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BOISE, Idaho (AP) — A dental service provider has filed a lawsuit claiming the Idaho Department of Administration violated the state's procurement laws in awarding a $130 million contract designed to administer dental benefits to Idaho Medicaid participants, the provider announced Thursday.
Officials with Oregon-based Advantage Dental filed the lawsuit against the state last week alleging that the contract is void and any money paid to Texas-based Managed Care of North America should be returned back to the state, the company said in a statement.
"We, at Advantage Dental, understand that we won't win all bids, but we also believe that the competition will be fair for all applying," said Dr. Mike Shirtcliff, president and CEO of Advantage Dental. "We know that Idaho has a history of procurement issues and we worry the system used is flawed, and changes must be made."
According to the lawsuit, the state awarded the contract to the Texas company earlier this year, even though Advantage claims that the provider had not submitted a required credit report or proof that the company was registered to do business in Idaho.
The suit also contends that Advantage was unfairly disqualified from being awarded the contract because the department chose to evaluate MCNA's application, essentially eliminating Advantage from the top three contenders.
Blue Cross of Idaho Care Plus, Delta Dental of Idaho and Nevada-based Liberty Dental also applied for the $48 million-a-year contract and are named as defendants in the lawsuit.
Diane Blume, program specialist for the administration department, said the agency does not comment on pending litigation. MCNA did not immediately respond to an emailed request for comment.
On Thursday, Advantage attorney Jeremy Chou proposed a bill to a small group of Idaho lawmakers that would tweak the state's procurement laws so that vendors could request a judicial review of denied applications.
The legislation would only apply to contracts worth $5 million or more. Furthermore, the legislation would require the losing party to pay any attorney and court fees of everyone involved. This would deter vendors from submitting frivolous requests for judicial review, Chou said.
Currently, the department is in charge of approving the majority of state contracts, as well as vendor appeals on denied applications — but those rarely result in a judicial review.
The legislation did include an emergency clause, making the law retroactive beginning Sept. 1, 2016. Lawmakers pointed out that this would apply to Advantage's denied application and thus allow the company to request a judicial review of the department's decision.
The legislative interim panel, which is in its second year of reviewing Idaho's contracting laws, quizzed Chou about the legislation but did not take any action on the proposal.
Advanatage's lawsuit follows a separate legal battle also involving accusations of the department violating state procurement laws.
In March, the Idaho Supreme Court agreed with a district judge that the $60 million contract for broadband in public schools was illegal because the department wrongly amended the contract after it had been awarded.
There is still fallout from that lawsuit, with officials now determining if the contract's vendors should return the money the state paid to them.
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