Protest Regarding RFP 41900_DCH0000136 _Pharm.pdf

Phone: 404-656-5514 200 Piedmont Avenue SE Suite 1804 West Tower Atlanta, Georgia 30334-9010 Fax: 404-656-6279 www.doas.ga.gov

Brian P. Kemp Governor

Rebecca N. Sullivan Commissioner

April 30, 2024

VIA E-MAIL

Mr. Robert Coppola, Senior Director, MCO and Public Sector Sales Team MedImpact 10181 Scripps Gateway Ct San Diego, CA 92131 robert.coppola@medimpact.com

Protest # 2024-PRO-00036 RE: Protest Regarding RFP 41900-DCH0000136 “Pharmacy Benefit Services”

Dear Mr. Coppola:

This letter is in response to MedImpact’s protest of the above referenced bid. For the reasons in this letter, the protest is denied.

On January 31, 2024, the Georgia Department of Community Health (“DCH”) issued RFP 41900-DCH0000136 entitled “Pharmacy Benefit Services” (the “RFP”) as the Lead State for a NASPO Valuepoint cooperative procurement. Georgia partnered with Alaska, Montana, and Vermont in the drafting of the procurement, and those states, as well as any other state may elect to become a Participating Entity and make purchases pursuant to any contract awarded pursuant to the procurement.1 The objective of the RFP is to identify qualified Suppliers whose proposals offer Services and Solutions (where applicable) which demonstrate that the Supplier(s) is(are) able to provide pharmacy benefit administrator services to Fee-for-Service (FFS) Medicaid pharmacy program members (including pediatric members) and full-benefit dual eligible members; provide clinical management services for a Participating Entity’s FFS Medicaid pharmacy program; support audits in accordance with applicable state laws to identify and respond to potential fraud, waste, and abuse within the system; and administer the invoicing, collection, financial analysis, and negotiations of pharmacy drug rebates for eligible Federal Rebates and Supplemental Rebates.2

Medimpact submitted a protest on April 19, 2024, challenging Mandatory Requirement #4 provided in Attachment P of the solicitation, which states that if a Supplier is submitting a proposal for Pharmacy Drug Rebate Services, the Supplier must have served as the Prime Contractor for at least three years within the past five years in Medicaid Fee-for-Service (FFS) Pharmacy rebate and Medicaid Supplemental Rebate invoicing, processing, and management. Medimpact contends that the requirement suffers from ambiguity, unreasonableness, and stifles competition.

1. Ambiguity. Medimpact asserts that Mandatory Requirement #4 lacks clarity regarding the timeframe for the Supplier's experience—whether it refers to three years within the last five years from the publishing date, go-live date, contract effective date, or proposal submission time.

1 To the extent permitted pursuant to such state’s procurement laws and policies.

2 Section 1.1 of Attachment A of the Request for Proposals.

DocuSign Envelope ID: D2089031-6DB0-4003-9E92-26C2974ECE7D mailto:robert.coppola@medimpact.com

Protest Regarding RFP 41900-DCH0000136 “Pharmacy Benefit Services”

Phone: 404-656-5514 200 Piedmont Avenue SE Suite 1804 West Tower Atlanta, Georgia 30334-9010 Fax: 404-656-6279

Mandatory Requirement #4 provided in Attachment P to the solicitation, which reads as follows:

If the Supplier has selected Pharmacy Drug Rebate Services in Attachment O - Scopes of Work Submission Checklist, the Supplier must have served as the Prime Contractor a minimum of three (3) years within the last five (5) years in Medicaid Fee-for-Service (FFS) Pharmacy rebate and Medicaid Supplemental Rebate invoicing, processing and management.

The Supplier must acknowledge agreement by indicating "YES". If the Supplier has not selected Pharmacy Drug Rebate Services, the Supplier shall respond "YES".

The Supplier must acknowledge agreement by indicating "YES". If the Supplier has not selected Pharmacy Drug Rebate Services, the Supplier shall respond "YES".

DCH has indicated its intent to revise the requirement to indicate the following, which provides clarification sought by Medimpact. Accordingly, Medimpact’s protest regarding this issue is moot:

If the Supplier has selected Pharmacy Drug Rebate Services in Attachment O - Scopes of Work Submission Checklist, the Supplier must have served as the Prime Contractor a minimum of three (3) years within the last five (5) years (from date of close of the solicitation) in Medicaid Fee-for-Service (FFS) Pharmacy rebate and Medicaid Supplemental Rebate invoicing, processing and management.

2. Reasonableness. Medimpact asserts that Mandatory Requirement #4 should be modified to require a single year of experience (rather than three years) because the requirement as currently written appears to limit the number of qualified bidders, thereby reducing competition and potentially impacting the quality and diversity of proposals received.

DCH has provided the following justification for its three-year experience requirement:

1.Depth of Knowledge and Skill: Three years of experience typically implies a deeper level of knowledge, skill, and expertise compared to just one year. Suppliers who have been active in rebate services for three years are likely to have encountered a wider range of challenges when it comes to rebate disputes and delinquencies, ensuring 340B duplicate discounts do not occur etc.… It also minimizes the likelihood of subpar performance or deliverables.

2.Proven Track Record: A longer period of experience demonstrates a more established track record of successful project delivery. Suppliers with three years of experience have had more time to complete projects, accumulate client testimonials, and demonstrate their ability to consistently meet or exceed expectations. This track record can provide DCH with greater confidence in the bidder's ability to deliver results.

3.Risk Reduction: By requiring three years of experience, DCH can reduce the risk of selecting vendors who may lack sufficient experience to handle the complexities of the Medicaid Drug Rebate program effectively. Projects often involve various challenges and uncertainties, and vendors with more experience are generally better equipped to navigate these challenges, mitigate risks, and adapt to changing circumstances. The consequence of failure is significant which requires performance assessment reports on a quarterly basis.

4. Client Satisfaction: Suppliers who have been in the industry for three years are more likely to have established relationships with clients and gained valuable insights into client preferences and expectations. This can lead to higher levels of client satisfaction, as experienced vendors are better able to anticipate and address client needs, resulting in smoother project execution and enhanced client relationships.

DocuSign Envelope ID: D2089031-6DB0-4003-9E92-26C2974ECE7D

Protest Regarding RFP 41900-DCH0000136 “Pharmacy Benefit Services”

Phone: 404-656-5514 200 Piedmont Avenue SE Suite 1804 West Tower Atlanta, Georgia 30334-9010 Fax: 404-656-6279

A State entity maintains the discretion to determine its needs and the best method to accommodate them. The determination of a procuring entity’s needs, including the selection of evaluation criteria, is primarily within the agency’s discretion and I will not object to the use of particular evaluation criteria so long as they reasonably relate to the agency’s needs in choosing a contractor that will best serve the State’s interests. A protester’s disagreement with the agency’s judgment concerning the agency’s needs and how to accommodate them, without more, does not establish the agency’s judgment is unreasonable.3

Although competition may be limited by requiring three years of previous experience, that does not necessarily mean that the requirement is unduly restrictive (unduly meaning more than is reasonable).4 DCH’s justification indicates that the purpose of the three-year experience requirement was to limit the risk of unsuccessful performance with respect to these contracts, which is a rational explanation that can withstand logical scrutiny.

Medimpact also challenges the reasonableness of Mandatory Question #4, asserting that it is not reasonable to assume that a bidder that meets the experience requirement in Mandatory Requirement #4 will continue to meet the requirement throughout the ten-year duration of the contract. A requirement that a supplier maintain a certain amount of experience within a certain period of time prior to contract award is not novel. The purpose of such a requirement is typically related to ensuring that the supplier maintains experience relevant to the current business conditions. Recognizing that it is possible that a supplier that receives an award under this procurement may not immediately be selected as a service provider, potentially creating a circumstance where the supplier no longer meets the experience parameters (three years of experience within the last five years), it is my understanding that the initial term of the contract will be one year and that there will be up to nine one-year renewals. If a supplier does not maintain sufficient relevant experience, the State may elect not to renew the contract in whole or in part.

Medimpact also asserts that the experience requirement is unreasonable because a supplier may obtain sufficient experience during the ten-year term of the contract and would not be eligible to participate in the NASPO procurement. The fact that the marketplace may change is not necessarily indicative of an overly restrictive requirement and would not be adequate justification for me to direct DCH to revise its experience requirement.5

Accordingly, your protest is denied.

Sincerely, Jim Barnaby Deputy Commissioner cc: Tracey Woods, PBA.Procurement@dch.ga.gov

3 Georgia Procurement Manual Section 6.5 Step 4- Supplier Participates in Protest Process 4 The Department of Community Health has indicated that their market research indicates that there are at least four suppliers that meet the experience requirement.

5 That being said, if there is a need to expand the contract due to changes in the marketplace, a subsequent solicitation may be considered.

DocuSign Envelope ID: D2089031-6DB0-4003-9E92-26C2974ECE7D mailto:PBA.Procurement@dch.ga.gov