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County rejects 2 low bids for health care

Commissioners say the low bid for indigent care sounded too good to be true.

By BILL VARIAN, Times Staff Writer

© St. Petersburg Times, published January 11, 2002

Commissioners say the low bid for indigent care sounded too good to be true.

TAMPA -- Usually local governments ask businesses to bid for contract work in the belief that competition lands the best price and service guarantees for taxpayers.

But Hillsborough commissioners on Wednesday rejected the lowest of two bidders seeking to manage the county's troubled indigent health care plan. Saying the low bid sounded too good to be true, they instead chose to hire a company they have used before for the same work, even though that company will charge nearly twice as much as its competitor.

"Something is not smelling right," said Dr. Kiran Patel, a principal for low bidder Comprehensive Health Management of Tampa.

Commissioners said the only thing that was less than savory were their options. They had already raised concerns about the financial health of both companies. In the end, they said they chose the company that made them feel most confident it could do the job without problems.

"I don't know if we're making the right decision," said Commissioner Ronda Storms. "With all the information that we have, I think we're making the best decision we can at this time."

On a 6-1 vote, commissioners hired Administrative Services Inc. of Miami, which held the same contract for four years ending in September 2000. Commissioner Jan Platt cast the dissenting vote, arguing that the county should toss both offers and try again.

The winning company will process medical reimbursement claims from health care providers who serve the county's health plan, an HMO of sorts for Hillsborough's poor. It will replace Ascendia Health Care of Baltimore, a company the county is firing for bungling as many as 400,000 claims and being slow to reimburse health care providers.

Ascendia won the contract about a year ago, replacing Administrative Services, Wednesday's winning bidder, by offering to do it cheaper. Within a few months, problems became evident and botched claims started piling up.

So the county sought a new health plan administrator, winnowing the offers to two. But county financial analysts said neither company appeared healthy. Financial records showed each seemed to be operating month to month, with little cash in the bank as a safety net.

Nevertheless, commissioners felt some urgency to replace Ascendia. So they voted last month to negotiate with both.

Administrative Services will charge $8.50 per month for each of the roughly 19,000 customers of the health plan, which company officials said was the best they could do. Comprehensive Health Management offered to do the same job -- and fix the botched Ascendia claims -for $4.50 per customer. That's an estimated $670,000 cheaper.

Here's why commissioners said the lesser figure sounded too good: Ascendia, the company they are firing, charged the same amount. And both Comprehensive and Ascendia hired the same salesman to pitch it to them.

Patel said commissioners were unfairly comparing two companies. He said his company successfully handles 15,000 claims a day, and as a result enjoys economies of scale.

"Once bitten, twice shy," Storms said.

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