Insurer files protest with state over HMO bids

A health and life insurance company has filed a protest with the Florida Department of Management Services, which recently rejected bids to provide HMO benefits to the state’s employees.

Aetna Life Insurance Company hand-delivered a copy of the protest to the state earlier this month and posted a $3.1 million protest bond, according to a letter from the insurer’s attorneys, Foley & Lardner of Tallahassee.

The state began its procurement process in September seeking bids to provide its employees with insured Health and Maintenance Organization (HMO) benefits and self-insured health plan services. The contract was expected to total more than $300 million.

According to the protest petition, insurers placing bids were to have them in by Nov. 12. They were scored by a team within the department and a handful were accepted to participate in the second phase of the procurement procedure. Aetna was among those chosen, the petition said.

The goal of the process, according to the petition, was “to enable the department to determine what vendor(s) presents the best value to establish the principle terms and conditions of such contract.” The state was intent on achieving a contract that was “the best value for the state.”

Lengthy negotiations ensued, the petition said, “requiring great commitment of resources from both vendors and the department.”

Aetna’s petition said it had spent hundreds of thousands of dollars on the process that took nine months, involving some 30 employees who put in thousands of hours of work.

“Aetna undertook these efforts in reliance on the DMS’s assurances that it would actually follow the procedures that it said would occur,” the petition said. “Unfortunately, that is not what ultimately happened.”

Three public meetings that were scheduled were cancelled for no reason, including one in May at which vendors learned of the cancellation by arriving and finding a notice posted on the door of the meeting room.

Then, the department, “adopted a position of radio silence leaving vendors in the dark,” the petition says.

On June 14, the department announced it had rejected all bids without reason and would re-advertise, beginning the process anew.

The one-page letter said the formal bid protest petition and bond were hand-delivered to the department in Tallahassee on June 17.

Aetna is seeking an opportunity to resolve the matter, and if that can’t be achieved, the insurance giants wants its case presented to an administrative law judge for resolution.

According to the state, Aetna is among a handful of HMOs that offer benefits to state employees. Aetna currently provides health insurance to workers in nine Florida counties.