Lawsuit Charges CA Dept. of Public Health Placing HIV/AIDS Patients at Risk

A longtime provider of health services to California AIDS/HIV patients announced today it has filed two lawsuits against the California Department of Public Health (CDPH) alleging that attempts to switch the program to new, out-of-state vendors in less than three weeks could put patients at risk.

The suits, filed Tuesday by Oakland-based Ramsell Corporation in Sacramento County Superior Court seek to keep the current AIDS Drug Assistance Program (ADAP) in place until a judge can review the lawsuits.

The suits claim CDPH's transition is a "hectic attempt" to quickly shift responsibility from Ramsell, which has successfully overseen the ADAP program for 19 years, to out-of-state vendors. The result "will unnecessarily place at risk the patients who are dependent on the program for life-saving drugs," according to the suits.

In a June 14 letter to CDPH unrelated to the lawsuits, a number of major community-based HIV/AIDS service providers requested a three-month extension for the project due to concerns about the feasibility of the transition timeline, writing "we believe additional planning is necessary for a transition of this magnitude."

While these organizations have voiced appreciation to CDPH's Office of AIDS for seeking upgrades to the system and working with them, they said: "We are deeply concerned that clients who will have to change pharmacies have not been notified with less than three weeks remaining until the July 1st transition. Some of the clients affected could be homeless, marginally housed, or have other life challenges that could make contacting them challenging in such a short time period."

The letter was signed by Access Support Network of San Luis Obispo and Monterey Counties; AIDS Project Los Angeles; Los Angeles LGBT Center; Project Inform; San Francisco AIDS Foundation and the San Francisco Department of Public Health.

ADAP is a federal program administered by the states to help ensure that people living with HIV and AIDS, who are uninsured and under-insured, have access to medication.

Transitioning to new vendors is an enormously complex endeavor that involves: (1) creating and managing client database; (2) capturing and tracking client, third-party, insurance coverage; (3) capturing and tracking client-patient eligibility for benefits and coverage; (4) providing notification to ADAP enrollment workers, ADAP Clients, Department of General Services participating entities and, if applicable, participating entities' program, participating entities' clients, regarding program eligibility and benefits; (5) hosting program pharmaceutical formularies; (6) exchanging information between contractors and the state's enrollment benefits management, medical benefits management companies and other contractors; and (7) providing reporting functions.

Illegal Bidding Processes

Ramsell's lawsuits are specific to each of the following contracts: Pharmacy Benefits Management (PBM), which was awarded to Arizona-based Magellan Rx Management, LLC, and the Enrollment Benefits Management (EBM) program awarded to Michigan-based A.J. Boggs & Co., Inc.

The suit over PBM alleges that in procuring the new contracts, CDPH: (1) failed to follow its own rules as set forth in the Request for Proposals (RFP); and (2) conducted the procurement in a biased manner that was slanted in favor of the out-of-state companies.

The suit relating to the EBM contract alleges that after Ramsell complained about major defects in the unfair procurement, CDPH cancelled the award to Boggs, and then gave them an illegal, sole-sourced contract only days later in violation of the requirements of the State Contracting Manual. The lawsuit also notes that the Boggs' bid was about three times higher ($9 million more) than the Ramsell bid.