A contentious switch in contractors approved by the California Department of Health’s Office of AIDS (CDPH/OA) in 2016 has had several negative consequences, including two lawsuits from the previous contractor, lost applications, dropped coverage, a broken application system, and wrongly denied coverage for California ADAP clients. In other words, it is a complete mess in California.
The AIDS Drug Assistance Program (ADAP), Part B of the Ryan White CARE Act (RWCA) is designed to be the “payer of last resort” for patients living with HIV/AIDS whose incomes fall near enough to the Federal Poverty Level (FPL) to make affording the cost of care prohibitive, if not entirely unaffordable. As such, ADAP clients come to rely upon the uninterrupted delivery of those services in order to effectively treat their HIV infection, address co-morbidities, and achieve and maintain the viral suppression that makes transmission of the virus highly unlikely. By those measures the state of California has abjectly failed the charges whose health the ADAP program was intended to address.
The process that resulted in California’s dereliction of duty began in October 2015, when the initial Request for Proposal Process (RFP) was sent out. The initial RFP followed state guidelines using a 1,000-point allocation system to award the bid to contractors. Consistent with government regulations, the actual monetary bid for the contract (“Cost Calculation”) was weighted at 75% (750 points) and “Technical Calculation” requirements were weighted at 25% (250 points), with a contract term of three years with two one-year extensions for a total of a five-year contract (Hews, 2016).
Using this state-mandated RFP, the then-existing contractor, Ramsell Corp (Oakland, CA) submitted a bid of $900,000 per year, with no increases over the five-year period, for a total of $4.5 million for the Enrollment Benefits Management (EMB) part of the program – the process where clients apply for coverage and maintain enrollment in the program. A competing bid was submitted by Michigan-based A.J. Boggs & Co., Inc.: $4,699,585 for the first year, $2,212,563 for the second, $2,208,767 for the third, $2,211,532 for the fourth, and $2,235,012 for the fifth and final year, totaling $13,567,459 – a bid roughly $9.067 million higher than Ramsell’s (Hews).
Under the terms of the RFP, point allocation to the lowest bidder – Ramsell – would have been 750 points, while Boggs would have received 296 points, using the state-mandated formula. That was the case, until CDPH/AO Procurement Officer, Jeffrey Mapes, changed the terms of the RFP on December 03, 2015, reversing the calculations so that the Technical Calculation became weighted 75% and the Cost Calculation, weighted by 25% (Hews). Mapes’ actions, along with simple math miscalculations, led the Boggs being awarded the new contract on March 04, 2016. Ramsell, unaware of these changes and miscalculations, submitted a Freedom of Information Act (FOIA) request for all documents related to the Boggs bid – a request whose fulfilment was delayed and incomplete.
Realizing the errors in the process, Ramsell submitted a protest on April 06, 2016, from which the following excerpt comes:
We are concerned that the amount of time that has been allotted for system beta testing and enrollment worker training is not adequate. The Office of AIDS has notified us that the new system is still being developed, beta testing has not yet begun, and enrollment worker training will not begin until just weeks before the July 1st transition. Further, the system is transitioning from one to three contractors which will require additional coordination to effectively serve clients. In order to ensure a seamless transition, we believe additional time is necessary to adequately beta test the new system, train enrollment workers, and ensure time for feedback on what works properly and what needs improvement (Otiko, 2016).
In June 2016, Ramsell Corp filed two separate suits related to the EBM and the Pharmacy Benefits Management (PBM) contract awarded to Magellan Rx Management, LLC. The EBM suit alleges that:
…after Ramsell complained about major defects in the unfair procurement, CDPH cancelled the award to Boggs, and then gave them an illegal, sole-sourced contract only days later in violation of the requirements of the State Contracting Manual. The lawsuit also notes that the Boggs’ bid was about three times higher ($9 million more) than the Ramsell bid (Allen & Barajas, 2016).
The PBM suit alleges that:
…in procuring the new contracts, CDPH: (1) failed to follow its own rules as set forth in the Request for Proposals (RFP); and (2) conducted the procurement in a biased manner that was slanted in favor of the out-of-state companies (Allen & Barajas).
Despite these lawsuits being filed, CDPH/OA continued the transition to the three new vendors, which also included Pool Administrators Inc. (which covered the Health Insurance Premium Payments (OA-HIPP) and Medicare Part D premium payment programs), effective July 01, 2016 (Grimes, 2016). Since that transition occurred, ADAP clients, healthcare providers, clinics, pharmacies, and AIDS Service Organizations (ASOs) have experienced numerous problems accessing coverage.
Clients have been turned away at pharmacies, forced to postpone medical procedures, and some have been dropped from the program, altogether (Gorman, 2017). Additional complaints from patients and caseworkers allege that reimbursement claims have been repeatedly rejected (Allday, 2017) and patients have been dropped from the health insurance because ADAP failed to send premium payments to the correct address (Gorman). Dr. Karen Smith, director of California’s Public Health Department, stated in a letter to state Senator Scott Wiener (D-San Francisco) that:
Shortly after [the department switched to new contractors in July 2016], …CDPH received a letter from constituents expressing concerns that there were issues for some clients receiving medications. …As you note, the ADAP portal was unexpectedly unavailable for ADAP enrollment worker and client use as of November 29, 2016, due to information security vulnerabilities in the system. …To ensure uninterrupted client access to medications, we have extended client eligibility to their next reenrollment or recertification date occurring after June 30, 2017 (Hemmelgarn, 2017).
|California State Senator Senator Scott Wiener; Gloss Magazine|
Dr. Smith noted that her agency identified two separate breaches of information, and that impacted clients were notified. Those breaches, however, led to the online portal, where patients could register, re-enroll, and re-certify, being taken offline indefinitely on November 29, 2016. As of January 23, 2017 – just seven days short of the January 30 extension deadline – that online portal has not been replaced. This failure on the part of Boggs forced patients and caseworkers to register for ADAP by fax – a process that took weeks, due to a shortage of both fax machines and customer service workers to handle the load (Allday).
In response to patients being unable to access pharmacy services due to complications with PBM contractor, Magellan, the staff at Magellan were authorized by the state
…to provide real-time, 24 hours a day, seven days a week authorizations to pharmacies for a 30-day supply of medications for ADAP clients with active eligibility who experience access issues at the pharmacy (Hemmelgarn).
While this step is a nice quarter-way measure to ensure that active patients – those who have not been erroneously dropped or unable to enroll or certify – can gain access to their lifesaving HIV medications, it in no way serves as a long-term solution to address the myriad disasters that this ill-advised contract switch has created. For those patients, providers, and caseworkers who have been unable to successfully register clients, process claims, pay premiums, or be successfully reimbursed, this disastrous transition is entirely unacceptable.
Further frustrating already harried caseworkers and providers is that this transition from one California-based, minority-owned contractor (Ramsell) to three out-of-state contractors, one of which is inexperienced in the arena, could and should have been entirely avoided, had the CDPH/OA complied with the state-mandated RFP process and properly calculated the points, even within the new calculation. That Ramsell Corp, a company that had successfully provided services to California’s ADAP program for nearly twenty years, was summarily dismissed and their bids rejected in what appears to be retaliation for filing a formal protest in response to the procurement process is foolish behavior on the part of the CDPH/OA.
CDPH/OA’s failure to follow even the most basic statutes indicates the need for a new Procurement Officer, as Jeffrey Mapes’ unexplained and potentially illegal (Hews) actions indicates that he is unfit for the position. California’s patients deserve better, and until there is a permanent fix in place, it is incumbent upon all California residents, advocates, caseworkers, and providers to keep the pressure on the CDPH/OA.
According to sources, the Health Resources & Services Administration (HRSA) at the U.S. Department of Health & Human Services is aware of the situation and monitoring it.
- Allday, E. (2017, January 23). HIV patients call drug program fractured after shift in operators. San Francisco, CA: San Francisco Chronicle. Retrieved from: http://www.sfchronicle.com/health/article/HIV-patients-call-drug-program-fractured-after-10874920.php
- Allen, S. & Barajas, H. (2016, June 16). Lawsuits Charge California Department of Public Health With Placing AIDS/HIV Patients at Risk. Oakland, CA: Ramsell Corp: PR Web. Retrieved from: http://www.prweb.com/releases/2016/06/prweb13491971.htm
- Gorman, A. (2017, January 23). Crucial California HIV program in disarray after contract switch. Sacramento, CA: The Sacramento Bee: California Healthline. Retrieved from: http://www.sacbee.com/news/local/health-and-medicine/article127340804.html
- Grimes, K. (2016, June 29). Fishy Circumstances as CA Department of Public Health Replaces 20-Year Vendor. CA: Flashreport. Retrieved from: http://www.flashreport.org/blog/2016/06/29/fishy-circumstances-as-ca-department-of-public-health-replaces-20-year-vendor/
- Hemmelgarn, S. (2017, January 18). AIDS drug assistance program hits a snag. Los Angeles, CA: The Pride, The Los Angeles LGBT Newspaper. Retrieved from: https://thepridela.com/2017/01/aids-drug-assistance-program-hits-snag/
- Hews, B. (2016, June 30). Questionable State Bid Process Leaves California HIV/AIDS Community In Jeopardy. Cerritos, CA: Hews Media Group. Retrieved from: http://www.loscerritosnews.net/2016/06/30/questionable-state-bid-process-leaves-california-hivaids-community-in-jeopardy/
- Otiko, M. (2016, June 28). State Agency Sued Over Questionable Bidding Process. Sacramento, CA: The Sacramento Observer: California Black Media. Retrieved from: http://sacobserver.com/2016/06/ramsell-corp-files-lawsuits-against-state-agency-over-questionable-bidding-process/
Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.