Losing bidder raises questions on Guinn’s seniors drug program

Friday, Oct. 13, 2000 | 10:56 a.m.

CARSON CITY -- One of the losing bidders for Gov. Kenny Guinn's new seniors prescription drug program says it could have provided a better deal for the state's low-income elderly.

But state officials say it was the best overall proposal of the five submitted to provide a low-cost insurance policy for which 10,000 to 12,000 senior citizens will be eligible.

Michael Howard, vice president of MatureRX-Plus, says his firm submitted a bid that would have offered a premium to seniors of as low as $11 per month. The winning firm, Pharmaceutical Care Network, has a base premium cost to seniors of $34.76.

Howard is puzzled why his firm didn't get the contract, but MatureRX won't appeal because it would have to post a $1.2 million bond. Instead, he said, his company will compete for the business of some 200,000 Nevada elderly who are not eligible for the Guinn program.

Charlotte Crawford, director of the state Department of Human Resources, which oversaw the bidding process, said Pharmaceutical Care "offered the best overall value."

Pharmaceutical Care initially submitted a proposal that called for a $98 a month premium. A senior citizen who qualified for a maximum state subsidy of $40 would then pay $58. MatureRX presented a policy with a base price of $51 a month, which would have been reduced to $11 with the maximum $40 subsidy.

After Pharmaceutical's selection, Crawford and her crew then negotiated for a second policy that carried a lower premium. She said Thursday that was permitted, and Howard agreed that changes could be made after the selection of the contractor.

Howard said his company offered coverage on all of the drugs. His firm would have charged a co-payment of $8 for generic drugs compared with Pharmaceutical's $10. On name-brand drugs, seniors would have shelled out a co-payment of $22 under MatureRX compared with $25 for Pharmaceutical.

MatureRX did not require a deductible to be paid before the coverage kicks in. Pharmaceutical requires a $100 a year deductible.

But MatureRX limited maximum benefits a year to $2,000 compared with $5,000 for Pharmaceutical. And Pharmaceutical offered mail order service.

Crawford said his company has a network of 40,000 pharmacies and told state officials it would offer mail order business if they wanted it.

Crawford said his company also was marked down in the evaluation on its financial status, because it was new. But he said it was a subsidiary of the largest pharmacy benefit management firm in the nation, Advanced PCS.

"They gave us a zero and said we didn't have any value. That's a joke," he said.

MatureRX, he said, wanted to get the endorsement of the state to help it market its policies to other seniors not eligible for Guinn's program.

"If that's their (Pharmaceutical's) best offer, we feel we're extremely competitive. We ought to capture a lot of business," he said.

Seniors who earn less than $21,500 a year qualify for the Guinn program. The subsidy ranges up to $40 a month. But only those who are below $13,000 will be eligible for the full amount.

Signups start next month, and the policy becomes effective in January.