New Mexico fights conflict-of-interest allegations in Medicaid managed care contracts

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Editor's note: This article has been updated to better reflect the ownership structure and relationships of the entities involved. Mercer is not a subsidiary of any of the companies that won a bid through the New Mexico Human Services Department.

The state of New Mexico fired back this week against allegations that its selection of new contractors for the state's Medicaid program was sullied by a major conflict of interest.

The state's Human Services Department said the “allegations are both overblown and inaccurate,” in a filing with New Mexico District Court in Santa Fe dated Feb. 15.

Last month, Molina Healthcare sued the state saying its contract was cancelled because of unfair competition from a company that helped evaluate bids.

At the center of the case is the state's relationship with Mercer Health & Benefits LLC, which reviewed bids in 2012 and in 2017.

Mercer does business with Envolve Pharmacy Solutions, which is owned by Centene — as is Western Sky Community Care. Western Sky is one of three companies ultimately selected in January by the Human Services for contracts to manage care for Medicaid recipients beginning in 2019.

In a letter attached to the state filing, Mercer attorney Derek MacKenzie said Envolve is one of the pharmacy benefits managers that Mercer introduces to its clients, according to the Santa Fe New Mexican. Mercer is paid by its clients for the services and not by Envolve, he wrote.