LITTLE ROCK -- The firm providing the technology for the federal small-business health insurance exchange used by Arkansas and more than 30 other states was hired Wednesday to supply the technology for an Arkansas-based version.
In a 7-2 vote, the Arkansas Health Insurance Marketplace's board hired Reston, Va.,-based hCentive to supply the technology for an Arkansas-based exchange and operate it through February 2018 for just under $7.2 million.
The price was reduced from an $8.9 million proposal the company presented Jan. 23 and its original offer of more than $9.9 million.
The other finalist for the contract, Mountain View, Calif.,-based Get Insured, also known as Vimo Inc., withdrew its bid Monday after the marketplace staff began investigating a report that two people had attempted to improperly contact a board member about the contract.
Get Insured had asked for $16.5 million, a reduction from the $25.1 million proposal the company presented at the earlier meeting. The company's original bid totaled $34.9 million.
"We're euphoric," Peter McCann, chief business development officer for hCentive, said after the board's vote.
The board's vote came after Tracey Dennis, the marketplace's staff attorney, gave a report on her inquiry into attempted communication with board members she said may have violated the board's procurement rules.
She said she didn't verify whether the attempts were directed by any company or violated rules. But she said a board member's comments to the Arkansas Democrat-Gazette about hCentive "most likely" violated a rule limiting communication about a contract while bids are being evaluated.
Fred Bean, president of a benefits consulting firm, was quoted in Tuesday's newspaper as saying his firm found it difficult and time-consuming to enroll a company in coverage through the federal small-business exchange but hCentive could make Arkansas' exchange more user-friendly if it won the contract.
Bean said after the meeting he didn't intend to violate the rules.
After the vote, at the request of board member Mike Castleberry of Little Rock, the board met for an hour in executive session to discuss an undisclosed personnel matter. The board didn't take any action on the matter after the closed session.
In addition to building the technology for the federal small-business exchange, which is accessible through healthcare.gov, hCentive also provided the technology for the small-business and individual exchanges for Colorado, New York and Kentucky.
The company's proposal includes 30,000 hours of software development time to adapt the software for Arkansas and make modifications.
The marketplace board "absolutely will be able to enhance it and make modifications as they see fit," McCann said.
Created by the Legislature in 2013, the marketplace is working to build insurance exchanges to replace the ones set up for the state by the federal government under the 2010 Patient Protection and Affordable Care Act. Supporters of Arkansas-based exchanges say they could be tailored to better fit the state's needs.
The U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services has awarded the marketplace $99.9 million to establish the exchanges and operate each one for a year. After the initial year, the exchanges would be supported by user fees.
Enrollment in Arkansas' planned small-business exchange, which would be part of the federal Small Business Health Options Program, is scheduled to start in October for coverage that would start in 2016.
For individual consumers, enrollment would begin in 2016 for coverage that would start in 2017.
Board member Jerry Jones of Cabot, who voted against awarding the contract to hCentive, said it didn't appear the fees generated by the small-business exchange would be able to support the exchange's operations.
As of mid-January, 156 Arkansans were covered by plans offered through the state's federally operated small-business exchange, a spokesman for Arkansas Blue Cross and Blue Shield said.
Cheryl Smith, the marketplace's executive director, said fees generated by the state's individual exchange could be used to support both the individual and small-business exchanges.
If both exchanges prove unsustainable, the state could go back to using federally operated exchanges, she said.
Castleberry, who also voted against awarding the contract, said he was concerned the board was left with only one candidate after Get Insured dropped out and hCentive has never before been the main company in charge of establishing a state-based exchange.
"I've seen so many implementations go really bad and fail miserably, and having not had the experience to be a primary just gives me a level of concern," Castleberry said.
HCentive chief executive Sanjay Singh said at the board's Jan. 23 meeting the company has fulfilled all the duties of a primary vendor on exchange projects even though it didn't have that title. The company has been the primary vendor on projects for private insurance companies, he said.
According to the company, all the exchanges for which it supplied the technology launched on time, with no major malfunction.
NW News on 02/12/2015