ValueOptions(R) New Mexico Files Formal Protest of Award of New Mexico Behavioral Health Contract to United

ALBUQUERQUE, N.M., Feb. 9 /PRNewswire/ -- ValueOptions(R) New Mexico, Inc., today filed a formal protest and requested a stay of procurement for the State of New Mexico's managed behavioral health care contract RFP 09-630-7903-0001, which was recently signed with UnitedHealth/Optum following a competitive bidding process.

ValueOptions(R) New Mexico believes a stay is in the best interest of the state and its seriously mentally ill consumers who will be adversely affected by the potential upheaval in service delivery caused by the Behavioral Health Purchasing Collaborative's refusal to take responsibility for the errors and flaws in its procurement process. ValueOptions(R) New Mexico asserts that the Collaborative awarded the new contract through a flawed evaluation process.

The protest finds demonstrable fault in the proposal evaluation process. ValueOptions(R) New Mexico asserts that the contract award to UnitedHealth/Optum was not based on criteria published in the RFP, that evaluation criteria were improperly applied, that evidence regarding the winning bidder's integrity and business ethics were ignored, that a serious conflict of interest was overlooked, and that proposal evaluators failed to consider the absence of necessary software licenses by the winning bidder.

"Our concern, as always, is for the health and well-being of New Mexico's behavioral health care consumers," said Barbara B. Hill, CEO of ValueOptions(R), Inc., parent of ValueOptions(R) New Mexico. "They have a right to know whether or not the procurement process was conducted in a forthright and legal manner. We have given this matter very thorough consideration. Based on facts and evidence, we believe our protest will be upheld."

"As required by the RFP, it is important for New Mexico to contract with the vendor that submitted the proposal that is most advantageous to the state," said Eddy Broadway, CEO of ValueOptions(R) New Mexico, Inc. "Only through this protest and subsequent proceedings will the public be able to make that judgment."

Specifically, ValueOptions(R) New Mexico cites five key areas of protest:

1) The Behavioral Health Collaborative contract award was not based upon the evaluation criteria published in the RFP.

Although the RFP states that the winning bidder would be awarded the contract based on a proposal "most advantageous to the state," ValueOptions(R) New Mexico's pricing proposal was never opened or considered by the state's proposal evaluators. In effect, the entire contract was awarded with no price competition. In addition, ValueOptions(R) New Mexico's overall score was effectively lowered and the Collaborative was deprived of the benefit of a significant evaluation factor in the ValueOptions(R) New Mexico proposal. In addition, some of the technical questions asked by the evaluators in both the main RFP and in the follow up request from the evaluators were never scored, leaving questions as to why some responses to questions were scored and some were not.

2) The evaluation criteria were improperly applied by the Collaborative resulting in an erroneous score for ValueOptions(R) New Mexico.

In addition to selectively choosing to ignore certain responses, including pricing, the evaluators also ignored ValueOptions(R) New Mexico's considerable experience and qualifications when scoring the evaluation factors prior to contract award. The result was an unrealistically low score that failed to provide a true picture of the competitive advantages of ValueOptions(R) New Mexico under this contract. ValueOptions(R), Inc., parent company of ValueOptions(R) New Mexico, has considerable public sector experience in 13 states; ValueOptions(R) New Mexico's incumbency and familiarity with the New Mexico behavioral health market were brushed aside in an apparent rush to anoint UnitedHealth/Optum as the successful bidder - a bidder that has no statewide public sector experience at all.

3) The collaborative failed to consider evidence regarding the winning bidder's integrity and business ethics in making its responsible determination.

According to New Mexico state law, public contracts can be awarded only to responsible offerors. Throughout 2008, and including October 8, 2008, when RFP proposals were due, UnitedHealth Group, the parent company of Optum, was under investigation by the New York Attorney General for defrauding consumers by intentionally skewing data to lower reimbursements to providers and members. Ultimately, UnitedHealth, parent of Optum, was required to pay $400 million; $50 million to create a nonprofit organization to address the issues; and $350 million to settle a class-action lawsuit claiming United had underpaid patients and doctors. These findings raise serious concerns regarding UnitedHealth/Optum's record of integrity.

4) The Collaborative overlooked a serious conflict of interest inherent in the winning bidder's proposal.

Optum is a subsidiary of UnitedHealth Group, which supplied through another subsidiary, Ingenix, the skewed data that has allowed all the UnitedHealth companies to underpay providers and patients. While Optum has no other statewide Medicaid business, it does have business with national employers who have employees in New Mexico. It is unknown whether the evaluators checked with New Mexico's Attorney General to see if action similar to that which occurred in New York will be taken in New Mexico to collect money underpaid to providers and consumers.

5) The Collaborative failed to consider the absence of necessary software licenses in its proposal evaluation, resulting in an unrealistic score for the winning bidder in the Information Systems/Technology scoring section of the RFP.

The Collaborative failed to give sufficient attention to the information technology environment in which the successful offeror would place the State and its behavioral health collaborative system. The Web-based applications and other software products in use in ValueOptions(R) New Mexico's performance as the incumbent are proprietary to ValueOptions(R). The State of New Mexico does not have a license to these systems. Optum does not have a system in operation which can be proven to support the activities of the Collaborative. Implementation of an untested system for tracking consumers and paying providers' claims will risk the stability and responsiveness of the behavioral health delivery system in New Mexico.

In the filing, ValueOptions(R) New Mexico requests a ruling that stays the award of all contracts under this solicitation during the consideration of this protest, terminates the contract award and either re-competes the contract or awards the contract to ValueOptions(R) New Mexico.

About ValueOptions(R), Inc.

ValueOptions(R), Inc., the nation's largest independent behavioral health and wellness company, provides services to more than 23 million individuals through a variety of contracts with state and county agencies and, additionally, with health plans and employers. ValueOptions(R) is a national behavioral health and wellness company that specializes in management for all behavioral health issues and promotes health and wellness through innovative programs. ValueOptions(R) mission is to improve the health and wellness for the people it serves.

www.ValueOptions.com

SOURCE ValueOptions, Inc.



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