URGENT ISSUE IN THE NEWS
Honolulu-based AlohaCare health plan has filed a federal lawsuit against the state and seeks to overturn the $1.5 billion Medicaid contract that was awarded in February to two Mainland companies.
At issue is a three-year contract — one of the largest awarded by the state — to provide services to Hawaii’s aged, blind and disabled Medicaid beneficiaries who live across the state, including Maui.
In its bid protest, AlohaCare raised concerns that the request for proposal for the state contract “was skewed to benefit large, for-profit, out-of-state health plans at the expense of nonprofit Hawaii plans like AlohaCare.”
“Hawaii residents need to understand that it is their money being used to rebate state taxes to two Mainland publicly traded companies not even properly licensed in the state,” Kemper said.
“Sixty-five million dollars in tax reimbursements would fund a lot of schools and pave a lot of roads,” Kemper said. “This is a $1.5 billion bid gone bad.”
According to AlohaCare, its original bid was returned unopened for purportedly failing to meet the technical requirements of the request for proposal. Its initial bid protest was denied. An appeal of that decision is being considered by the state‘s chief procurement officer, who has twice asked for additional time before rendering a decision.
AlohaCare further claims that two violations of state and federal law should invalidate the awarded contracts. These involve a provision to use Medicaid funding for the reimbursement of $65 million in state premium taxes — which Kemper claims is unconstitutional under both state and federal law — and a section of the law that would illegally force 2,500 children under 19 years of age into Medicaid health maintenance organizations.
AlohaCare says the U.S. Centers for Medicare and Medicaid Services have been advocating inclusion of minors in Medicaid HMOs, but such inclusion would violate current federal Medicaid regulations.
