Potter, Venango, and Warren Counties.
E. The Northeast Zone (“NE”) (formerly New East) includes Bradford, Carbon, Centre, Clinton, Columbia, Juniata, Lackawanna, Luzerne, Lycoming, Mifflin, Monroe, Montour, Northumberland, Pike, Schuylkill, Snyder, Sullivan, Susquehanna, Tioga, Union, Wayne, and Wyoming Counties.
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Population projections for the HealthChoices PH Program can be uncertain and can be affected by changes in the economy, law and regulations, and policies. The Department publishes monthly and historical enrollment reports capturing many specific geographic and statistical elements. These reports can be reviewed at http://www.dhs.pa.gov/provider/healthcaremedicalassistance/managedcareinformation/i ndex.htm.
Population – July 2019 Member Months
The groupings include Temporary Assistance Needy Families/Modified Adjusted Gross Income (“TANF/MAGI”), Supplemental Security Income/Breast and Cervical Cancer (“SSI/BCC”), and adults ages 19 to 64 newly eligible due to Medicaid expansion (“Newly Eligible”). The TANF/MAGI includes all “Under Age 1” beneficiaries. The Department anticipates that these populations may be relatively stable in the future.
Zone TANF/MAGI SSI/BCC Newly Eligible Grand Total Southwest 233,707 80,557 148,780 463,044 Southeast 430,722 116,222 269,523 816,467 Lehigh/Capital 276,089 73,420 143,236 492,744 Northeast 169,614 46,432 100,704 316,750 Northwest 82,348 27,499 47,495 157,342 Grand Total 1,192,480 344,130 709,738 2,246,348
Note: Some totals do not sum due to rounding.
Appendix B: Financial Data Appendix B includes average rates paid to the MCOs for the CY 2018 Agreement Year in the groupings shown above. Appendix B also includes information about the composition and development of the 2020 rates.
Applicants are not required to submit an application for all Zones but may apply for one, several or all Zones.
Certificate of Authority and County Operational Authority, Provider Enrollment
Participation in the HealthChoices PH Program will be limited to Commonwealth-licensed HMOs. All MCOs awarded an agreement for the HealthChoices PH Program for any Zone will be required to have a Certificate of Authority to operate as an HMO in Pennsylvania, as well as Pennsylvania Department of Health (“DOH”) operating authority in each county in each Zone for which they are selected. A selected Applicant must obtain its Certificate of Authority and operating authority for each county in the Zone(s) for which it has been selected
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no later than three (3) months prior to the date on which the selected Applicant begins to provide services to program beneficiaries (referred to as either the “Operational Date” or “Effective Date” of the Agreement), currently anticipated to be 01/01/2021. Please note that the Effective Date is subject to change. Selected Applicants must provide to the Department, through the Managed Care Operations Chief, a copy of their Certificate of Authority to operate as an HMO in Pennsylvania, as well as a copy of the correspondence from the Pennsylvania DOH granting operating authority in each county in the Zone(s) for which they were selected.
As are all providers of MA services, selected Applicants must be MA enrolled providers in the Pennsylvania MA Program or be eligible to enroll and enroll in the MA Program as part of Readiness Review.
Each employee, representative or agent of the Applicant who will require access to Commonwealth Information Technology (“IT”) resources to research or prepare the Technical Submittal, such as access to the HealthChoices Extranet to view information referenced in Appendix A draft HealthChoices Agreement, must be registered with and approved by the Commonwealth to do so. To accomplish this, one Applicant designated representative must complete and sign a hard copy of the “Commonwealth IT Resource Acceptable Use Policy User Agreement – Commonwealth Contractor or Consultant” form located in Appendix O “Commonwealth IT Resource User Agreement”. The completed form must be returned to Karen Kern, the Issuing Officer at [email protected]. After the Applicant is registered and approved as an organization to be granted this access, each individual who requires access will need to complete an online registration process, including the completion of an electronic version of the “Commonwealth IT Resource User Agreement”. Detailed instructions for the completion of the User Agreements and the registration process are set forth in Appendix O.
I-4. Type of Agreement. If the Department enters into Agreements as a result of this RFA, they will be full risk, capitated Agreements. Regardless of the number of Zones that are awarded to an MCO, the Department will have one (1) Agreement with the MCO that covers all awarded Zones. Please see Appendix A for a draft Agreement.
As a result of this procurement, the Department anticipates awarding the following numbers of MCOs in each Zone:
A. Southeast Zone: 4-5 MCOs B. Southwest Zone: 3-5 MCOs C. Lehigh/Capital Zone: 3-5 MCOs D. Northwest Zone: 3-4 MCOs E. Northeast Zone: 3-4 MCOs
In determining the number of MCOs to be awarded in each Zone, the Department will consider the MA population of a Zone, the Department’s experience with the HealthChoices PH Program, and the ability of a Zone to support multiple MCOs.
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The Department may enter into additional agreements with additional qualified PH-MCOs in future years.
The Department will pay each selected PH-MCO using a schedule of per member per month (“PMPM”) capitation rates. The Department may make other types of payments, as provided in the final Agreement.
Supporting information related to HealthChoices PH program costs and rates is included in Appendix B, Financial Data. This historic information does not necessarily predict the revenue that the Department will provide in its final Agreements with the selected MCOs.
Agreement pricing for the initial agreement year
This RFA does not require a cost proposal. The Department’s actuary will provide a set of actuarially sound rate ranges for the initial program rating period. The most recent Data Book prepared by the Department’s actuary can be found on the Department’s website at the following link: http://www.dhs.pa.gov/provider/healthcaremedicalassistance/managedcareinformation/index. htm
The Department’s actuary will, at a later date, prepare a Data Book for the first Agreement year.
The Department will share the rate ranges and supporting documentation with selected Applicants prior to negotiations over financial terms.
The Department anticipates that the initial Agreements will include:
• Capitation rates for two geographic rating areas within each of the five HealthChoices Zones • Risk adjustment of capitation rates (see section below) • Maternity care payments • High Cost Risk Pools (not immediately applicable to a new entrant) • Home Nursing Risk Sharing • Hepatitis C Quality Risk Pools • Under Age One Risk Sharing • Specialty Drug Risk Sharing and Quality Risk Pools • Pay for Performance incentives
The Department will determine a date by which Agreement negotiations must be completed and Agreements must be signed by the selected Applicants. If a selected Applicant does not accept the Department’s final rate offer for a Zone, the Department may, in its sole discretion, reject its application for all or some of the Zones for which it was selected.
Agreement pricing for years subsequent to the initial year and beyond:
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For subsequent program years, the Department plans to provide each selected PH-MCO with a financial proposal that includes a rate offer with supporting documentation prior to the annual negotiation of Agreement terms. The Department may change the process as needed to accommodate changes in Centers for Medicare & Medicaid Services (“CMS”) requirements and changes in the Department’s objectives and practices.
Risk Adjustment
The Department anticipates that most capitation rates paid to the PH-MCOs in the HealthChoices PH Program will be subject to risk adjustment. Risk adjustment is a process where capitation payments made to the PH-MCOs are adjusted based on the relative health risk of each PH-MCO’s members. The Department has used risk adjustment to adjust capitation payments in its HealthChoices program since 2003, and plans to continue this practice into the foreseeable future.
The most recent version of the Risk Adjusted Rates (“RAR”) Manual, HealthChoices Risk Adjusted Rates Manual – Version 2018 can be found in Appendix B.
The RAR Manual provides in-depth documentation of the risk adjustment process utilized in the HealthChoices program. The attached RAR Manual reflects the current process. The Department may make changes to the risk adjustment process that it determines to be appropriate. The Department will provide comprehensive documentation with timely updates to each selected PH-MCO on the risk adjustment method.
I-5. Rejection of Applications. The Department may, in its sole and complete discretion, reject any application received as a result of this RFA.
I-6. Incurring Costs. The Department is not liable for any costs the Applicant incurs in preparation and submission of its application, in participating in the RFA and Readiness Review processes or in anticipation of Agreement award.
I-7. Pre-Application Conference. The Department will hold a Pre-Application conference as specified in the Calendar of Events. The purpose of this conference is to provide an opportunity for clarification of the RFA. Applicants should forward all questions to the RFA Issuing Officer in accordance with Part I, Section I-8 to allow for adequate time for analysis before the Department provides an answer. Applicants may also ask questions at the conference. The Pre- Application conference is for information only. Any answers furnished during the conference will not be official until they have been verified, in writing, by the Department. Attendance at the Pre-Application Conference is optional, but strongly encouraged.
I-8. Questions & Answers. If an Applicant has any questions regarding this RFA, the Applicant must submit the questions by email (with the subject line “RFA #07-19 Question”) to the Issuing Officer named in Part I, Section I-2 of the RFA. If the Applicant has questions, they must be submitted via email no later than the date indicated on the Calendar of Events. The Applicant shall not attempt to contact the Issuing Officer by any other means. The Department
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will post the answers to the questions on the Department of General Services (“DGS”) website by the date stated on the Calendar of Events. An Applicant who submits a question after the deadline date for receipt of questions indicated on the Calendar of Events assumes the risk that its application will not be responsive or competitive because the Commonwealth is not able to respond before the application receipt date or in sufficient time for the Applicant to prepare a responsive or competitive application. When submitted after the deadline date for receipt of questions indicated on the Calendar of Events, the Issuing Officer may respond to questions of an administrative nature by directing the questioning Applicant to specific provisions in the RFA. To the extent that the Issuing Office decides to respond to a non-administrative question after the deadline date for receipt of questions indicated on the Calendar of Events, the answer will be provided to all Applicants through an addendum.
I-9. Addenda to the RFA. If the Department deems it necessary to revise any part of this RFA before the application response date, the Issuing Office will post an addendum to the DGS website at http://www.emarketplace.state.pa.us/Search.aspx. It is the Applicant’s responsibility to periodically check the website for any new information or addenda to the RFA. The Department will post answers to the questions asked during the Questions & Answers period to the website as an addendum to the RFA. The Department shall not be bound by any verbal information nor shall it be bound by any written information that is not either contained within the RFA or formally issued as an addendum.
I-10. Response Date. To be considered for selection, hard copies of applications must arrive at the Issuing Office on or before the time and date specified in the RFA Calendar of Events. The Department will not accept applications via email or facsimile transmission. Applicants who send applications by mail or other delivery service should allow sufficient delivery time for the timely receipt of their applications. If, due to inclement weather, natural disaster, or any other cause, the Commonwealth office location to which applications are to be returned is closed on the application response date, the deadline for submission will be automatically extended until the next Commonwealth business day on which the office is open, unless the Department otherwise notifies Applicants. The hour for submission of applications shall remain the same. The Department will reject unopened, any late applications.
I-11. Application Requirements.
A. Application Submission. To be considered, Applicants should submit a complete response to this RFA to the Issuing Office, using the format provided in Part I, Section I- 11.B providing ten (10) paper copies of the Technical Submittal; two (2) paper copies of the Small Diverse Business (“SDB”) Participation Submittal for each Zone for which an application is being submitted (and which must include either the SDB Utilization Schedule (Form SDB-3), the Good Faith Efforts Documentation to Support Waiver Request (Form SDB-6) or both); and two (2) paper copies of the Contractor Partnership Program (“CPP”) Submittal (See Part V). In addition to the paper copies of the application, Applicants shall submit ten (10) complete and exact electronic copies of the Technical Submittal in the exact format provided in Part I, Section I-11.B, on Flash drive in Microsoft Office or Microsoft Office-compatible format and two (2) complete and exact electronic copies of the entire
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application (Technical, SDB, and CPP Submittals, along with all supporting documentation) on Flash drive in Microsoft Office or Microsoft Office-compatible format. Additionally, on the Flash Drive, include a separate folder that contains a complete and exact copy of the entire Technical Submittal, excluding financial capability information, in a searchable PDF (portable document format). The electronic copies must be a mirror image of the paper copy and any spreadsheets must be in Microsoft Excel. To the extent that an Applicant designates information as confidential or proprietary or trade secret protected in accordance with Part I, Section I-17, the Applicant must also include one (1) redacted version of the Technical Submittal, also excluding financial capability on Flash Drive in Microsoft Office or Microsoft Office-compatible format. Applicants may not lock or protect any cells or tabs. The Flash drives must clearly identify the Applicant and include the name and version number of the virus scanning software that was used to scan the Flash drives before they were submitted.
Applicants should not include any cost information in the technical submittal. The Applicant shall make no other distribution of its application to any other Applicant or Commonwealth official or Commonwealth consultant. Each application page should be numbered for ease of reference. An official authorized to bind the Applicant to its provisions must sign the application. If the official signs the Application Cover Sheet (Appendix D to this RFA) and the Application Cover Sheet is attached to the Applicant’s application, the requirement will be met. For this RFA, the application must remain valid for 120 days or until Agreements are fully executed. If the Department selects the Applicant’s application for award, the contents of the selected Applicant’s application will become, except to the extent the contents are changed through negotiations, Agreement obligations.
Each Applicant submitting an application specifically waives any right to withdraw or modify it, except that the Applicant may withdraw its application by written notice received at the Issuing Office’s address for application delivery prior to the exact hour and date specified for application receipt. An Applicant or its authorized representative may withdraw its application in person prior to the exact hour and date set for application receipt, provided the withdrawing person provides appropriate identification and signs a receipt for the application. An Applicant may modify its submitted application prior to the exact hour and date set for application receipt only by submitting a new sealed application or sealed modification which complies with the RFA requirements.
B. Application Format. Applicants must submit their applications in the format, including heading descriptions, outlined below. To be considered, the application must respond to all application requirements. Applicants should provide any other information thought to be relevant, but not applicable as an appendix to the application.
Applicants may submit one application for multiple Zones; however, if an Applicant is submitting for multiple Zones, any and all portions of the Technical and CPP Submittals that describe different, separate, or additional components specifically designed to address the
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RFA requirements in one particular Zone must be provided under separate tabs of the Applicant’s response for a particular section or question, and clearly labeled as “Section or Question [insert number and name of relevant section or question] HealthChoices [zone name] Zone” and Section or Question [insert number and name of relevant section or question] HealthChoices [zone name] Zone,” respectively. For example, Applicants will note in Part III, under “Personnel”, the Department is specifically requesting that any such different, separate, or additional organizational structure(s) or personnel be provided under separately tabbed sections of the Applicant’s application, and clearly labeled as “Part III , Section III-4.C HealthChoices [zone name] Personnel,” and Part III, Section III-4.C HealthChoices [zone name] Personnel,” respectively. If submitting for multiple Zones, Applicants must include separate SDB Submittals for each Zone in its application.
Each application shall consist of the following three (3) separately sealed submittals:
1. Technical Submittal:
a. In response to Part III, Sections III-1 through III-8; The Technical Submittal must include a Transmittal Letter and include Tabs 1 through 10. Applicants must format their technical responses as follows:
o Tab 1: Table of Contents o Tab 2: Zone(s) of Operations o Tab 3: Management Summary o Tab 4: Prior Experience o Tab 5: Personnel o Tab 6: Work Statement Questionnaire o Tab 7: Financial Capability o Tab 8: Requirements o Tab 9: Objections to the Standard Terms and Conditions o Tab 10: Applicant’s Managed Care Experience and References (Appendix F)
b. Complete, sign and include Appendix I – Domestic Workforce Utilization Certification;
c. Complete, sign and include Appendix L, Lobbying Certification and if applicable, the Disclosure of Lobbying Activities form; and
d. Complete and include Appendix C – Federal Funding Accountability and Transparency Act Sub-Recipient Data Sheet.
2. SDB Participation Submittal (which must include Appendix J - Small Diverse Business Participation Summary Sheet, the SDB Utilization Schedule (Form SDB-3), Good
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Faith Efforts Documentation to Support Waiver Request (Form SDB-6) or both), in response to RFA Part IV; and
3. CPP Submittal, in response to Part V.
The Department may request additional information which, in the Department’s opinion, is necessary to determine whether the Applicant’s competence, number of qualified employees, business organization, and financial resources are adequate to perform according to the RFA and the Agreement. The Department will initiate requests for additional information at any stage of the evaluation and selection process prior to the award of an agreement.
The Department may make investigations as it deems necessary to determine the ability of the Applicant to perform as a HealthChoices PH-MCO, including investigations to determine an Applicant’s ability to provide services in multiple Zones if selected for negotiations. The Applicant shall furnish to the Department all

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February 5, 2021 - PA.Gov