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Transcript:

Natascha:  Hello, and welcome to another episode of Avalere Health Essential Voice in our Start Your Day with Avalere podcast series. My name is Natascha Dixon Edelin and I am an Associate Principal in Avalere’s Health Plan and Providers group and the Center for Healthcare Transformation. I am joined today by two of my colleagues, Michael Lutz and Margaret Scott.

Michael Lutz is a Senior Consultant here at Avalere who has held operational roles at several health plans, including the successful procurement and implementation efforts for a Medicaid startup plan in Texas. He also led successful Medicaid procurement efforts in eight additional states. Throughout his consulting career, Michael has led Medicaid projects in 14 states on behalf of both plans and state agencies.

I’m also joined by Margaret Scott, who is an Associate Principal at Avalere. She previously led the pharmacy program for the Ohio Department of Medicaid for almost a decade, where she oversaw both policy and operations. She also spent time as a Clinical Advisor at CVS Caremark where she advised Medicaid Managed Care Organization (MCO) clients.

Welcome, Michael and Margaret. It’s great to have you on the podcast.

In today’s episode, we’ll focus on the key steps for an effective Medicaid procurement, or re-procurement, submission. We’ll look at how plans bid from three key phases in the process. First, we’ll review the period prior to the request for proposal’s (RFP) release. We’ll discuss how a health plan should prepare for the upcoming RFP. The second phase occurs once an RFP has been released. We’ll discuss the essential components of effective bid development. And finally, what happens after an RFP is submitted? We’ll review the activities that a health plan will need to participate in post-submission.

As we walk through each of the three phases, Margaret is going to take on the role of the state and provide us with an understanding of what the state is looking for in each phase. Michael is going to look at procurement and re-procurement agreements from the perspective of a health plan.

Margaret, let’s start with phase one, the period prior to the RFP being released. How is the state expecting a health plan to engage in this phase of the process?

Margaret: The state has been doing a lot of work before the RFP is even released. They’re evaluating its Managed Care Program, reviewing their goals and wish list, and thinking about the changes they want to make to MCO contracts. Health plans can get some clues about these deliberations through news reports, legislative and regulatory activity, and information posted to the state’s website.

Health plans should participate in state planning activities, including attending stakeholder meetings, particularly if your plan would be new to the state. Learn as much as you can about the state’s objectives and the concerns raised by other stakeholders, and get to know the key players. Respond to any white papers or requests for information, and make sure the state knows about your plan and how you think critically about the issues that they’ve raised.

Natascha: Now, Michael, can you provide us with the health plan’s perspective? What are the key steps a health plan should focus on prior to the RFP being released?

Michael: Thank you, Natascha. I would start by echoing what Margaret just said about participating in the activities the state has undertaken in designing the program.

The health plan should review the program design and the decision-making documents that the state has released. Using these materials, plans can identify gaps they may have from a design or capabilities perspective. For example, one health plan I worked with had to create their program from scratch to respond to a long-term services and supports (LTSS) bid. The time and intensity of this effort required them to start working as soon as they understood the program design, before the program was finalized by the state. The amount of effort required for a plan to prepare their response is really going to depend on the types of information that the state is looking for, the type of program they’re looking to implement, and the current operational capabilities of the plan.

Secondly, this is the opportunity for the plan to engage the community to assess its needs, and then design program offerings to address those needs. The plan can have conversations with external entities and present to them what the state is expecting to procure, enabling them to find out what they should be bringing to the market that might set them apart from competitors.

Third, this is the time to optimize your operations. Take a look at your provider network, your organizational structure, your IT capabilities, and identify what areas might need to be beefed up or where you might need to bring in a vendor to help you facilitate the services that are expected in the procurement.

As you prepare for the actual writing of your RFP response, you’ll want to define your RFP team and establish your internal RFP processes such as making assignments around content development, review, approval, and sign-off. The more you can get these administrative activities established before the RFP drops, the less time you’ll have to spend during the RFP writing phase to finalize your internal operational and administrative process. It sounds like a small detail, but you would be surprised at how much time that takes up, valuable time you don’t have when you’re trying to write your response.

Natascha: Absolutely. Before we move to phase two, how does the phase one process differ when it’s a re-procurement versus a new procurement? Margaret, I’ll start with you. As the state, would you expect to see something different during a re-procurement?

Margaret: Yeah, that’s a great point. There are a few ways to think about this. A new procurement could be a state’s first entrance into managed care, though that is pretty rare at this point with over 40 states using full risk managed care. Oklahoma is entering the managed care market this fall. The Oklahoma RFP hasn’t been released yet, but we anticipate policy decisions set out in the RFP explaining how the state expects its MCO partners to shape the program and enhance the state’s capabilities.

A new procurement could also be a new population with a state that’s already experienced in managed care, such as adding LTSS.

A re-procurement is an opportunity for new plans to enter the market and for incumbent MCOs to retain their position. In a re-procurement, the MCO, whether new or incumbent, will need to review the RFP to see what has changed from the current situation in terms of program requirements and the MCO’s responsibility versus the state’s. For example, Ohio recently released its request for applications and is planning many changes. Some of these are huge. They’re carving pharmacy and behavioral health out to separate managed care entities. Other changes are small, such as the state issuing ID cards rather than MCOs.

Natascha: Okay, great. Michael, I will throw this question your way as well. How would health plans need to plan differently if this were a re-procurement?

Michael: Once again, I have to say Margaret is spot-on with her comments. Incumbent plans cannot assume they know what the state is looking to purchase in terms of program contractors. As states become more mature in managed care in that the Medicaid space continues to mature, states are getting much better at knowing what they want from their contractors. We’re seeing those enhanced expectations reflected in new procurement requirements.

In addition, from a plan perspective, if you’re an incumbent, there is a lot of pressure on you to describe the outcomes you’ve had for the state and consumers over the course of the previous contract. Plans need to make sure that they are reinforcing the efficacy of their programs with observed results and outcomes in every response. That’s not something a new plan coming into a program would necessarily have but is something that the state is looking for an incumbent to do. This places an additional burden on incumbent plans responding to the RFP.

Natascha: Let’s pivot to phase two and talk about what happens once the RFP is released. Margaret, what is the state expecting of health plans during this RFP process?

Margaret: States will typically hold a bidder’s conference, which provides health plans with an overview of the RFP, highlights key plan offerings and any changes to the program, and answers questions directly from plan participants. This is the only contact the state will have with the bidders once the RFP is released, so health plans should engage with the state and make the most of this opportunity.

Health plans also need to monitor the procurement website. States will often post changes or clarifications on the site and there is likely to be an opportunity to ask questions, so Q&As from every bidder will be posted. It’s important to read all the Q&As to make sure you fully understand the RFP. The state will often clarify things through this question and answer process.

The state may also provide a bidder’s library with additional materials about the existing or future managed care program that may include data, policies referenced in the RFP, and position statements. Read this information closely. The state will assume you know about everything they’ve provided.

Finally, and I can’t stress this enough, follow the directions. Determine whether you can include trade secrets, keep to page limits, follow the state’s formatting, and submit on time. I’ve seen proposals rejected because a bidder included trade secrets when the RFP explicitly said not to, because an email was a minute late, and because the UPS guy delivered the package to the wrong floor of the state office building. State procurement officials take their role seriously to ensure a level playing field.

Natascha: Alright, Michael, so now we’ve heard Margaret’s advice on what the state is going to provide and exactly how they’d like it submitted. How should a health plan approach the development of their RFP response?

Michael: This is where the real heavy work starts, or continues, I should say. At the beginning of this process, the organization and the business units that will develop the procurement response should collectively define the win themes for the RFP response. Those win themes should be woven into each section of the proposal. The more you remind the state of what sets you apart and what makes you such a wonderful plan, the better off your proposal is going to be and the more consistent it’s going to read, even if there are different authors throughout the process. The proposal leader should be included in the development of those win themes to make sure they’re uniform and included in each section of the procurement response.

Each business unit should begin drafting the portions of the RFP that speak directly to their component of the business. Many health plans will co-draft or outsource the development of the RFP to a vendor depending on their level of comfort with developing the response or depending on their availability of resources. The RFP writing process is very intense for a defined period, so oftentimes, an organization can’t devote that level of resources. That’s another reason why it’s important to have a structured process with your win themes clearly defined, so that as people are helping the business areas write the responses, everybody is sticking to the same theme with the same tone.

If you’re a health plan that’s responding to a re-procurement, as I mentioned, it is important for the plan to identify program results, including quality outcomes, scenarios where your plan has had a positive impact in the marketplace or for an individual, testimonials that help tell the story of what your plan has done to make a positive change in the community, and other materials to support the effectiveness of your programs.

In terms of process, it’s important to set internal deadlines for each section of the response and make those deadlines as early as possible. A well-defined, well-structured, and well-articulated RFP response goes through many rounds of revisions. As Margaret pointed out, states typically have page limits on the response sections. I can’t tell you how many times I’ve had an initial draft that was over the page limit, sometimes multiple times over the page limit. We once had a five-page limit, and the client gave us 15 pages of content that they insisted all needed to be in that response. Setting internal deadlines early in the process will take the pressure off as you start getting toward the end and you’re still scrambling to edit your sections.

One detail I cannot overemphasize is, do not overpromise. The information that you add in your response will become part of your contract with the state if you win, and you will be held to the performance and execution of those promises. It’s great to be innovative and to bring new approaches to the market, but be sure that you can demonstrate your ability to execute on them during the Readiness Review, and that you can consistently execute on them over the course of the contract. If you fail on those promises, the state will go back and cite your RFP response as part of the contract, and you will be penalized for not executing on your contracted promises.

Once your RFP is drafted, a final quality review and assessment should be conducted. The purpose of this review is to ensure that you’ve addressed all the RFP requirements and compiled a compelling set of offerings.

The states are very particular about the formatting of the document. You really need this final review and assessment to make sure that you are meeting the very specific requirements and parameters that are established in the RFP.

Finally, many states are moving to online portals for submission. I chuckled when Margaret was talking because I’ve been in that position where you’re hoping that the delivery guy got the package there on time. The advent of submission portals has taken that stress away, but it’s added other stresses. Instead of having to mail those multiple copies of printed binders, you’re uploading a file. Sometimes it’s a full file and other times you must copy and paste into the portal fields. Those portals are very glitchy, so you want to make sure that you are building your project plan in such a way that allows you to start submitting early. You don’t want to be submitting at the eleventh hour of the deadline and have the portal go down, or have the copy and paste feature not work, or have a file format not recognized. Always plan for these scenarios. Having time in your project plan to allow for multiple submissions is very important when you get down to the final stages of the RFP submission process.

Natascha: I have been there, when you are copying and pasting and it won’t copy and paste, and let me tell you, that’s a lot of pressure when you’re coming down to the eleventh hour.

As Michael noted, the RFP development process is a heavy lift. Yet even after the RFP is submitted, there’s still work to be done. So, Margaret, once all the RFPs are submitted, the state will review those submissions and select a set of finalists. Can you describe the scoring process and how the state goes about selecting the final group of vendors?

Margaret: Yeah, that’s right, Natascha. About the time everyone on the health plan side has breathed a sigh of relief, the work starts on the state side. Every state is different, so each procurement will be different. In most cases, though, the procurement office will take a first look at the proposals to make sure all the rules were followed. And I will say again, follow the rules, follow the rules. Proposals that don’t will be disqualified before they’re reviewed, and you don’t want all that work to go to waste.

Once the procurement office has done their review, the review team starts their work. The composition of the team can vary, but there will usually be subject matter experts who know the state’s Managed Care Program backwards and forwards, someone from IT to look at any of the technical requirements that you’ve had to answer, and at least one reviewer who actually knows less about the details so they will have a broad view of the program. The state wants diverse points of view on that review team.

Each member of the team will view the proposals alone and won’t talk to each other about them, so their scoring is theirs alone. Then the team will meet to discuss and come to a consensus score for each proposal. The scoring process is set out in advance and often included as part of the RFP. Proposals that don’t meet a minimum threshold can be eliminated at this stage.

The next step in reviewing the proposals or the bidders is an interview stage where the bidders still in contention are invited to give presentations and answer questions for the review team.

Natascha: Michael, I know you’ve attended some of these interviews, also referred to as Best and Final Conferences, with health plan clients. How would you advise health plans to prepare for these Best and Final Conference interviews?

Michael: I had to chuckle again when Margaret said, just when the health plans are catching their breath, though I was going to characterize it as, just when health plan staff are exhausted from scurrying to get the RFP edited and submitted, they find out that they’ve been selected to come to the Best and Final or the bid submission interview and a whole new level of stress begins.

First and foremost, know what is in your proposal response. I’ve seen plan staff that did not participate heavily in the writing of the response tasked with attending the state interview, and not being intimately familiar with the contents of the response. Sometimes the state will request specific staff to participate in the conference because they might have questions about a specific response. This often happens in, for example, the care management section, or in the description about quality. If these folks are now being asked by the state to appear at the conference, but they didn’t participate in the writing of the response, they’re not going to be able to articulate or explain the program to the degree that the state wants.

Second, be prepared to elaborate beyond the text to make the case for why your program or approach will best serve the state or consumers’ needs. You’ve met the page limits, but let’s be honest. You’ve got far more to say than what the page limits allow. This is your opportunity to go beyond that to provide additional detail to the state. Go into the interview knowing that this is your chance to talk about your program, and not just reiterate what you wrote in the RFP response.

Finally, I would say a real key is to remain flexible. If you’ve made it this far, then the state is interested in what you wrote, but they might be looking for adjustments to the program that you describe, or they may be looking for you to explain why you may have made adjustments to how they had envisioned the program operating. I’ve seen a lot of plans go into these meetings with the attitude of, we’ve designed our program, this is the program that works for us, we’ve articulated our program, and we’re just here to tell you about our program. That’s not what the state wants to hear if they are giving you the opportunity to modify your approach. Be flexible and tell the state that you’ll take a look at it. Articulate if there are any concerns, but if they’re small enough adjustments, be willing to take the state’s feedback. That could make the difference between a loss and a win at this late stage of the evaluation.

Natascha: Thanks, Michael. That was very helpful. I think it really showcases the need for thorough preparation at each step in the procurement process.

Michael and Margaret, I really want to thank you for joining today’s discussion and our podcast. Your insights on Medicaid procurements are invaluable to our listeners. Thank you all for tuning in today to Avalere Health Essential Voice. If you’re interested in contacting Margaret, Michael, or me, you can visit avalere.com/podcasts.