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    Phil Ammann
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    A health and life insurance company has filed a protest with the Florida Department of Management Services, which recently rejected bids to provide HMO benefits to the state’s employees.

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    Aetna Life Insurance Company protest

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    A health and life insurance company has filed a protest with the Florida Department of Management Services, which recently rejected bids to provide HMO benefits to the state’s employees.

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    1K views17 pages

    Aetna Life Insurance Company Protest

    Uploaded by

    Phil Ammann
    A health and life insurance company has filed a protest with the Florida Department of Management Services, which recently rejected bids to provide HMO benefits to the state’s employees.

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
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    "FOLEY FOLEY & LARDNER LLP. 16 UNIT AMIE $9. Jane 17, 2016 (VIA HAND DELIVERY Diane Wint ‘Agency Clerk Department of Management Services 4050 Explanade Way, Suite 160 Tallahassee, Florida 32399-0950 apsitiy con Ak RE: Protest Bond ~ Aetna Life Insurance Company Protest of the Department of Management Services’ Notice of Rejection of All Replies in ITN 15/16-005 — Insured Health Maintenance Organization Benefits and Self Insured Health Plan Services: Dear Ms, Wint Pursuant to the requirements of section 120,57(3), Florida Statutes, enclosed please find ‘Aetna Life Insurance Company's protest bond in the amount of $3,100,000.00. This bond is being hand delivered along with the Formal Bid Protest Petition With Regards to Rejection of All Replies in ITN 15/16-005. Ifyou have any questions regarding the enclosed, please feel free ‘9 contact this office. Singzrely, STATE OF FLORIDA, DEPARTMENT OF MANAGEMENT SERVICES TEN NO. DMS 15/16-005 AETNA LIFE INSURANCE COMPANY Petitioner, STATE OF FLORIDA, DEPARTMENT OF MANAGEMENT SERVICES, Respondent FORMAL BID PROTEST PETITION WITH REGARDS TO REJECTION OF ALL REPLIES Petitioner, Actma Life Insurance Company (“Aetna”), by and through its undersigned attomeys, pursuant to sections 110.123, 120.569, 12057(), and 120.573), Florida tatates, and Rule 28-110.004, Florida Administrative Code, files this formal writen protest with respect to te State of Florida, Department of Management Services’ (the “Department” or the “DMS”) intended decision to eect all replies received in response to ITN No, DMS 15/16-005, enitled “Insured Health Maintenance Organization Benefits end Sel-nsured Health Plan Services” the “ITN, In suppor of is petition, Aetna states a follows 1. Thisisa forma writen protest led pursuant to sections 110.123, 120.565, 120.57(), and 120.578), Florida Statutes, and Rule 2-110.004, Florida Administrative Code. 2 Pursuantto sections 120.57 and 287,042, Florida Statutes, Aetna has, concurently wit he ing ofthis potest, posted a protest bond with the DMS in he amount of $3,100,000.00. A copy ofthe bond is attached hereto as Exhibit A. FLED I THE CFFICE OF THE LERKOF sanassssu82 ‘THE PARTIES 3. Aetnais a Connecticut corporation authorized to do business in Florida. Its principal business address is 151 Farmington Avenue, Hartford, Connecticut 06156, For ‘purposes ofthis proceeding, Aetna’s address is that ofits undersigned attorneys. 4. Aetnais one ofthe nation’s premier insurance providers, and offers a wide range ‘of insurance and employee benefits products fo private and governmental entities across the nation, serving approximately 23.5 million medical members. Aetna provides programs and services to help control rising health care costs while striving to improve the quality of heath care provided to its members. 5. DMSis an agency of the State of Florida created by section 20.22 ofthe Florida Statutes, and has its principal place of business at 4050 Esplanade Way, Tallahassee, Florida 32399, In accordance with sections 20,22(h) and 110.123, Florida Statutes, the Division of State Group Insurance was created within DMS for the purpose of managing all aspects of state «employee benefits, as authorized by section 110.123, Florida Statutes. In fulfilling this function, the Division of State Group Insurance contracts with Health Maintenance Organizations (“HMOs”) or HMO-siyle plans as one option for state employee health care coverage. PROCEDURAL BACKGROUND ‘The ITN 6 On September 22,2015, the DMS released the ITN, seeking replies fom vendors to provide Insured Heath Maintenance Organization Benefits and Sel-Insered Heath Plan Services 7. ‘The DMS subsequently released six addenda modifying certsin provisions of, and the timeline for, the ITN. esozags782 IL. The Evaluation, Negotiation, and BAFO Processes 8, Pursuant tothe terms ofthe ITN, vendor replies were due on November 12", 2015. The replies were then seored by an evaluation team over the period of Nevemiber 12" through December 34,2015, anda public meeting of the evaluation team was held on December 9%, 2015 at which the technical scores formulated by the evaluators were submitted, 9. Following the initial evaluation of replies to the ITN, certain vendors were invited to Phase Two of the procurement, Negotiations, pursuant to section 4.2.2 ofthe “TN. Section 4.2.2 provided in relevant part as follows: ‘The Department will establish a negotiation team to conduct the negotiations, assess the final value proposition ofeach vendor, and make an award recommendation to the Department. [Emphasis added] 10. Section 4.4.1 of the ITN similarly provided that: ‘The Department will establish a negotiation team to condust negotiations and make award recommendations. The negotiation team will use the Selection Criteria to determine best value; however, the negotiation team is not bound by the phase ore scoring and will have full authority to reassess any evaluaticn pphase determinations and may consider all information that comes to ts atention during the negotiations. [Emphasis added] 11. As the ITN made clear, the “Goal of Negotiations” was “to enable the Department ‘o determine which vendor(s) presents the best value and to establish the principle terms and conditions of such contract.” (ITN § 4.4.2). 12, The ITN contemplated negotiation sessions between vendors and the Department during the period from December 14, 2015 through April 21, 2016, and a lengthy negotiation process was in fact undertaken —requiring a great commitment of resources from both vendors and the Department. Multiple negotiation sessions were held with each vendor, including assesses lengthy negotiations between the DMS and Aetna on January 12, 2016, January 21, 2016, February 5, 2016, February 12, 2016, February 23, 2016, and April 14,2016, 13. Inconjunetion with negotiations, the ITN also reserved to DMS the right to request Revised Replies and Best and Final Offers from the vendors “until itis satisfied that it thas achieved the best value forthe State.” (ITN § 44.4), 14, The Department exercised its right to request Best and Final Offers, with three separate Best and Final Offers being requested by the DMS, which Aetna submitted on March 17,2016, April 22, 2016, and May 4, 2016. 15, As described above, section 4.44 ofthe ITN allowed the DMS to continue requesting Best and Final Offers “until it [was] satisfied that it [had] achieved the best value for the Stat.” The Department did so, apparently becoming satisfied that it had achieved the best ‘value forthe State of Flo:ida following the May 4, 2016, Best and Final Offer. 16. The response, negotiation, and formulation of Best and Final Offers imposed 2 ‘tremendous amount of work on the vendors competing for the State's business and secking to best serve the State of Florida's employees, and required a monumental expenditure of resources from the vendors. 17. Inthe ease of Aetna, hundreds of thousands of dollars were invested int this nine ‘month procurement process, with more than 30 Aetna employees involved in the procurement process at any given time over the time frame of the ITN process, and thousands upon thousands ‘of man hours expended on formulating a fully responsive reply, negotiating with the State of| Florida, and ensuring that Aetna provided the best possible value to the State and its employees. ‘Acina undertook these eflors in reliance on the DMS's assurances that it would actually follow ‘the procedures that it said would occur, and to ensue that Aetna presented the best value to the asszasssare2 State and would receives eoitat award as called for inthe ITN, Unfortunately thas not what utimtely occured, as DMS elected to instead ignore the terms ofthe ITN and eject al replies, without reason inthe waning seconds ofthe procurement following the completion of each of ‘he evaluation and negotiation steps called for nthe TN, 1. The Departments Scheduled Award Mesting and Rejection of All Replies 18, Following he completion ofthe entirety ofthe evaluation and negotiation processes set forth at the ITY, at he time the negotiation tear was stisied that it had achieved the bes value forthe State of lori, the ITN called for one final phase ~ the “Final Selection and Notice of Intent to Award Contract.” jon team would engage in a majority vote a called 19, During ths phase, the nego forby section 462 ofthe ITN, as tothe award that would provide the best valve. Pursuant to the terms ofthe ITN, the Department wast “select for award the responsive and responsible ‘vendor() that provides the best valu tothe State based on the Selection Criteria in subsection au 20. Iisclear thatthe Department had in fact, entered this final phase of the procurement, Pursuant tothe express terms of section 4.44 ofthe TN, Best and Final Ofer ould be requested unl the Department was satisfied tht best value had been achieved, Thus, the decision o cease requestne Best and Final Offers and move forward to scheduling a meeting indicate the Departments satisfaction that best value ha, infact, been achieved, Simply put, ‘he negotiation team had conplced ther review, achieved bes value, and was ready to mee in public to discuss their review and reveal thes deision, The Department initially scheduled and noticed a public meeting for May 16,2016, at which the negotiators were to discuss the vendors’ best and final offers and make an award recommendation, This meeting, however, was cancelled ‘without any rationale or reason offered. The Department again scheduled a meeting at which the negotiators would formulate an award recommendation for May 23,2016. This meeting too was cancelled without any explanation or reason offered 21. Finally, the Department scheduled a public meeting for 9 AM on Friday, May 27, 2016 ~the Friday rir tothe Memorial Day weekend, Vendors made plans around travelling to or staying in ~ Tallahassee to attend this meeting, anxious and ready tose the DMS finally follow trough and complet is process by making an avard recommendation, The vendor representatives who did so, however, received a shock: when they arrived on the DMS campus at te designated locaton forthe public meeting onthe morning of May 27,2016, they found a notice taped tothe door ofthe building declaring thatthe award recommendation public meeting ofthe negotiators scheduled for that morning had been cancelled as wel, 22, Itis evident that the DMS negotiation tam had concluded negotiations and were ‘prepared to old the meeting at which they could discus the Best and Final Offers and prepare an award recommendation ~ in fact the Department, three separate times, scheduled a meeting for them to do just that. Yet repeatedly, and in the case ofthe final meeting a matter of merely 4a hour or two before the meeting was scheduled to begin, the DMS cancelled the meeting and prevented the negotiators from publicly making a recommendation to award. 23, Following the cancellation of the final public meeting at which a recommendation ‘of award was scheduled to be formulated, the DMS adopted a position of radio silence, leaving vendors in the dark as to both the status of the procurement and when a recommendation of award would be made, 24. DMS finally re-emerged in tis procurement over two weeks later, on June 14, 2016, to posta notice of its intent to reject all replies and re-advertise this procurement. No ensn.309782 explanation for doing so was ever publicly articulated, nor was a public meeting ever held at ‘which the negotiators could formulate a recommendation that no award would be made and the procurement would instead be re-adverised, asthe ITN contemplated would oceurin such circumstance. Instead, the Department simply posted a notice stating its intent to reject all replies without any contemporaneous explanation or justification 25. Asaresult othe Department's arbitrary and unexplained decision to reject all replies, the negotiation team was prevented from fulfilling one ofits key and mandatory roles under the terms ofthe ITN: making an award recommendation othe Department. Rather than hearing the recommendation ofthe negotiation team, who had conducted the several month long negotiation process, and bringing this nine month procurement its proper eonelusion ~an award recommendation that could then be acepte or rejected by the Department's Secretary, the Department elected to depart from the terms ofthe ITN and prevent the result ofthe negotiations proces and corclusions ofthe negotiation team fom eve being publicly known by improperly and arbitrarily rejecting all replies, without any meeting to recommend such a result ‘or any contemporancously documented legitimate reason for doing so. SUBSTANTIAL INTERESTS 26, Aetna submited a fly responsive reply that represented best value tothe State of Florida and, thus, was ¢ vendor ented to an award recommendation prior to the Department's arbitrary decision to instead reject all replies. Further, Aet invested substantial resources in preparing and submitng such a reply that, under any proper analysis, should have and would have resulted inan award to Aetna, Therefore, Aetna hes standing to maintain this challenge to ‘the DMS's intended decision to reject all replies snceasesae STATEMENT OF ULTIMATE FACTS ALLEGED 27. Aetaa submited a reply in response tothe TTN that wes responsive in all ways anu which provides best value tothe State, yet DMS has elected ~ despite having conducted & thomugh and compliant process that properly shovld have resulted in an award to Aetna ~ to instead reverse course and reject all replies 28. Based upon the extremely aresive tems ofthe Best and Final Offer put forth by Aetna, as well as Act's knowledge ofthe industry, Acta submited a Best and Final Offer providing best value to the State of Florida, and would have received a contract avid had the awa meeting not been canceled athe last minute without explanation, and was poised to receive - sutstantial amount of busines from the State of Florida 29. Notwithstanding the outstnding offer submitted by Aetna, as well as the extremely lenghy, nine month procurement and negotiation process ~ requiring the expenditure of huge amounts ofboth human and monetary resources on the part ofboth the State and the vendors ~ and in contravention ofthe clear terms ofthe ITN, the DMS elected atthe literal last minute — within 2 hours of when the 9 AM recommendation of award public meeting was to occur on May 274, 2016 to cancel the scheduled public meeting at which an award recommendation was to be formulated. "No explanation for doing so was provided, and there is no information suggesting that such a contemporaneous explanation ever existed 30. Intaking such ation, the DMS acted in ee contravention to the tems ofits ITN, hich provided at section 46.1 that “[Jhe Department will select for avard the responsive and responsible vendor() that provides the best value tothe State...” emphasis added} and which, Provided unequivocally at section 4.6.2 that “(t]he Department’ negotition team will develop a aenasssarn2 recommendation as to the award that will provide the best value.” [Emphasis added] Because the May 278, 2016, meeing st which this was to occur was abrply cll off, andthe process was never reconvened wi another meeting todo s, the Deparment filed ently to undertake the process thatthe ITN unequivocally provided would be followed in this ITN 31, Following the cancellation of the award meeting, the DMS continual to offer no rationale or justification for its actions, and the process instead fll entirely silent until June 14%, 2016, At that time, the Department fully abandoned its prior couse of action and notced its intent to reject al replies received and readvertise the ITN. At no time did the Department, ata properly noticed public meeting, formulate a decision that no award should be made, as section 4.6.1 of the TIN provided would occur if the negotiation team determined that no award was in the best interests of the State, nor has a recommendation from the negotiation team been formulated that could subsequently be accepted, or rejected in favor of @ rejection of all replies, by the Department's Secretary as called for by Section 4.6.3 of the ITN. 32, In short the TIN required a recommendation of award meting to beheld, and provided two paths by which the DMS could eles to reject all replies rather than making an award following negotiations: ier (1) the negotiators, at their recommendation of avard public sting, coud formulate a recommendation to make no awards (8 contemplated by sexton 46.1 of the ITN); oF @) the DMS Secretary, afer receiving a recommendation of avard fom the repoition team following their public meeting, could elect to reject the negotiators’ recommendation and instead reject ll eplies (es contemplated by secon 4.63 ofthe ITN), The DMS, however, did nether ofthese two things 33. Instead, the DMS fled entirely to hold the requied recommendation of award ‘mesing, snd then emerged from behind is vil of sereey to post a eetion ofall replies without any public discussion as to why all replies were being rejected, or any contemporancosly niculated reason for doing so. This course of action is prohibited under the clear terms ofthe ITN and Florida procurement law. 34. In shor, DMS's desision to ignore the ITN process and isproperly reject all replies is an arbitrary decision that is not based upon any rational or lawful justification for pursuing suc a course of action, and accordingly must be reversed DISPUTED ISSUES OF MATERIAL FACT 35, Aetna incomporates Paragraphs 1-36 as filly stated herein, Disputed issues of raterial fact and law exist and enile Aetna to a formal administrative hearing pursuant to sections 120.571) and 120 $7(3), Florida Statutes 36. As Aetna has, to dats, received no records from DMS relating to the rejection of all replies or the reasons for adopting such a course of action, Aetna reserves he rght to amend this Formal Write Protest, including to assert additional ultimate fats alleged or aditionl disputed issues of materia fact, a it lars of ational fats through the discovery process in this proceeding andthe review of relevant records, 37. The disputed issues of material fact and law known to Aetna a this time ince, ‘but are not nite to the following 4. Whether the DMS's decison to reject ll eplis is ilega arbitrary,

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