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DMS reaches agreements on HMO contracts for state workers

The Department of Management Services has reached a settlement agreement with three of the four insurance providers challenging the department's changes to HMO coverage for state workers. The new policy requires awarding HMOs contracts to the lowest single bidder in each of the state’s 67 counties instead of allowing employees to pick from two or three companies.

After opening the contracts for bid in June, DMS chose AvMed in late July to serve 38 counties, up from 30 under the previous plan. United HealthCare was awarded contracts for only 18 counties, down from 67. Coventry’s coverage area was set to drop from 26 to four counties. And Florida Health Care was slated to drop from two counties to zero. The change is part of the department's efforts to rein in health care costs.

Four HMO carriers - United HealthCare, Coventry, Florida Health Care Plans and Aetna -- protested those recommendations, starting an administrative legal process.  They argued the department miscalculated the costs of the competing proposals and that AvMed, which emerged as the big winner in the bid process, isn’t capable of delivering the services promised.

Coventry, Florida Health Care Plans and Aetna voluntarily dismissed their petitions after reaching a settlement with DMS. Under the agreement, Florida Health Care Plans will be offered as a second HMO in Flagler and Volusia counties, after lowering their rates as part of the settlement agreement. Coventry will be offered as a second HMO in Broward, Miami-Dade, Palm Beach and St. Lucie counties. Aetna will be the sole HMO in Brevard County.

United still has not agreed to contract terms that would make it the sole HMO provider in 18 counties, according to Kris Purcell, spokesman for DMS. A Division of Administrative Hearings judge dismissed United's challenge, and the company has taken its complaint to the First District Court of Appeal.  

The First DCA issued a temporary stay this week on execution of any HMO contracts while the case makes its way through the legal process. A spokeswoman for the United said the ocompany is abiding by that mandate. 

"United continues to stand firmly behind the merits of its protest and all of its contentions," said Elizabeth Calzadilla-Fiallo, a spokeswoman for United.

"The state is ready to continue working with them as health care partners and is hopeful that they will be available to our members as an open enrollment choice," Purcell said.

Open enrollment for state employee health care has been postponed  from late September until early November.