PROVIDENCE, R.I. (WPRI) – Rhode Island is starting over on a bidding process for the state’s huge Medicaid managed care contract, worth $7 billion over five years, effectively reopening the door for disqualified insurance companies to try again.

The R.I. Department of Administration confirmed the decision shortly after 4 p.m. Friday, citing policy changes made by federal regulators related to the Medicaid program – meaning the contract language would need to be updated and the process would have to start over. 

But the decision also comes just days after Target 12 first requested information about Blue Cross Blue Shield of Rhode Island’s bid, which had been submitted with a blank CD and no paper copy, raising questions about whether Rhode Island’s largest insurance company would be disqualified. 

Blue Cross Blue Shield refused to answer questions about the issue, and the state didn’t respond to multiple requests for comment on the matter before announcing the process would start over.

A document obtained by Target 12 shows state officials discovered the problem with the Blue Cross CD on March 8, and leaders at the Executive Office of Health and Human Services sought to scrap the entire bidding process soon after. But purchasing officials at the Department of Administration blocked the health agency from doing that, and in April repeatedly told Medicaid staffers to pick up the bid documents and move forward.

On April 27, Health and Human Services leaders cited the revised federal regulations as a new reason to throw out the original bids, and purchasing officials signed off on the decision Friday.

It’s unclear when Blue Cross learned about its disqualification. “We cannot discuss our bid at this time as the state is still in the midst of its procurement process,” Melanie Coon, a spokesperson for the insurer, told Target 12 earlier this week. She directed a follow-up question to the state.

This isn’t the first time there’s been an issue with the Medicaid bidding process, which will eventually turn into the most lucrative state contract awarded in Rhode Island’s state government.

As Target 12 first reported in March, Tufts Health Plan submitted its bid for the contract two minutes after the deadline, effectively disqualifying them from the process. Tufts blamed traffic ahead of a snowstorm.

The elimination of both Tufts and Blue Cross could have benefited the four remaining companies who apparently submitted their bids correctly: MolinaHealthcare of Rhode Island Inc., Neighborhood Health Plan of Rhode Island, United Healthcare of New England, and Commonwealth Care Alliance.

Under the current Medicaid managed care contact, which will expire a year from July, Neighborhood administers coverage for about 174,000 patients, while United Healthcare has 97,000 patients and Tufts has 17,000. The three companies together handle insurance for about 85% of all Medicaid recipients in Rhode Island. (The rest are not in managed care programs.)

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.