Penquis and Waldo CAP will fight for $1B Medicaid contract in court

By Erin Rhoda, Bangor Daily News Staff

Two Maine nonprofits will continue to fight the state’s decision to award a potentially $1 billion contract to an out-of-state company to arrange transportation for Medicaid patients with no other way to get to appointments.

Penquis Community Action Agency and Waldo Community Action Partners, which provide a range of services to low-income residents in much of eastern and midcoast Maine, said they will file appeals in Superior Court after their first appeals to the Maine Department of Administrative and Financial Services failed.

Modivcare, Penquis, and Waldo CAP currently hold contracts to arrange Medicaid transportation services in select regions of Maine, and they submitted bids last summer to continue doing so. Transportation to medical appointments is a covered service under Medicaid for those who have no other way to get to and from check-ups, scheduled surgeries and medication pick-ups.

The Maine Department of Health and Human Services announced in October that it had picked Modivcare, the nation’s largest broker of non-emergency medical transportation services, to arrange rides across the entire state. The decision would end Penquis and Waldo CAP’s role in July and eliminate revenue they use to pay for the infrastructure for their wider range of transportation services, such as to get people not on Medicaid to dialysis or cancer treatments. 

Penquis and Waldo CAP filed an administrative appeal, and, after holding a hearing in March, the Department of Administrative and Financial Services announced on April 24 that it was upholding DHHS’ decision to give Modivcare a two-year contract, with the potential for renewals for up to 10 years. 

“We are surprised and rather shocked by the panel’s decision,” said Alfred Falzone, an attorney for Penquis from the law firm Eaton Peabody. “Penquis firmly believes that the record shows that DHHS failed to properly consider the bidders’ past performance, failed to fairly and accurately review and score the proposals, and failed to explain how they actually scored the proposals.”

In its decision letter about the administrative appeal, however, the department said the two organizations did not meet their burden to show with clear and convincing evidence that DHHS’ decision-making process to award the contract to Colorado-based Modivcare violated the law, contained irregularities that created a fundamental unfairness or was arbitrary or capricious.

Penquis had argued that reviewers scored proposals arbitrarily. The evaluation notes kept by one reviewer, for example, showed that she copied and pasted her comments about one of Penquis’ proposals to her notes on Penquis’ proposals for different regions, even though the proposals were different. The reviewer also wrote down that Penquis had not met a certain requirement in its bid even though it had.

But the appeals board wrote in its decision that reviewers had a large volume of pages to read — about 19,000 — and that reviewers made their decisions on scoring when they got together for a consensus review process, not individually, so there was no evidence of “a fundamental unfairness.”

In addition, Waldo CAP argued that DHHS should not have deducted points in its scoring of the organization’s proposal — losing it the contract — for not completing two out of three fields describing its service to the Belfast region because it put the required information in the immediate prior section of its proposal. 

But the appeals board decided that DHHS’ decision was not arbitrary or capricious because DHHS had previously cautioned bidders to follow all formatting instructions or else face potentially lower scores. 

Kara Hay, president and CEO of Penquis, said the organization was deeply disappointed by the appeal panel’s decision and that the Medicaid transportation contract has historically helped support Penquis’ “other underfunded, critically needed services.”

“If we are unsuccessful in our Superior Court appeal of this decision, we will need to take stock of how the loss of this program impacts the services we are able to offer to our community,” Hay said.

Monica Pettengill, development director for Waldo CAP, said the agency was “assessing next steps” and that it would appeal to the Superior Court.

In a statement, Modivcare said it remains “focused on improving and expanding access to efficient and safe transportation across the state.”