NewsMontana News


State awards protested $58M Medicaid IT contract

Posted at 4:24 PM, Nov 29, 2018
and last updated 2018-11-29 18:43:13-05

HELENA – State health officials have awarded a $58 million, multi-year contract for processing Medicaid and other health-care claims to a company whose final bid was $10 million higher than the other finalist for the contract.

The state completed the contract with Deloitte, an international consulting firm, in late September.

The losing bidder, Cambria Solutions of Sacramento, California, formally protested the contract award. The state Department of Public Health and Human Services denied that protest earlier this month.

Cambria later decided not to pursue the protest any further.

Deloitte has been hired to help the state build the Montana Program for Automating and Transforming Healthcare (MPATH), a new automated system for managing payments, health-care providers and patients served by Medicaid and other health-care programs run by the state.

Medicaid is the state-federal program that pays medical bills for poor and disabled Montanans. Nearly one-fourth of Montanans are covered by Medicaid.

All components of MPATH are supposed to be in place by the end of 2021. Deloitte’s contract has a base period of seven years, worth up to $46 million. It could extend the contract for up to three years and another $12 million.

Deloitte and Cambria submitted revised final offers this spring, at the request of the state. Deloitte’s final bid was $58.7 million; Cambria’s proposal was $48.6 million.

State procurement officials, however, disqualified Cambria’s bid because the company had modified its work allocations in an attachment that the state said was prohibited. Once the bid was disqualified, Cambria’s initial bid amount of $57.3 million was used.

In response to questions from MTN News, state health officials said Deloitte won the bid because it had a higher score and was a “responsive offeror whose proposal best meets the evaluation criteria.”

They also said the attachment to Cambria’s final offer made substantial changes in its “resource allocations,” such as increasing the number of hours performed by subcontractors, and that such changes went beyond what the state required on the final offer.

In its protest filed Oct. 11, Cambria said Deloitte submitted materials outside the established process, including its own alternative-cost proposal and a critique of Cambria’s proposal – neither of which Cambria saw until the process was nearly over.

Deloitte should have been disqualified for submitting those materials or the state should not have considered them, Cambria said.

In the Nov. 10 rejection of the protest, DPHHS Chief Procurement Officer Meghan Holmlund said the state did not consider Deloitte’s alternative-cost proposal or the critique in its final contract scoring and decision.

Earlier this month, Cambria said in a news release that it holds contracts in other states for similar systems and that Montana is the only place it has protested the procurement procedure.

“Cambria feels that a fair contract process is essential to build the state’s reputation across the country and attract businesses to bid on projects in Montana,” it said.

The state put out its initial request for the MPATH contract in the spring of 2017, but Deloitte was the only qualifying responder. State officials canceled that offer and put out a new one in November 2017, leading to the Deloitte and Cambria bids.

— Story by Mike Dennison – MTN News