IN THE OFFICE OF ADMINISTRATIVE HEARINGS

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1 0 0 David G. Derickson, State Bar No. 000 John P. Kaites, State Bar No. 0 Michael S. Love, State Bar No. 0 RIDENOUR, HIENTON & LEWIS, P.L.L.C. Chase Tower 0 North Central Avenue, Suite 00 Phoenix, Arizona 00-0 (0) -00; Fax (0) -0 Firm designatedcontact@rhlfirm.com Attorney dderickson@rhlfirm.com mlove@rhlfirm.com Attorneys for Interested Party/Protestant/Appellants In the Matter of: MAGELLAN HEALTH SERVICES OF ARIZONA, INC. AND MAGELLAN COMPLETE CARE OF ARIZONA, INC., vs. IN THE OFFICE OF ADMINISTRATIVE HEARINGS Appellants, ARIZONA DEPARTMENT OF HEALTH SERVICES, and Respondent, MERCY MARICOPA INTEGRATED CARE, Intervenor. Docket No. F-00-ADM No. Solicitation: ADHS-0000 MAGELLAN S OBJECTION TO AHCCCS MOTION FOR LEAVE TO INTERVENE AS AN INTERESTED PARTY And ADHS S JOINDER IN AHCCCS MOTION TO INTERVENE (Assigned to Hon. Diane Mihalsky) Magellan Health Services of Arizona, Inc. ( MHSAZ ) and Magellan Complete Care of Arizona, Inc. ( MCCA ) (collectively, Magellan ) objects to the Arizona Health Care Cost Containment System s ( AHCCCS ) Motion to Intervene and to the Arizona Department of Health Services ( ADHS ) Joinder in Motion to Intervene. The addition of multiple intervenors, multiple law firms and unnecessary duplication does not serve the interests of a fair and orderly proceeding, judicial economy or any other valid 0;pap;-000

2 0 0 purpose. Not only does AHCCCS lack standing to intervene, but any interest that AHCCCS may assert in the process is already adequately protected by Attorneys for ADHS in this administrative hearing. INTRODUCTION AHCCCS stated goal in its Motion to Intervene is to get the best possible RBHA for Maricopa County. This goal is not unique to AHCCCS. In fact, it is the fundamental goal of the bid process and one which is shared by both ADHS and Magellan. The best way to ensure that the best possible RBHA is awarded the RBHA Contract is by ensuring the integrity of the bidding process. To that end, this matter is scheduled for a three day administrative hearing beginning August, 0Among the issues raised on appeal, Magellan maintains that the integrity of the bid process was tainted because ADHS committed certain significant legal and factual errors in awarding the RBHA contract to an unqualified bidder, including bias by ADHS in scoring the offers and amending the Solicitation to favor MMIC. As to these issues, ADHS is adequately represented by the Arizona Attorney General s Office. Magellan further argues that MMIC is not a responsible bidder and that MMIC s bid includes the creation of an illegal relationship with Maricopa Integrated Health System ( MIHS ). As to these issues AHCCCS intervention is also unnecessary. Faced with the substantial risk of losing the RBHA Contract, MMIC sought to intervene to preserve its own interest in upholding the RBHA Contract. See MMIC s Motion to Intervene, at pg., ls. -. MMIC has aggressively defended its award of the RBHA Contract at every stage, participating in the initial protest before ADHS and the appeal Apparently AHCCCS is not concerned with or unaware of parts of Gila County, which are also within the GSA RBHA District. The law is clear: a RBHA can only serve as a manager of behavioral health services, A.R.S. -0(C), yet MMIC s members include providers of behavior health services. - -

3 0 0 proceedings before the Arizona Department of Administration ( ADOA ). Id. at pg., lines -. Magellan did not object to MMIC s Motion to Intervene, which was granted by the ALJ. See Case Management Order No.. AHCCCS now seeks to jump on Respondent s bandwagon by claiming that it, too, has a right to intervene and be heard on appeal despite the fact AHCCCS was neither the party awarding the RBHA Contract (ADHS) nor the party awarded the RBHA Contract (MMIC). AHCCCS is not uniquely situated to defend ADHS or MMIC s actions in this appeal. Its interests are adequately represented by the Arizona Attorney General and/or the law firms of PERKINS COIE, LLP, SNELL & WILMER, LLP, or COPPERSMITH, SCHERMER & BROCKELMAN. The Standard for Granting A Motion to Intervene Rule (a) of the Arizona Rules of Civil Procedure provides: (a) Intervention of Right Upon timely application, anyone shall be permitted to intervene in an action: () when a statute confers an unconditional right to intervene; or () when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant s ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. (Emphasis added by AHCCCS.) AHCCCS does not claim a statutory right to intervene, as no such unconditional right exists. Instead, AHCCCS draws the ALJ s attention to the isolated word anyone while ignoring the actual enumerated criteria establishing when anyone may intervene. In the absence of an unconditional statutory right to intervene, the rule governing intervention requires that the applicant claim an interest relating to the property or transaction which is the subject of the action and (be) so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest. High School Dist. No. 0, Pima County v. Civil Rights Division, Ariz.,, 0 - -

4 0 0 P.d 0, (App. ) (emphasis added), quoting A.R.S. Rules of Civil Procedure, rule (a). See also Planned Parenthood Arizona, Inc. v. American Ass n of Pro Life Obstetricians and Gynecologists, Ariz., 0 0, P.d, (0) (Arizona Catholic Conference failed to demonstrate that its interests would be inadequately served by the representation provided by the Attorney General). AHCCCS Interests Are Adequately Represented by ADHS The issue is whether AHCCCS interests ensuring a qualified RBHA is in place to provide integrated physical and behavioral health services to Medicaid eligible adults with Serious Mental Illness (SMI) are adequately represented without AHCCCS intervening. AHCCCS interests should have been protected through its active participation in the Solicitation and in ensuring an integral bid process not by jumping into the fray to argue on behalf of (or in opposition to) a specific bidder. Specifically, AHCCCS worked with ADHS to establish the appropriate level of expectations and demands on a future contractor in order to secure the best possible candidate for award. See AHCCCS Response at pg., lines -. Indeed, because AHCCCS is accountable to the federal arm of Medicare (the Centers for Medicare and Medicaid Services or CMS ), AHCCCS ensured that all responsible bidders be qualified to provide integrated physical and behavioral health care for SMI AHCCCS recipients and for AHCCCS recipients who are dually eligible for Medicaid and Medicare (through a Duals Special Needs Plan or D-SNP ). AHCCCS also had two members on the Solicitation evaluation committee. From there, AHCCCS delegated considerable authority to ADHS to oversee the RBHAs.... See AHCCCS Response at pg., lines -. In joining AHCCCS Motion to Intervene, ADHS tries to put the ball back in AHCCCS court, arguing that the RBHA Contract involves a transition to integrated care, which presents unique issues that AHCCCS, as the single state Medicaid agency, is best equipped to address. See - -

5 0 0 ADHS Joinder, at pg., lines -. Assuming ADHS was qualified to oversee and select a bid for integrated behavioral and medical health care, it is inconceivable that ADHS is now unqualified to adequately speak to these same issues on appeal. More importantly, the transition to integrated care is not even an issue on appeal. AHCCCS transition argument was made at the Motion to Stay level an argument flatly rejected on May, 0, when the ADOA correctly determined that a stay of the RBHA Contract is in the best interest of the State: The Director acknowledges the transition to a new model for integrated physical and behavioral health services, but respectfully disagrees the performance of the contract awarded to MMIC, especially related transition activities, should not be stayed pending resolution of the appeal.... [T]he Director concludes based on the impact transition of services imposes, the expense of the contract and RFP, the scope of the services provided and the population and their families it serves, a stay is in the best interests of the state. See May, 0 Decision and Order Regarding Request for Stay. Similarly, AHCCCS argues that its separate interests are affected because it will be hampered in doing its job while the State is required to separate the physical and behavioral health service responsibilities among two or more contractors in Maricopa County. See AHCCCS Response at pg., lines -. As before, this argument addresses the stay that is already in place and has nothing to do with the issues raised on appeal. It also creates a false sense of urgency, as Magellan s RBHA activities are presently providing the very services which AHCCCS claims would be at risk. On August, 00, Governor Brewer, ADHS, Magellan, MIHS, and the provider clinic chief executive officers announced the launching of Magellan s integrated care model. Since then, and under the terms of its existing contract, Magellan has developed and implemented integrated care for members. To date, Magellan has implemented and managed integrated care health homes serving over,000 members in clinics with - -

6 0 0 expansion plans for the remaining clinics. These very clinics are proposed as the core of MMIC s integrated program, which is nothing more than a continuation of Magellan s integrated care program. Therefore, whether AHCCCS participates in this appeal or not, members will continue to benefit from the integrated care program that is currently in place and proposed to be expanded by both companies. Quite simply, AHCCCS rights will not be affected one way or the other by the outcome of this proceeding. AHCCCS should not be permitted to pick and choose who it wants to work with outside the legal confines of the bid process. By rule, the RBHA Contract shall only be awarded to a responsible offeror whose offer is determined to be most advantageous to the state based on the evaluation factors set forth in the solicitation. See A.A.C. R--C(A). In the end, AHCCCS will be working with whatever entity is ultimately determined to be a responsible offeror whose offer is most advantageous to the state. Whether that is Magellan or MMIC, there is no direct legal effect on AHCCCS rights. The Right to Intervene Does Not Apply to Witnesses AHCCCS further claims that because it has been requested to produce documents and may have staff that will be called as witnesses AHCCCS has somehow obtained the status of an intervenor. The fallacy in AHCCCS s argument is that relevancy is not the standard for intervening. If it were, any witness could intervene in any action. AHCCCS is free to have counsel represent its interest in responding to document requests or preparing a witness to testify. The need for fact witnesses and/or documentary evidence does not make AHCCCS an interested party for purposes of intervening. CONCLUSION AHCCCS fails to satisfy any of the criteria for intervening pursuant to Rule (a). AHCCCS has no dog in the fight, as its legal interests are not impacted by whether Magellan or MMIC is ultimately the holder of the RBHA Contract. Any collateral effect - -

7 0 0 on AHCCCS arises from the Stay imposed by the ADOA, which is not part of the hearing process directed by the ADOA. The Stay will remain in place until this matter has concluded. Adding another party, as AHCCCS requests, adds no assistance to the ALJ in ascertaining the facts and law necessary to decide the issues on appeal and will only serve to further draw out these proceedings. Accordingly, Magellan requests that AHCCCS Motion to Intervene be denied. RESPECTFULLY SUBMITTED this 0 th day of July, 0. Copy e-filed this 0 th day of July, 0, and ed to all parties and interested persons via OAH portal. By: DC Hatheway RIDENOUR, HIENTON & LEWIS, P.L.L.C. By /s/ David G. Derickson, SBA #000 David G. Derickson John P. Kaites Michael S. Love 0 North Central Avenue, Suite 00 Phoenix, Arizona 00-0 Attorneys for Appellants - -