Center for Open Government: Finance Cabinet withholding documents clouds MCO consultant’s role

Less than two weeks after Andy Beshear’s inauguration, the Finance Cabinet cancelled the $8 billion Medicaid managed care contracts awarded in the final days of the Bevin Administration. The Cabinet re-issued a solicitation for new bids on January 10, 2020.

Cancelling the contracts is well within the Finance Cabinet’s authority. A decision accompanying the cancellation, however, is troubling to the Bluegrass Institute’s Center for Open Government.

After the contracts were cancelled, open records requests (ORRs) were submitted by a number of businesses and organizations to obtain the vendor bids and associated documents from the first solicitation. (Note: I submitted an ORR for the documents in December 2019 in a previous role).

The Finance Cabinet denied the ORRs, citing exemptions in the law for “preliminary” documents:

There are two exemptions in Kentucky’s Open Records statutes for preliminary documents.

KRS 61.878(i)Preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of final action of a public agency;

KRS 61.878(j)Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended;

Justifying the withholding of the bid proposals from the first solicitation by labeling them “preliminary” appears expedient. For whatever reason, the Finance Cabinet didn’t want to release the documents and applied an exemption that is usually reserved to provide government officials some privacy to conduct candid internal communications as part of the policy process.

The Bevin MCO solicitation closed. Vendors were selected based on their final proposals. Contracts were signed. Cancelling those contracts doesn’t make those proposals preliminary, even with the intent to re-bid.

Withholding the documents is even more troubling in light of Molina Healthcare hiring Emily Parento.

As co-chair of the Beshear-Colemant CHFS transition team, Parento was granted access to all the documents from the original RFP, including the proposals from the companies bidding against Molina. (Note: Parento signed a non-disclosure agreement to review the documents). The appearance of impropriety isn’t something to simply dismiss when the process awarded Molina a chance to secure a piece of $8 billion in state business.

Also, we know Parento’s engagement as a Molina team member was highlighted in their winning proposal submitted on 2/7/20.

What we don’t know – because the Finance Cabinet has denied the release of Molina’s first proposal – is whether Parento was part of their team from the beginning?

If Parento’s expertise created real value for Molina to position itself favorably to win the state’s business wouldn’t they have engaged her services for the first bid?

Or was she brought on – and highlighted in their proposal – more for her connections to a new administration than whatever value she will contribute to the delivery of Medicaid services to Kentuckians?

Taxpayers have witnessed so much of the latter in Frankfort that these questions must be asked.

Releasing the initial bid documents would provide some answers.

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Campaign Finance Note:

Kentucky Registry of Election Finance’s online records show Parento and her husband have been generous contributors to Gov. Andy Beshear through the years, contributing nearly $10,000 to his election efforts since 2014.

Parento maxed out to Beshear’s 2019 gubernatorial campaign with $2,000 contributions for both the primary and general election. David Parento contributed $3,500 for Beshear’s 2019 race to unseat former Governor Matt Bevin.

Category: Center for Open GovernmentTransparency and Accountability