Exhibit P85 may be relevant to the issues raised in the proceeding; and (3) the relief granted shall be without prejudice to CCP’s ability to attempt to offer P24, P86, and/or P87 as impeachment, if such an opportunity presented itself.
Additionally, on September 20, 2018, the undersigned heard DOH’s Omnibus Motion in Limine and Motion to Strike, which Staywell joined. CCP filed a Response and Objection to DOH’s Motion in Limine. The crux of the Motion was that CCP’s witness list improperly designated four client representatives as expert witnesses, which DOH and Staywell contended was improper under section 90.702, Florida Statutes (2018), and the standard enunciated in Daubert v. Merrel Dow Pharmaceuticals, Inc., 509
U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993); General
Electric Company v. Joiner, 522 U.S. 136, 118 S. Ct. 512, 139 L.
Ed. 2d 508 (1977); and Kumho Tire Company, Ltd. v. Carmichael, 526 U.S. 137, 119 S. Ct. 1167, 143 L. Ed. 2d 238 (19P9). At the
final hearing, CCP agreed to offer only Edward Maszak, the chief financial officer of CCP, as an expert witness. The undersigned issued an Order Denying Respondent’s Omnibus Motion in Limine and
Motion to Strike (Without Prejudice), allowing DOH and/or Staywell to object to the designation of Mr. Maszak as an expert witness when he testified, and to permit DOH and/or Staywell to conduct a proceeding consistent with section 90.702 and Daubert to determine whether Mr. Maszak was qualified to provide the undersigned with expert testimony.1/
The following exhibits were admitted into evidence: Joint Exhibits 1 through 47; Respondent/Intervenor’s Exhibits 2 through
CCP presented the testimony of: Jessica Lerner; Leon Mink; Lupe Rivero; Miguel Venereo; Edward Maszak; Cheryl Young; Stacey Lampkin; Antonio Dawkins; Andrea Gary; Shevaun Harris; Michele Tallent; and Diana Trahan. Staywell presented the testimony of Elizabeth Miller and Jeff Skobel. The Department independently sponsored no witnesses.
At the close of the final hearing, the undersigned advised the parties of a 10-day timeframe after receipt of the final hearing transcript to file post-hearing submittals. The court reporter filed the 10-volume Transcript of the hearing with the Division on October 18, 2018. All parties timely filed proposed recommended orders on October 29, 2018, which were duly considered in preparing this Recommended Order.
All references are to the 2018 codification of the Florida Statutes unless otherwise indicated.
In 2011, the Florida Legislature created part IV of chapter 409, Florida Statutes, titled “Medicaid Managed Care.” See ch. 2011-134, Laws of Fla.; §§ 409.961 – 409.985, Fla. Stat. In so doing, the Florida Legislature designated the Agency for Health Care Administration (AHCA) as the single state agency authorized to make payments under Title XIX of the Social Security Act. § 409.902(1), Fla. Stat.; see also 42 U.S.C.
§ 1396-1396v.
The Florida Legislature established the Children’s Medical Services Program to “[p]rovide to children with special health care needs a family-centered, comprehensive, and coordinated statewide managed system of care that links
community-based health care with multidisciplinary, regional, and tertiary pediatric specialty care.” § 391.016(1), Fla. Stat.6/
The Department oversees and operates the Children Medical Services Network, a statewide managed care service system that includes health care providers. See §§ 391.021(1) and 391.026(8), Fla. Stat. The Department also operates the CMS Plan, which serves approximately 62,000 children with special healthcare needs who are eligible for Medicaid and the Children’s
Health Insurance Program under Title XIX and Title XXI of the Social Security Act.
The Department operates the CMS Plan under a contract between the Department and AHCA (the Prime Contract), which is part of AHCA’s Statewide Medicaid Managed Care Program (SMMC).
Under the Prime Contract, the Department performs certain functions, including care coordination and clinical eligibility determinations. The Department subcontracts out other functions to two integrated care system subcontractors, CCP and Ped-I-Care. CCP and Ped-I-Care provide member services, utilization management, and service authorizations, and contract with medical network providers to deliver services in the areas of the state for which they are responsible.
CCP is a provider services network (PSN) owned by the North Broward Hospital District and the South Broward Hospital District.7/ Currently, CCP is the exclusive subcontractor for CMS member services for the state of Florida south of the
Interstate 4 (I-4) corridor. Ped-I-Care is the exclusive subcontractor for the portion of the state north of the I-4 corridor.
INVITATION TO NEGOTIATE DOH 17-026
On January 20, 2018, the Department issued the ITN for the CMS Plan. On February 28, 2018, the Department issued Addendum 1 to the ITN, which replaced the original ITN in its
entirety. Thereafter, the Department issued four additional addenda to the ITN.
Cheryl Young, the director and chief executive officer of the CMS Plan, testified that the ITN contemplated a “new” or “improved” healthcare model, after soliciting public input from stakeholders, families, and providers in three public meetings. Ms. Young further testified that the Department engaged with national experts for input on developing health service systems for medically complex patients. Ms. Young also testified that the Department spoke with its 41 medical directors, as well as the Florida Legislature, concerning this healthcare model.
Ms. Young testified that the Department’s intention in the ITN was “to help families navigate a complicated healthcare system.” She further stated that “instead of incentivizing fee- for-services payments or where providers get paid, a model where providers are paid for quantity, we wanted to move to a value- based care with the rest of the nation where quality and improved health outcomes for families were incentivized in the model.”
Ultimately, under this “new” model contemplated in the ITN, instead of paying network providers a fee-for-service rate (as the Department did under the current CMS Plan), the vendor would receive a per-member per-month capitation rate and have flexibility to negotiate payment of network providers to incentivize overall health outcome goals.
Under the “new” model contemplated in the ITN, the Department would subcontract its care coordination function, but the Department’s other previously existing functions with respect to the CMS Plan, including clinical eligibility determinations, would remain the responsibility of the Department.
Section 3.3 of the ITN, titled “Specific Goals,” stated:
The Department intends to award one state- wide Contract to a Respondent to assist with the administration of the CMS Plan. The Department will award additional contracts only if there is no acceptable state-wide Respondent for all areas of the state. The Department reserves the right to award more than one contract based on regional clusters. Respondents may propose more than one contract based on regional clusters.
Respondents may propose statewide or on a regional cluster with either a full risk model or a phased in risk model. Respondents may opt to be full risk in one or two regional clusters and partial risk in others and may submit a statewide and regional cluster reply simultaneously.
The ITN identified the “regional clusters” as follows: Northern Florida-AHCA Regions 1-4; Central/Southwestern Florida– AHCA Regions 5-8; and South/Southeastern Florida-AHCA
Regions 9-11.
Section 3.3 of the ITN further stated:
Respondent should offer comprehensive, quality-driven provider networks, streamlined processes that enhance the enrollee and provider experience, expanded benefits targeted to improve outcomes for enrollees,
top quality scores, and high rates of enrollee satisfaction to deliver an efficient, high-quality, innovative, cost- effective, and integrated health care delivery model.
Additionally, section 3.3 of the ITN stated that the Department intended to award a contract to a Respondent that offers “innovative and evidence-based approaches” in meeting certain requirements set forth in Attachment A-2, Core Provisions, while addressing the following goals under the CMS
Plan:
Reduce potentially preventable inpatient and outpatient hospital events, and unnecessary ancillary services;
Culturally competent, linguistically appropriate, family centered and participant driven care; and
Care that is evidence based, where possible and evidence-informed or based on promising practice when evidence-based approaches are not available.
Section 3.4 of the ITN, titled “Legal Authority,” stated:
Children’s Medical Services Managed Care Plan (CMS Plan, [sic] a Medicaid specialty plan for children with chronic conditions operated by the Department, as further defined in Chapter 391, Chapter 409, Parts II and IV, including section 409.974(4), Florida Statutes, through the AHCA Prime Contract.
The ITN instructed Respondents to submit replies through completing Attachment A-1 to the ITN. The ITN stated
that the Department “would evaluate and score replies to establish a reference point from which to make negotiation decisions.”
After negotiations, the Department would “award [a contract] to the responsible, responsive Respondent determined to provide the best value, based upon the negotiations.”
“Criteria #1-Statewide or Regional Reply,” found in Attachment A-1 to the ITN, directly requested whether a Respondent’s reply was statewide or for a regional cluster, the priority of the reply, and whether the reply was risk or non- risk.
Attachment A-1 to the ITN requested replies to a total of 57 criteria. Additionally, it requested that Respondents provide a cost reply, provided that the Department would “review and consider the cost replies submitted by Respondents who are invited to negotiations during the negotiation phase[,]” and stated that during negotiations, the Department would evaluate the cost reply “utilizing rates determined by state of Florida actuaries as part of the total reply by the Respondent.”
The ITN allowed a prospective Respondent to submit written questions to the Department concerning the ITN prior to submitting replies. For example, Addendum 2 to the ITN was a partial response to questions the Department received on
February 21, 2018. Addendum 3 to the ITN was a final response to
questions the Department received on February 21, 2018, as well as additional questions the Department received on March 7, 2018.8/
In Question 28 of Addendum 2 to the ITN, CCP asked, and the Department answered, as follows:
Q28) 3.3 Specific Goals: The Department intends to award one state-wide Contract to a Respondent to assist with the administration of the CMS Plan. The Department will award additional contracts only if there is no acceptable state-wide Respondent for all areas of the state. If a Respondent in a regional cluster submission outperforms a Respondent in a statewide submission, or otherwise presents efficiencies or other quality advantages to the Department, will the Department retain the discretion to award a regional cluster in lieu of, or in addition to, an acceptable statewide award?
A28) Additional points/preference will be given to state-wide bids regardless of risk type. The Department will award contracts by Regional Cluster only if there is no acceptable state-wide Respondent for all areas of the state. The Department reserves the right to award a contract for multiple regional clusters in that instance, or if necessary, a single contract for each regional cluster.
In Question 33 of Addendum 2 to the ITN, CCP asked, and the Department answered, as follows:
Q33) Criteria 1
Does a Respondent get extra points for each cluster in which it proposes to assume full risk as opposed to proposing as risk phase alternative?
A33) Additional points/preference will be given to state-wide bids regardless of risk type. The Department will award contracts by Regional Cluster only if there is no acceptable state-wide Respondent for all areas of the state. The Department reserves the right to award a contract for multiple regional clusters in that instance, or if necessary, a single contract for each regional cluster. As noted in the Evaluation Criteria for #1, additional points are awarded to regional bids on an at-risk basis over regional bids on a non-risk basis.
In Question 159 of Addendum 3 to the ITN, CCP asked, and the Department answered, as follows:
Q159) Qualification of Respondent Eligibility
What is the minimum and maximum number of Plans required per cluster to be awarded?
A159) Only one Respondent will be selected per cluster with preference given to Respondents with statewide and multiple cluster proposals.
In Question 162 of Addendum 3 to the ITN, CCP asked, and the Department answered, as follows:
Q162) PSN Certification
Assuming, there is a PSN preference, will there be a minimum or maximum number of PSNs required per cluster?
A162) Only one Respondent will be selected per cluster with preference given to Respondents with statewide and multiple cluster proposals.
The undersigned finds that the ITN clearly stated that the Department intended to award a single, statewide contract to a single Respondent. The Department answered questions in
Addenda 2 and 3 to the ITN that consistently and unambiguously restated this preference for a single, statewide contract to a single Respondent. The ITN further clearly stated that it would award contracts to Respondents with regional cluster proposals if there was no acceptable statewide Respondent.
The ITN is silent as to whether the Department would apply a preference for a PSN. In addition to Question 162 to Addendum 3 to the ITN (quoted in paragraph 25, supra), in
Question 161 of Addendum 3 to the ITN, CCP asked, and the Department answered, as follows:
Q161) PSN Certification
Per 609-974(1) [sic] and 409.966, F.S. will the Department apply the PSN preference in the selection process?
A161) Requirements are reflected in the ITN.
The undersigned finds that the ITN makes no provision for the application of a PSN preference, and that Addendum 3 makes clear that the Department intentionally omitted a PSN preference in the ITN.
CCP did not timely protest the specifications in the ITN or any of the Addenda pursuant to section 120.57(3). EVALUATION
The Department received replies to the ITN from three Respondents prior to the 3:00 p.m., April 27, 2018, deadline:
Staywell; (b) Sunshine; and (c) CCP.
Staywell and Sunshine both proposed to enter into a statewide contract with the Department.
CCP proposed to enter into a contract for the South/Southeastern Regional Cluster--AHCA Regions 9 through 11-- with the Department.9/
The Department found that the replies from Staywell, Sunshine, and CCP were responsive and responsible.
The Department appointed five evaluators to evaluate the replies (evaluation team): (a) Dr. John Curran;
Dr. Steven Freedman; (c) Dr. Dennis Kuo; (d) Andrea Gary, the Department’s bureau chief of CMS Plan Administration; and
(e) Kelli Stannard, the Department’s director of Clinical Operations and Specialty Programs for CMS.
Members of the evaluation team received training, in the form of a power point presentation, that instructed them on the evaluation of the ITN. This training material, inter alia, instructed the evaluation team to evaluate each Respondent’s reply pursuant to section 287.057, Florida Statutes, as well as the criteria contained in the ITN.
As provided in the ITN, the point value awarded for a statewide response was worth a maximum of 100 raw points and 200 weighted points, out of a total weighted score of 4,513.
The evaluation team scored the replies as follows:
(a) Staywell – 3,565.20 points; (b) Sunshine – 3,370.40 points; and (c) CCP – 2,843.20 points.
The Department invited all three Respondents to negotiate. As Ms. Young testified:
We invited all three respondents because going into negotiations we did not know if we would be able to successfully negotiate with a statewide vendor, so we wanted to have all three at the table and make the same asks of all of them related to the important service delivery components set forth in the ITN and other matters.
NEGOTIATIONS
The Department appointed seven negotiators to negotiate with the Respondents (negotiation team): (a) Andrea Gary, who served on the evaluation team; (b) Kelli Stannard, who also served on the evaluation team; (c) Cheryl Young; (d) Michele Tallent, the Department’s deputy secretary for Operations;
(e) Antonio Dawkins, the Department’s director of Contracts and a Florida-Certified Project Management Professional10/; (f) Stacey Lampkin, a nonvoting member who is an actuary with Mercer Health and Benefits, LLC; and (g) Tom Dahl, a nonvoting member who is an actuary with Mercer Health and Benefits, LLC.
Members of the negotiation team received training, in the form of the PowerPoint presentation that the evaluation team
also received, that instructed them on their responsibilities as negotiators.
The scoring and ranking from the evaluation team did not carry over into the negotiations. Ms. Gary and Ms. Stannard, who also served as members of the evaluation team, testified that they knew only their scores and had no knowledge of the aggregate scores or ranking from the evaluation team.
The ITN contained “notes” under various evaluation criteria that stated:
Note: Pursuant to section 409.966(3)(c)6., Florida Statutes, reply to this submission requirement will be considered for negotiations.
Section 409.966(3)(c)6., which is part of the “Medicaid Managed Care” provisions of Florida’s Medicaid law, and which governs AHCA as the designated single state agency authorized to make payments for medical assistance and related services under Title XIX of the Social Security Act, is not applicable to the Department. Ms. Young testified that these notes in the ITN were typographical errors because the Department is exempt from
AHCA’s competitive procurement process. The undersigned finds Ms. Young’s explanation persuasive. See § 409.974(4), Fla. Stat.
(“Participation by the Children’s Medical Services Network shall be pursuant to a single, statewide contract with [AHCA] that is
not subject to the procurement requirements or regional plan number limits of this section.”).
The negotiation team met prior to negotiating with any of the Respondents in a “strategy session” to discuss how they would approach the negotiations. The negotiation team discussed what tools they would use to gather information on what they deemed the best value criteria and outlined a schedule.
During this strategy session, the negotiation team developed a document, titled “Best Value Criteria,” which was also referred to throughout this proceeding as the “Best Value Matrix.” As CCP has contended that the Department acted in an arbitrary and capricious manner by its use, and revision, of the best value matrix, its origin and development are set forth below.
Ms. Trahan, the Department’s procurement officer for the ITN, testified that, prior to negotiations, she communicated with Ms. Young (and others) via e-mail to provide a document they referred to as the “negotiation topics tool” that Ms. Trahan had recommended to use for this ITN. Ms. Trahan testified that the “negotiation topics tool” was a template that the Department previously used in its procurements. Ms. Trahan testified that she prepared a template that incorporated criteria from the ITN, with space for the negotiators to make notes.
In this same e-mail, Ms. Trahan also stated that she would request a best value matrix from AHCA. The best value matrix is a document that differs from the negotiation topics tool.
Ms. Young testified that she asked AHCA and other agencies, during planning meetings related to the ITN, about best value matrices that those agencies used during procurements. In particular, Ms. Young stated that she discussed with AHCA the process for negotiating numerous items related to serving applicable populations served by the SMMC and wanted to include those items in the Department’s negotiations with potential vendors, so those vendors would be aware of these items. Additionally, as these items would become components of the new contract, Ms. Young testified that she wanted to review AHCA’s best value matrix template.
Ms. Young testified that, while drafting the best value matrix, she did not include criteria contained in
section 409.966. Ms. Young testified that section 409.966, which governs AHCA procurements, did not apply to the Department, which is statutorily exempt from AHCA’s procurement requirements. As similarly stated in paragraph 42, supra, the undersigned finds
Ms. Young’s testimony persuasive. See § 409.974(4), Fla. Stat. (“Participation by the Children’s Medical Services Network shall be pursuant to a single, statewide contract with [AHCA] that is
not subject to the procurement requirements or regional plan number limits of this section.”). Accordingly, the Department’s decision to not use the criteria in section 409.966 in the best value matrix is logical and supported by the statute, and its reference in the ITN was an error and of no consequence in the evaluation or negotiation of the Respondents’ proposals.
The best value matrix changed as the Department moved through the negotiation process. The initial best value matrix contained over 200 items, and the final version that the evaluation team used and completed contained 54 items. The items contained in the best value matrix matched the criteria in the ITN. During the negotiations, the negotiation team removed items from the best value matrix that were nonnegotiable and that all Respondents had agreed to.
The best value matrix contains a column for each Respondent who responded to the ITN. It also contains rows that provide categories, and items, that matched the criteria from the ITN. The negotiation team placed an “X” in the column for each Respondent who met the particular criteria from the ITN. The negotiation team did not place an “X” in the column if a Respondent did not meet a particular criteria from the ITN.
The best value matrix ultimately tallied the overall number of “Xs” each Respondent received from the negotiation team.
CCP argues that the Department did not disclose to CCP its use of the best value matrix during negotiations, and that the best value matrix contained criteria not disclosed in the ITN. The negotiation team developed the best value matrix to assist it in the negotiations phase. It did not contain a new set of criteria separate and apart from the ITN. The items listed in the best value matrix all came from the criteria in the ITN.
The Department gave all Respondents the opportunity to provide information to the negotiation team and afforded equal amounts of time and opportunities to meet with the negotiation team.
The negotiation team held two negotiation meetings with each Respondent. The negotiation team first held in-person negotiation meetings with Sunshine, Staywell, and CCP on June 11, 12, and 13, 2018, respectively.
At its first negotiation meeting on June 13, 2018, CCP submitted to the negotiation team a document, titled “CMS Additional Offerings to the Department.” This document listed a variety of additional items and incentives that CCP proposed to provide if selected. At the final hearing, Ms. Lerner, the executive vice president and chief operating officer of CCP, confirmed that CCP presented this document to the Department to demonstrate its willingness to provide “additional offerings”
that included items not required in the ITN. Ms. Lerner further testified that CCP presented this document for the Department’s consideration of “additional benefits criteria.”
Following the in-person negotiation meetings with each Respondent, the negotiation team met alone and held additional strategy sessions to discuss information received from Respondents and to determine additional information it wanted to request from Respondents.
The negotiation team thereafter requested that each Respondent provide clarifications regarding their replies and additional information based on discussions during negotiations. All three Respondents submitted this additional information that the negotiation team requested.
The Department also required the Respondents to submit revised cost replies, including an updated actuarial memorandum. All three Respondents submitted the revised cost replies with an updated actuarial memorandum that the negotiation team requested.
Staywell’s cost reply submission contained an updated actuarial memorandum that its in-house actuary completed and certified. Attachment D to the ITN, titled “Cost Reply Instructions,” and more specifically, subsection 3, titled “Actuarial Memorandum Requirements,” provides the ITN’s requirements for this submission. After reviewing Attachment D,
the undersigned notes the ITN did not require that an independent actuary certify the actuarial memorandum.
The negotiation team held a second round of negotiation meetings with the Respondents, via telephone conference call, on June 18, 2018.
As part of these second negotiation meetings, the Department provided each Respondent with a document, titled “DOH 17-026 CMS Managed Care Plan Negotiation Topics,” which set forth the rates the Department requested the Respondents use, as well as the contract terms the Department required of the Respondents in order for the Department to consider them for the
contract award. The Department asked each Respondent to complete and return this document, indicating whether it agreed or whether it was submitting a counteroffer to the items that were negotiable.
CCP agreed to all of the items that the Department requested, including the proposed rates. Staywell agreed to all of the items that the Department requested, including the proposed rates, and offered an enhanced primary care provider ratio. Sunshine submitted counteroffers for several items.
The rates that CCP and Staywell agreed to for the South/Southeastern Regional Cluster, AHCA Regions 9-11, were the same.
BEST VALUE DETERMINATION AND INTENDED AWARD
On June 25, 2018, the negotiation team met for a final time to review the information that the Respondents submitted following the second round of negotiations. At that meeting, the negotiation team finalized the best value matrix, and then proceeded to put an “X” in a Respondent’s column that corresponded to each item (criteria from the ITN) if the Respondent had addressed the item to the negotiation team’s satisfaction. An “X” did not represent a “point” that the negotiation team awarded. The best value matrix, which was a spreadsheet, calculated the number of “Xs” (of the 54 possible) for each Respondent, with Staywell totaling 53, CCP totaling 46, and Sunshine totaling 43.
CCP contends that the best value matrix incorporated criteria that were not contained in the ITN--“added value.” CCP contends that the negotiation team’s use of the “added value” criteria was an arbitrary and capricious means to take points away from CCP.
Ms. Young testified that “added value” meant that an item was “important to the negotiating team” that was “not consequential” and which did not provide any extra weight to the negotiation process.
Ms. Tallent testified that “added value” meant “an item that the team felt added value to the lives of the children and their families[,]” that had “no additional scoring to it.”
As stated in paragraph 55, supra, CCP submitted to the negotiation team during the in-person negotiation meeting a document titled “CMS Additional Offerings to the Department.” This document listed a variety of additional items and incentives that CCP proposed to provide if selected.
The undersigned finds that the Department did not apply the concept of “added value” in an arbitrary and capricious manner. Rather, the Department’s witnesses credibly testified that “added value” simply reflected the negotiation team’s belief that certain items in the best value matrix (which were ITN criteria) were important. CCP provided the negotiation team with its “CMS Additional Offerings to the Department” that included items CCP hoped the negotiation team would consider. CCP’s argument that the Department considered “added value” as an additional undisclosed criteria, when it submitted a document with “additional offerings” it hoped the negotiation team would consider, is unavailing and unpersuasive.
CCP further contends that the negotiation team should have credited it with an “X” for certain items in the best value matrix where it received no “X.” These contentions will be dealt with in the following paragraphs.
Care coordination experience relevant to medically complex/CMS comparable employees/added value.
Dr. Venereo, CCP’s senior vice president and chief medical officer, testified that CCP was aware of this criteria from the ITN, and addressed it in its response. He testified as
follows:
We drew upon our experience basically in two lines of business. We currently assist CMS care coordination program because we do utilization management for CMS, and care coordination and utilization management go hand in hand. There is a lot of compatibility and interaction, so we assist CMS in that. We also have a proportionately high number of complex children in our MMA line of business.
However, on cross-examination, Dr. Venereo admitted that CCP does not currently provide care coordination under its contract with the Department, and that under its Medicaid Managed Assistance (MMA) contract with AHCA, only provides care coordination in Broward County. The undersigned finds that the Department’s decision to not award an “X” to CCP for this category was neither arbitrary nor capricious.11/
Inclusion of community specific resources available to care coordination and care management and enrollees, including but not limited to Medicaid/CHIP financial eligibility, SNAP, WIC utility payment assistance, referrals to Legal Aid, parenting/wellness classes.
Mr. Mink, the chief information officer for CCP, testified that CCP was aware of this criteria, and addressed it in its response. Mr. Mink testified that while CCP certainly
addressed some of the resources necessary for this criteria, other resources were not in place during the time of negotiations. For example, Mr. Mink testified that at the time of negotiations, enrollees could not directly access CCP’s Family Resource Database, but that CCP was negotiating a contract with “Aunt Bertha”--a community-based referral platform--to allow access to the database. Ms. Lerner, the Executive Vice President and Chief Operating Officer of CCP, testified that CCP did not have a web page in place at the time CCP was in negotiations that addressed all of the items in this criteria. The undersigned finds that the Department’s decision to not award an “X” to CCP for this category was neither arbitrary nor capricious.12/
Providing additional services above and beyond transition from institutions.
Ms. Lerner testified that CCP was aware of this criteria, and addressed it in its response. Ms. Lerner testified, and the undersigned’s review of CCP’s response to this criteria demonstrated, that CCP’s response was that “CCP agrees to provide additional services above and beyond transition from institutions for those services deemed medically necessary.” Further, CCP’s response references its detailed response to evaluation criteria 7, concerning its Disease Management Program. Given CCP’s unremarkable response to this criteria, the undersigned finds that the Department’s decision to not award an
“X” to CCP for this category was neither arbitrary nor capricious.
Well defined process for ensuring no service breaks when transitioning between XIX and XXI.
Mr. Mink testified that CCP was aware of this criteria, and addressed it in its response. CCP’s response during negotiations was:
CCP understands the differences between Title XIX and Title XXI benefits since we
currently support these two populations. Our eligibility onboarding process will be utilized to assist in transitioning members from one plan to the other explaining the differences to the member of care giver between each plan. Our care managers will facilitate this transition assuring there are no service breaks by coordinating care between the state agency, the member and providers.
Mr. Mink further testified that CCP did not include in its response concerning this “well defined process” the utilization of technology, although CCP included the use of technology in its response to the ITN. Given CCP’s unremarkable response to this criteria, which requests a “well defined process,” the undersigned finds that the Department’s decision to not award an “X” to CCP for this category was neither arbitrary nor capricious.
Vendor willing to include national standards for transition of care in policy and process for transition? Added value.
Dr. Venereo testified that CCP was aware of this criteria, and addressed it in its response. Dr. Venereo testified that the “six core elements of transition in healthcare are embedded into our care coordination model[.]” However, CCP inexplicably failed to reference the applicable national standards in its reply, or when it had the opportunity to address these standards during negotiations. The undersigned finds that the Department’s decision to not award an “X” to CCP for this category was neither arbitrary nor capricious.
Extent to which telemedicine will be used to address accessibility in rural areas? (Want specifics from respondents on this question – how they’ll implement the new AHCA requirement) Percentage goals for increasing the numbers of providers using telemedicine in rural areas? ADDED VALUE.
Mr. Mink testified that CCP was aware of this criteria, and addressed it in its response. Mr. Mink testified that rural areas are not a large concern for CCP because most of its service area (the South/Southeastern AHCA Regional Cluster) is mostly metropolitan. Mr. Mink also testified that CCP addressed use of telemedicine for its members that may be mobility-challenged or in rural areas. The ITN, which expressed a statewide preference, does not indicate whether the Department would apply different weights in evaluation or determine best value by regional cluster. CCP’s decision to seek only a contract for the
South/Southeastern Regional Cluster--AHCA Regions 9 through 11-- necessarily affected its ability to respond to this criteria.
The undersigned finds that the Department’s decision to not award an “X” to CCP for this category was neither arbitrary nor capricious.
Offers the most [expanded benefits] of relevance to add value to child’s life.
Ms. Lerner testified that CCP was aware of the criteria of “expanded benefits,” and addressed it in its response. The ITN contained criteria 17, the expanded benefits tool, and criteria 18, titled “Additional Expanded Benefits,” and an “Additional Expanded Benefits Template.” With respect to criteria 18, the Department asked each Respondent to identify each additional expanded benefit that it proposed to offer its enrollees by eligible population. The negotiation team determined that Staywell listed a higher number of additional expanded benefits than CCP, and thus awarded Staywell an “X.” This is entirely consistent with this criteria, which specifically asks for the response that “[o]ffers the most [expanded benefits] of relevance to add value to child’s life.” The undersigned finds that the Department’s decision to not award an “X” to CCP for this category was neither arbitrary nor capricious.
Even if CCP had received an “X” in every category on the best value matrix where it did not receive an “X” (with the exception of the category “Agrees to operate statewide”), CCP and Staywell would have received the same number of “Xs”.
Ultimately, the negotiation team determined that Staywell provided the best value to the state.
On June 25, 2018, the Department’s procurement officer submitted a Recommendation of Award Memorandum, which the Department’s chief of staff signed, accepting the recommendation to award the CMS contract to Staywell.
On June 26, 2018, at 11:00 a.m., the Department posted its Notice of Intent to Award the CMS contract to Staywell.
At noon on June 26, 2018, members of the negotiation team briefed the secretary of the Department on the intended contract award.13/
CCP filed a timely notice of intent to protest the Department’s decision to award the CMS contract to Staywell.
On July 9, 2018, CCP filed a Formal Written Protest and Petition for Formal Administrative Hearing. On August 6, 2018, CCP filed an Amended Formal Written Protest and Petition for Formal Administrative Hearing.
ADDITIONAL ISSUES
CCP raises numerous additional issues concerning the
ITN.
First, CCP argues that the Department’s procurement was biased, raising a contract dispute between the Department and CCP that resulted in a favorable settlement for CCP while the procurement was pending. CCP presented no evidence that any evaluator or negotiator was biased against CCP as a result of that settlement or any other reason. Ms. Lerner testified that nothing that members of the negotiation team did during any of the negotiation team meetings in which she participated indicated that they were biased in any way with respect to CCP. Lupe Rivero, the senior vice president of Government Programs and Business Development for CCP, testified that CCP’s relationship with the Department was as a “true partner.” The undersigned finds no evidence of bias in this procurement process.
Second, CCP contends that Staywell’s cost reply is not financially feasible given what Staywell proposed regarding projected managed care savings, administrative cost reductions or efficiencies, and the cost of enhanced benefits. CCP supported this argument through the testimony of Edward Maszak, CCP’s senior vice president of Finance and chief financial officer, who it designated as a “financial expert for managed care organizations.”
As detailed in the Preliminary Statement section of this Recommended Order, the undersigned conducted a hearing consistent with section 90.702 and the requirements of Daubert
and its progeny, to determine whether Mr. Maszak was qualified to testify as an expert in this designated field. After conducting such a hearing, the undersigned permitted Mr. Maszak to offer his expert testimony in this designated field. The undersigned further cautioned that it was uncertain what extent Mr. Maszak’s expert testimony could aid the trier of fact in this bid protest proceeding, and further noted that the undersigned would gauge the credibility of the testimony and afford such testimony its appropriate weight, given Mr. Maszak’s inherent bias as an executive with CCP.
Mr. Maszak’s testimony demonstrated that he is a highly skilled and experienced certified public accountant who has relevant and extensive experience in the healthcare field, particularly with managed care organizations.
Mr. Maszak testified that he reviewed the financial information contained in Staywell’s reply, along with achieved savings reports it filed with Florida, and the financial reports of two other large Medicaid companies. Mr. Maszak also reviewed data he could find online, such as analyst reports and SEC reports on Yahoo! Finance. Mr. Maszak stated that he reviewed these various documents to conduct a feasibility study of Staywell’s ability to achieve the savings it provided in its reply. Mr. Maszak testified that he did not know if Staywell or
any of its affiliates achieved similar savings elsewhere, and did not have any other information about Staywell’s finances.
Mr. Maszak testified as follows as to the standards he followed in preparing this feasibility study:
Again, so WellCare in their application said they were going to reduce behavioral health, mental health services by 22 percent. They are going to save the State money. So I looked everywhere I could possibly look where that has been done.
So that’s the standard you have to meet when you do a financial feasibility study. You cannot just make a statement. It has to be corroborated with some kind of evidence, right? Just like in this proceeding. So that’s the standard that you have to meet as an accountant, a CPA, to certify, to attest that every single assumption in there is real.
So I looked high and low, everywhere I could find information to support that WellCare put in their application, and I could not find good sources to support anything that they made.
Mr. Maszak ultimately testified that, in his opinion, the award to Staywell is not financially feasible. He based his opinion on three areas: (a) the medical cost assumptions proposed; (b) the administrative cost reductions or efficiencies proposed; and (c) the amount of benefits, particularly expanded benefits, proposed. Mr. Maszak assumed, to achieve lower administrative costs, that Staywell would have to cut personnel and salaries. However, Mr. Maszak also testified that he had no
knowledge of Staywell’s internal operations other than the items and documents he reviewed as detailed in paragraph 90, supra.
Mr. Maszak’s feasibility study also failed to take into account the economies of scale in its administrative costs that Staywell may realize through offering services statewide.
Staywell offered the testimony of Jeff Skobel, its vice president of Regional Finance, who assisted in the preparation of Staywell’s cost proposal. Mr. Skobel testified that Staywell’s proposed savings, or managed care savings adjustment cuts, did not represent cuts in service, but changes in the utilization cost of the program. Mr. Skobel further testified that Staywell plans to achieve proposed savings by reducing avoidable hospitalizations and appropriate emergency room use through case management, using value-based purchasing to create financial arrangements with providers to incentivize increased qualitative care, and ensuring that behavioral healthcare patients adhere to their prescription schedules.
In sum, while Mr. Maszak is a highly qualified CPA who has expansive expertise in the healthcare field, his methodology and assumptions in ultimately opining that Staywell’s cost proposal was not financially feasible is directly rebutted by additional evidence that Staywell presented. Further, the evidence that Staywell presented as to its proposed savings under the ITN was also presented to and reviewed by the negotiation
team. The undersigned finds that Mr. Maszak’s expert opinion on the financial feasibility does not assist the undersigned in evaluating the agency’s proposed action, as the Legislature has prescribed in section 120.57(3).
CCP proposed the same rates as Staywell for the South/Southeastern Regional Cluster. The undersigned finds there is no credible evidence that demonstrates that Staywell’s proposed rates are not feasible.
Third, CCP argues that the proposed contract award to Staywell is contrary to competition because it provides too large a market share of Medicaid managed care procurements in Florida. The undersigned finds no legal basis for this argument, as discussed in the Conclusions of Law, and also finds there is no factual basis for this argument.
Mr. Maszak testified that, if Staywell receives all contract awards that the Department and AHCA have awarded it in procurements that are subject to protest, it will have 34.2 percent market share in Florida. Mr. Maszak, in looking at four other states, testified that no other plan in those states has a market share as great as Staywell’s in Florida, with the largest share by any one plan in those states being 27.87 percent.
Mr. Skobel testified that Mr. Maszak did not review plans with market shares larger than 27.87 percent, including states where only three plans operate and receive an almost equal
market share. Mr. Skobel testified that Staywell’s affiliates have market shares in other states, including Georgia, that are larger than the market share Staywell will have in Florida if it wins all contracts subject to protest.
Fourth, CCP argues that if the Department awards the contract to Staywell, it will prevent competition because no other vendor will be able to serve this population and gain experience. CCP’s current contract, which was awarded without competition, establishes it as the exclusive contractor providing integrated care services for the CMS Plan south of the I-4 corridor. The undersigned finds that the intended contract award is not contrary to competition.
CONCLUSIONS OF LAW
The Division has jurisdiction over the subject matter and the parties to this proceeding in accordance with sections 120.569, 120.57(1) and 120.57(3).
CCP challenges the Department’s intended award of the CMS Contract to Staywell. Pursuant to section 120.57(3)(f), the burden of proof in this matter rests with CCP as the party protesting the proposed agency action. See State Contracting & Eng’g Corp. v. Dep’t of Transp., 709 So. 2d 607, 609 (Fla. 1st
DCA 1998).
Section 120.57(3)(f) further provides that in a competitive procurement protest:
[T]he administrative law judge shall conduct a de novo proceeding to determine whether the agency’s proposed action is contrary to the agency’s governing statutes, the agency’s rules or policies, or the solicitation specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious.
The “governing statute” for the Department’s use of the invitation to negotiate process to procure the contractual services is section 287.057(1)(c). Section 287.057(1)(c)4.,
provides:
The agency shall evaluate replies against all evaluation criteria set forth in the invitation to negotiate in order to establish a competitive range of replies reasonably susceptible of award. The agency may select one or more vendors within the competitive range with which to commence negotiations.
After negotiations are conducted, the agency shall award the contract to the responsible and responsive vendor that the agency determines will provide the best value to the state, based on the selection criteria.
Additionally, section 287.012(4) defines “best value”
as:
[T]he highest overall value to the state based on factors that include, but are not limited to, price, quality, design, and workmanship.
The phrase “de novo proceeding” describes a form of intra-agency review. The purpose of the ALJ’s review is to “evaluate the action taken by the agency.” J.D. v. Fla. Dep’t of
Child. & Fams., 114 So. 3d 1127, 1132 (Fla. 1st DCA 2013). A de
novo proceeding:
[S]imply means that there was an evidentiary hearing during which each party had a full and fair opportunity to develop an evidentiary record for administrative review purposes. It does not mean . . . that the [ALJ] sits as a substitute for the Department and makes a determination whether to award the bid de novo.
Intercontinental Props., Inc. v. Dep’t of HRS, 606 So. 2d 380,
386 (Fla. 3d DCA 1992). “The [ALJ] may receive evidence, as with any formal hearing under section 120.57(1), but the object of the proceeding is to evaluate the action taken by the agency.” State
Contracting, 709 So. 2d at 609.
CCP, as the party protesting the Department’s intended award, must prove, by a preponderance of the evidence, that the Department’s proposed action is either: (a) contrary to its governing statutes; (b) contrary to its rules or policies; or
contrary to the specifications of the ITN. The standard of proof CCP must meet to establish the award to Staywell violates this statutory standard of conduct is whether the Department’s decision is: (a) clearly erroneous; (b) contrary to competition; or (c) arbitrary or capricious. See §§ 120.57(3)(f)
and 120.57(1)(j), Fla. Stat.; AT&T Corp. v. Dep’t of Mgmt. Servs., 201 So. 3d 852, 854 (Fla. 1st DCA 2016).
Florida courts have defined the “clearly erroneous” standard to mean “the interpretation will be upheld if the agency’s construction falls within the permissible range of interpretations.” Colbert v. Dep’t of Health, 890 So. 2d 1165, 1166 (Fla. 1st DCA 2004); see also Holland v. Gross, 89 So. 2d
255, 258 (Fla. 1956)(holding that when a finding of fact by a trial court “is without support of any substantial evidence, is clearly against the weight of the evidence or . . . the trial court has misapplied the law to the established facts, then the decision is ‘clearly erroneous.’”). However, if “the agency’s interpretation conflicts with the plain and ordinary intent of the law, judicial deference need not be given to it.” Colbert,
809 So. 2d at 1166.
An agency action is “contrary to competition” if it unreasonably interferes with the purpose of competitive procurement. The “contrary to competition” test forbids agency actions that: (a) create the appearance and opportunity for favoritism; (b) reduce public confidence that contracts are awarded equitably and economically; (c) cause the procurement process to be genuinely unfair or unreasonably exclusive; or
are abuses, i.e., dishonest, fraudulent, illegal, or unethical. See § 287.001, Fla. Stat.; Harry Pepper & Assoc., Inc. v. City of Cape Coral, 352 So. 2d 1190, 1192 (Fla. 2d DCA
1977).
Section 120.57(3)(f) requires that an agency action be set aside if it is “arbitrary, or capricious.” An “arbitrary” decision is one that is “not supported by facts or logic, or is despotic.” Agrico Chemical Co. v. Dep’t of Envtl. Reg., 365 So. 2d 759, 763 (Fla. 1st DCA 1978). A “capricious” action is one which is “taken without thought or reason or irrationally.” Id.
To determine whether an agency acted in an “arbitrary or capricious” manner involves consideration of “whether the agency: (1) has considered all relevant factors; (2) given actual, good faith consideration to the factors; and (3) has used reason rather than whim to progress from consideration of these factors to its final decision.” Adam Smith Enter. v. Dep’t of
Envtl. Reg., 553 So. 2d 1260, 1273 (Fla. 1st DCA 1989). In Dravo Basic Materials Co. v. Dep’t of Transp., 602 So. 2d 632, 632 n.3
(Fla. 2d DCA 1992), the court stated:
If an administrative decision is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, it would seem that the decision is neither arbitrary nor capricious.
CCP HAS STANDING TO PROTEST THE CONTRACT AWARD PROCESS
The Department and Staywell challenge CCP’s standing to file a protest against the Department’s intended award of the CMS Contract to Staywell. Standing is a jurisdictional, threshold issue in a chapter 120 proceeding. Generally, standing is not dependent on the merits of a party’s case, but rather the
equivalent of assessing subject matter jurisdiction. See Grande
Dunes, Ltd. v. Walton Cnty, 714 So. 2d 473, 475 (Fla. 1st DCA 1998). The Division lacks jurisdiction to consider a petition’s merits unless and until a petitioner affirmatively establishes standing. See Westinghouse Elec. Corp. v. Jacksonville Transp.
Auth., 491 So. 2d 1238, 1240-41 (Fla. 1st DCA 1986).
To have standing to initiate a bid protest, a petitioner must establish that an agency’s decision “adversely affected” its substantial interests. See §§ 120.569(1) and 120.57(3)(b), Fla. Stat. A petitioner shows that it was “adversely affected” by demonstrating that it would be eligible for the award of the contract if its bid challenge is successful. See Preston Carroll Co. v. Fla. Keys Aqueduct Auth., 400 So. 2d 524, 525 (Fla. 3d DCA 1981); Madison Highlands, LLC v. Fla. Hous.
Fin. Corp., 220 So. 3d 467, 473 (Fla. 5th DCA 2017)(“The second lowest bid establishes that substantial interest [to challenge the proposed award] because if the lowest bid is disqualified, the second lowest bid may receive the award.”).
The evidence presented demonstrated that CCP was a responsible Respondent and that CCP’s reply to the ITN was responsive. The Department invited CCP (and all other Respondents) to negotiations after the evaluation process. After negotiations, the Department’s best value matrix ranked CCP as the second-ranked Respondent. Based on this evidence, CCP has a
substantial interest to be determined and, thus, has standing to bring this protest.
THE MERITS OF CCP’S PROTEST
CCP has waived its right to challenge the terms, conditions, or specifications in the ITN.
Section 120.57(3)(b) provides the timeframe in which a party may challenge the terms, conditions, or specifications of an agency’s solicitation:
With respect to a protest of the terms, conditions, and specifications contained in a solicitation, including any provisions governing the methods of ranking bids, proposals, or replies, awarding contracts, reserving rights of further negotiation, or modifying or amending any contract, the notice of protest shall be filed in writing within 72 hours after the posting of the solicitation. . . . Failure to file a notice of protest or to file a formal written protest shall constitute a waiver of proceedings under this chapter.
The purpose of the requirement for timely filing of a protest to the terms, conditions, or specifications of a solicitation is to allow the agency to correct or clarify the plans and specifications prior to accepting proposals, in order to save expense to the bidders and to assure fair competition among them. See Consultech of Jacksonville, Inc. v. Dep’t of
Health, 876 So. 2d 731, 734 n.5 (Fla. 1st DCA 2004); Capeletti Bros., Inc. v. Dep’t of Transp., 499 So. 2d 855, 857 (Fla. 1st
DCA 1986).
The failure to file a notice of intent to protest within 72 hours of the posting of the solicitation constitutes a waiver of the right to challenge the terms, conditions, or specifications of the solicitation. See Consultech, 876 So. 2d at 734 (“Because Consultech failed to file a protest to the terms and conditions of the FRP as required by section 120.57(3), Florida Statutes, its belated attempt to challenge the award to ISF on this basis must fail.”); Capeletti Bros., 499 So. 2d at
857 (“A failure to file a timely protest constitutes a waiver of chapter 120 proceedings.”).
In Cushman and Wakefield of Florida, Inc. v.
Department of Management Services, Case Nos. 13-3894BID and
13-3895BID (Fla. DOAH Jan. 24, 2014; DMS Feb. 5, 2014), the
administrative law judge concluded that “Vendors cannot challenge specifications once they have waived their protest rights even where they claim such specifications violate Florida Statutes.”
CCP did not timely protest the terms, conditions, or specifications in the ITN. Accordingly, the undersigned concludes that CCP has waived the following issues raised in its Amended Protest.
Whether the Department has the authority to award the contract arising out of the ITN.
The ITN specifications, which CCP did not timely protest, described the scope of services for the contract being
procured through the ITN, including the Department’s role under the contract being procured.
Regardless, CCP’s arguments are unavailing on the merits as well. CCP contends that the Department proposes to wholesale delegate its responsibilities under the AHCA Prime Contract. CCP has provided no factual basis for the argument. Additionally, section 391.026(1) provides that the Department has the power, duty, and responsibility to “provide or contract for the provision of health services to eligible
individuals.” The Legislature has directed that AHCA, pursuant to section 409.974(4), enter into a single, statewide contract for the provision of the CMS Plan. The undersigned has found nothing within that statute or chapter 409 that prohibits the Department from further delegating certain responsibility under the CMS Plan. Additionally, as an executive branch agency, the Department generally has the power to contract as necessary under the provisions of chapter 287. See §§ 20.43, 287.012(1), Fla.
Stat.
Whether the contract being procured violates the single state agency requirement under federal law.
The ITN specifications, which CCP did not timely protest, described the scope of services for the contract being procured through the ITN, including the Department’s role under the contract being procured.
Regardless, CCP’s arguments on the merits are unavailing as well. CCP argues that the contract to be procured by the Department to operate the CMS Plan would violate the federal requirement that a single state agency make payments under Medicaid. See 42 U.S.C. § 1396a(a)(5); 42 C.F.R. § 43.10.
As previously noted, the Legislature has designated AHCA as the single state agency authorized to make payments under Title XIX of the Social Security Act. See § 409.902(1), Fla. Stat.
Nothing about the contract being procured through the ITN will change that.
Whether the contract being procured violates federal law regarding freedom of choice.
The ITN specifications, which CCP did not timely protest described the scope of services for the contract being procured through the ITN, including the Department’s role under the contract being procured.
Regardless, CCP’s arguments on the merits are unavailing as well. CCP argues that the contract to be procured through the ITN would violate federal freedom of choice requirements, which provide that a Medicaid managed care organization or similar entity may not restrict a qualified Medicaid recipient’s choice of providers. See 42 U.S.C.
§ 1396a(a)(23); 42 C.F.R. § 431.51. However, under the current CMS Plan, as well as the contract to be procured through the ITN,
an individual eligible for the CMS Plan has, or will have, a choice of the CMS Plan or an MMA Plan.
Whether the Department’s failure to provide CCP a preference as a PSN was contrary to governing statutes, rules, or the ITN specifications.
The ITN did not provide for a PSN preference, and CCP failed to protest. Further, CCP subsequently asked, and the Department responded in ITN Addendum 3, that “requirements are reflected in the ITN.” Regardless, CCP’s arguments on the merits fail. The PSN preference is contained in section 409.974(1), which sets forth regional plan number limits applicable to AHCA’s SMMC procurement. However, the PSN preference does not apply to the ITN because the CMS network is not subject to the regional plan number limits in section 409.974. See § 409.974(4), Fla. Stat.
Whether the Department’s failure to present a business case pursuant to section 287.0571(4), Florida Statutes, was contrary to governing statutes, rules, or the ITN specifications.
The ITN was silent on a business case and CCP could have timely protested the ITN’s specifications, but failed to do so. Generally, section 287.0571(4) requires that an agency complete a business case for an outsourcing project that has an expected cost in excess of $10 million within a single fiscal year. However, section 287.0571(3)(a) provides that a business case requirement does not apply to a procurement for services listed in section 287.057(3)(e), including health services and
Medicaid services, as provided in section 287.057(3)(e)5. and 7. The undersigned finds that although CCP has waived this argument, its arguments on the merits of this issue fail as well.
Whether the Department’s award of a single, statewide contract was contrary to governing statutes, rules, or the ITN specifications.
The ITN specifications which CCP did not timely protest described the scope of services for the contract being procured through the ITN, including the Department’s intent to award a single, statewide contract, and that the Department would only award less than a statewide contract if it did not receive an acceptable proposal for a statewide contract. CCP failed to protest this specification and has waived this argument.
The Department’s intended award of the contract does not violate chapter 409.
CCP claims that the Department’s intended award of the contract violates various contracting provisions of chapter 409 applicable to Medicaid managed care. CCP argues that the intended award violates section 409.974(3), which provides that “[t]he aggregate enrollment of all specialty plans in a region may not exceed 10 percent of the total enrollees of that region.” CCP contends that the intended award will violate section 409.974(3), because Staywell’s aggregate enrollment in specialty plans in a given region will exceed 10 percent of total enrollees in that region. However, this argument fails for two reasons:
(a) the Legislature stated, in section 409.974(4) that CMS is not subject to the procurement requirements or regional plan number limits of section 409.974; and (b) the 10 percent cap applies to the aggregate number of specialty plans for all providers in a given region.
CCP also argues that the negotiation team violated governing statutes because it did not apply the preferences in section 409.966(3)(c), as referenced in evaluation criteria 4, 18, 28, and 29, or the quality selection criteria in
section 409.974(2) in making its best value determination. These provisions apply to procurements that AHCA conducts. However, the instant procurement for the CMS Plan is not subject to the procurement requirements of these statutory sections. See
§ 409.974(4), Fla. Stat. Further, Ms. Young credibly testified that the ITN’s reference to section 409.966 was a typographical error.
The Department did not violate section 287.057(1)(c)5.
CCP argues that the Department violated section 287.057(1)(c)5., which requires:
The contract file for a vendor selected through an invitation to negotiate must contain a short plan statement that explains the basis for the election of the vendor and that sets forth the vendor’s deliverables and price, pursuant to the contract, along with an explanation of how these deliverables and price provide the best value to the state.
The undersigned notes that the Department has only noticed its intent to award the contract to Staywell, and thus does not have a “contract file” with Staywell at this point. Further, the Department may add the “short plain statement” after it enters into a contract. See Keystone Peer Review Org. v. Ag. for Health
Care Admin., Case No. 10-9969BID,RO at 141 (Fla. DOAH Jan. 12, 2011; AHCA Apr. 27, 2011).
The Department’s intent to award the CMS Plan contract to Staywell is not clearly erroneous, contrary to competition, or arbitrary or capricious.
CCP argues that the Department’s use of the best value matrix during negotiations was contrary to competition, arbitrary and capricious.
As detailed in the Findings of Fact, the best value matrix utilized the criteria from the ITN. CCP has failed to demonstrate that the Department applied any undisclosed criteria in this process. The evidence presented indicates that the Department gave all Respondents a full and fair opportunity to provide information to the negotiation team to demonstrate how they would offer best value to the state.
CCP contends that because the best value matrix introduced the concept of “added value” to the negotiation topics, the negotiation team made impermissible material changes to the selection criteria during the negotiations that the Department did not disclose to the Respondents. However, the
evidence presented flatly contradicts this argument. Department witnesses credibly testified that “added value” simply reflected the negotiation team’s belief that certain items in the best value matrix (which were ITN criteria) were important. Further undermining this argument, CCP provided the negotiation team with its “CMS Additional Offerings to the Department” that included items CCP hoped the negotiation team would consider.
CCP also argues that the negotiation team deleted items from the best value matrix, constituting material changes to the selection criteria during negotiations that were not disclosed to the Respondents. Again, the evidence contradicts this argument. During the negotiations, the negotiation team removed items from the best value matrix that were nonnegotiable and that all Respondents had agreed to. The removal of these items from the best value matrix had no impact on the negotiations.
The undersigned further concludes that CCP’s arguments concerning whether the Department erred during its scoring of seven items discussed in Findings of Fact, paragraphs 71-77, are contrary to the evidence presented at the final hearing, and fail as a matter of law.
The negotiation team’s use of the best value matrix as a tool to aid it in its best value determination was not contrary to any governing statute or the ITN, was not contrary to
competition, and was not done irrationally or unreasonably. The negotiation team used the best value matrix to focus its efforts on key criteria of the ITN in determining which of the three Respondents offered the best value to the state. The undersigned concludes that CCP has failed to meet its burden that the use of the best value matrix was in error.
CCP failed to show that Staywell’s cost reply is not feasible.
As discussed in Findings of Fact, paragraphs 87-100, CCP failed to show that Staywell’s cost reply is not feasible, or that Staywell is not a responsive and responsible vendor with which the Department can contract.
CCP did not meet its burden of proving that the Department’s intended decision to award the contract arising out of the ITN to Staywell is contrary to the Department’s governing statutes, rules, or the ITN specifications. CCP also failed to demonstrate that the Department’s determination that Staywell will provide the best value to the state was clearly erroneous, contrary to competition, arbitrary, or capricious.14/
