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This report covers the responses House Appropriations received for their RFI on Charge #1, relating to implementation of procurement and contracting reforms at state agencies. The RFI for this charge can be found here, and the full list of responses can be found here.

 

The HillCo report below is a summary of information intended to give you an overview and highlight of the various topics included in the responses. This report does not cover the entirety of each response, but aims to provide an overview of the testimony submitted.

 

Glenn Hegar, Comptroller of Public Accounts (pages 2-3)

  • Overviews CPA’s role in statewide procurement, including participation in the Contract Advisory Team and Quality Assurance Team
  • Comptroller has adopted the following rules in response to SB 65:
  • Have adopted rules to allow a procurement director to delegate the responsibility to certify that contract files are complete and assure appropriate assessment of vendors
  • Developed guidelines for monitoring agencies identified by SAO for solicitation development, contract negotiation and award, and contract management and termination
  • Updated Vendor Performance Tracking System; to mirror SB 65 vendor reporting requirements
  • Updated guidance and training materials to help with agency implementation
  • SB 65 recognized that different agencies face different levels of risk, allocating oversight to higher-risk agencies
  • Feedback from vendors indicates doing business with the state is “expensive and cumbersome;” concerns with complex/outdated solicitations discouraging businesses with the state
    • Legislature should consider simplifying thresholds based on uniformity and risk
  • Supports continued effort to reduce administrative burden on agencies and vendors

 

Texas Department of Family and Protective Services (pages 4-22)

  • Overviews appropriations provided by SB 781, relating to the regulation of child-care facilities
  • Addition of a specialized monitoring team has increased the number of contracts for specialized monitoring from 20% to 50%
  • Highlights the agency’s capability to monitor residential child-care services through SB 11, relating to policies for school safety and mental health promotion in public schools
  • Has transitioned from an annual qualitative assessment to continuous analysis; focusing resources on early identification triggers

 

Texas Health and Human Services (23-33)

  • Procurement reform strategy has been focused on: enhancing accountability and enhancing planning for procurement and contracting functions
  • Have enhanced accountability, oversight, and compliance by:
    • Implementing procurement risk assessment tool, establishing policies/checklists to clarify roles/responsibilities, and establishing a Compliance and Quality Control Division
  • Have established clear and effective policies and procedures by updating guidance to clarify compliance requirements, conducted a review and responsibility matrix for the procurement process
  • Have strengthened the procurement and contracting workforce by reducing vacancy rates, establishing specialized teams, and developing a long-term training strategy
  • Have enhanced strategic and long-term planning by:
    • Revising operating model/three-year plan, updating guidance, and establishing a committee to oversee the implementation of procurement and contracting strengthening projects
  • Have improved internal/external communication and transparency by:
    • Publishing policy/procedure, redesigning websites, updated solicitation templates, and implementing CAPPS enhancements to increase visibility of procurement status
  • Planning future reforms for the re-procurement of managed care products, solicitation, and evaluation process, and strengthening contract management effectiveness
  • In the next 30 days, aim to publish standard operating procedures for IT procurements, developing standard response/tracking templates, and publish an HUB toolkit
  • In the next 60 days, aim to develop CQC risk-based methodology, launch the development of a three to five-year Procurement Road Map, and require use of CAPPS financial evaluation tool
  • In the next 90 days, aim to complete PCS training plan, determine CQC oversight role and roles for shared procurement activities
    • And repeal Title 1, Chapter 391 of the TAC and propose new rules through agency rulemaking to ensure clarity/compliance
  • Highlights a full timeline of procurement and contracts reform

 

Texas Department of Transportation (page 34-37)

  • SAO assigned contract monitoring ratings to each of the 25 largest state agencies
  • Statute requires a ratings report to be submitted to CPA and the DIR by September 1
  • TxDOT was assessed a rating of “no additional monitoring warranted”

 

Texas Association of Health Plans (pages 38-42)

  • Recommends HHSC implements the recommendations provided in the Medicaid Managed Care Procurements Assessment conducted by Mercer
  • HHSC should use the multi-consulting pool to contact with experts to implement the recommendations and timely develop the STAR/CHIP and STAR+PLUS RFPs
  • Highlights recommendations from the Mercer assessment that would have the largest impact on procurement, including:
    • Recommends HHSC begin any procurement or re-procurement with a defined vision and leadership involvement; HHS leadership should be involved throughout the process
    • Should dedicate “highly skilled” subject matter experts for the procurement process; those who have a background in managed care should be assigned to participate
  • Texas should look at best practices for procurement in general rather than looking for a successful procurement model from another state; best practices include:
  • Should ensure transparency and develop/adhere to a published timeline
  • Should continue to release a draft RFP and allow for a 45-60-day comment period; particularly taking MCO recommendations in consideration
  • Should clearly state the submission requirements and eliminate any superfluous information
  • Should maintain transparency to who the state will evaluate and score the RFP
  • Should establish a project sponsor and governance structure
  • Should not focus RFP requirements on information relative to claim processing and demonstrating network adequacy
    • Compliance with claims processing and network access should be validated during readiness review
    • RFP could focus only on cost, quality, and access; Arizona managed care model is scenario-based
  • Should compete based on outcomes to be determined by HHSC and the legislature; should avoid “overfocusing” on cost
    • Florida uses Invitation to Negotiate process to score plans based on traditional criteria and compete largely based on quality
  • HHSC should include scored oral presentations with specific questions and improve process for outlier scores

 

Texas Association of Community Health Plans (pages 43-55)

  • The following recommendations were drafted after study of the December 2019 Mercer report
  • Marketplace and legislative anxiety have been driven by a lack of confidence in HHSC’s ability to manage and decide regarding the awards; large financial commitment and risk
  • Need fundamental revisions to the award decision process
  • Need to assure HHSC Medicaid resources are aligned with procurement risk level and that HHSC balances its procurement regulatory and compliance roles
  • Has been a bid cancellation trend; starting with Hidalgo Service Area CHIP bid and most recently with STAR+PLUS bid
    • Recommend a close examination of bud cancellations to develop lessons learned
    • Recommend obtaining input on the examination by a broader group of staff including HHSC leadership
  • HHSC uses similar RFPs procurement with minimal variation in goals or structure
    • Recommend establishing a strategic vision for the MMC program
  • Should overhaul RFP to focus on elements essential to quality such as reducing duplicative requirements, allow respondents to differentiate, require proof rather than attestations
  • RFP questions should not ask bidders to demonstrate understanding of SOW or how SOW requirements will be implemented
  • RFP questions should focus on eliciting how a bidder will: meet new requirements, create a solution beyond requirements, and address specific HHSC priorities
  • MCO questions should ask for information that is public record and evaluated in an audit style
  • Should include pages and complexity of questions should be limited
  • Evaluation criteria/tool should be released publicly as part of the RFP
  • Recommend stating best value criteria in the RFP; scoring the RDP cannot be the only component in ranking responses and awarding contracts
  • Should assign internal resources within Medicaid/CHIP services and engage an external vendor to manage RFP rewrite and evaluation process
    • HHSC should reorganize functions so Medicaid/CHIP staff lead managed care procurements and procurement staff serve a supportive role
    • Should eliminate outlier evaluation scores through a consensus process
  • Recommend procuring by service area; respondents must show commitment by Service Area
  • Recommends consolidation of Harris/Jefferson and Nueces/Hidalgo Service Areas
  • Overview a suggested timeline for making changes to the procurement process and RFP in which re-implementation would begin September-November 2021
  • Provides a summary of HHSC Rider report 61 that assesses CMMM maturity level; includes activities HHSC should continue and opportunities they should consider

 

United Healthcare Community Plan (pages 56-60)

  • The following recommendations were drafted after study of the December 2019 Mercer report
  • Recommends metrics and scoring criteria are clearly outlined in the RFP
  • Should provide instructions to vendors on the type and quality of proposals the state expects
  • Supports Mercer recommendations that address outlier scoring on the front end and addressing final scores
  • Recommends not scoring evaluation questions regarding past state performances on a binary scale; agree with Mercer to look at past performance in context of former compliance issues
    • Past positive performance should help in determining overall best value factors
    • Each MCO should be evaluated on the totality of its performance and merits
  • Should remove damages and fines from scoring criteria; should allow evaluators to take actions into account in assessing overall past performance
    • Past administrative fines or damages should not be evaluated by a binary score
  • MCOs can manipulate administrative processes; should develop a process to collect and consider feedback from stakeholders regarding their experiences with RFP respondents
  • RFPs and evaluation and scoring criteria should clarify that, for the mandatory contracting status to apply to a Hospital-Based Plan, must first demonstrate that it meets minimum requirements
  • State should study enrollee referral and utilization patters, caseload and the optimal number of MCOs for each service area to determine if any areas should be realigned and/or combined
    • Current 13 service areas could be realigned to seven relatively easily and with minimal disruption
  • Should utilize a transparent process that informs the procurement’s timing and expectations on the front end and provide flexibility to allow for follow-up
  • Do not recommend using a competitive cost proposal to evaluate a health plan to determine procurement outcomes