news-record.com

While saving money on the state’s over-budget Medicaid program for the poor is laudable, trying to reach that goal by pushing no-bid service contracts can be a risky proposition.

With the General Assembly’s blessing, the Department of Health and Human Services can circumvent, for six months, the competitive bid process. The rationale is that quickly finalizing contracts will help generate substantial savings during the recession.

However, that gives DHHS way too much discretion without sufficient  oversight. Unless the agency’s clients are properly served, any money saved will be a hollow accomplishment.

And questions are being asked about the $33 million Medicaid diabetes supplies pact with a company that relocated to Charlotte from Florida, where it left a trail of questionable business practices, lawsuits and bankruptcy.

Equally troubling are complaints from health professionals that Prodigy Diabetes Care’s glucose testing meters may be confusing and less accurate than some other models. They fear that unless people enrolled in the program receive proper training, some may put off testing, which could lead to serious, costly health issues.

Letting contracts under a veil of secrecy inevitably leads to questions. Did the state get the best deal possible? What went into the decision-making process? Could another vendor have provided a superior product or service for less, had it also been notified? There’s no way of knowing.

According to The News & Observer of Raleigh, a protesting competitor contends that the no-bid procedure clearly violates federal Medicaid rules. That ought to be easy enough for the state to determine — and promptly.

Ideally, heightened transparency should compensate when competition lags. But despite rumblings that this deal included a Prodigy promise to move production from China to Charlotte and create 150 jobs, the contract lacks specific incentives. 

Even if company officials can adequately explain past problems, enough red flags are waving to justify closer DHHS scrutiny and proceeding cautiously. To protect taxpayers, checks and balances need to be in place.

State contracts first must assure clients that they’re getting the highest level of service from reliable providers. Opening the process to all qualified bidders is the best way of doing it. To do otherwise understandably raises  fears of favoritism and abuse.