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Medicaid lawsuits conclude; Harmony loses case
The ISMA previously reported the status of lawsuits filed by managed care organizations (MCOs) Harmony, CareSource and Molina. The companies took the action when the Family and Social Services Administration and Office of Medicaid Policy and Planning did not award them 2007 contracts for the Medicaid Hoosier Healthwise program.
Each MCO filed an administrative appeal with the state last August, which they ultimately lost. While those appeals were pending, they also filed lawsuits. The federal suits of CareSource and Molina were dismissed Dec. 4, 2006. Harmony filed a lawsuit in state court in Marion County that was dismissed Sept. 26.
Subsequently, Harmony appealed its case to the Indiana Court of Appeals and the Indiana Supreme Court in October 2006. The Indiana Supreme Court exercised its discretion in refusing to accept the case.
On April 19, 2007, the Indiana Court of Appeals issued a ruling affirming the trial court. The appellate court first disagreed with the trial court and found that requiring Harmony to exhaust administrative remedies would have been futile, given the short timelines involved.
However, the appellate court agreed with the trial court on the remaining issues. First, Harmony could not demand through the courts that the Indiana Department of Administration re-score its proposal because such a mandate “would only serve to substitute a court’s judgment for discretion that can be exercised by the State.”
Second, Harmony was not entitled to the contract and, therefore, did not have standing as a disappointed bidder to challenge the state’s decision under the Administrative Orders and Procedures Act. Plus, the Act exempts such agency contracting decisions.
Finally, the court refused to require the state to award Harmony a contract or re-score its bid because Harmony has no such self-standing right. Harmony has until May 21 to appeal. If they do not, the court
of Appeals' decision will stand.
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