Ohio Controlling Board, Aug. 25 — The Controlling Board approved a contract letting Mercer perform Ohio’s external quality review organization (EQRO) work for Medicaid after agency officials said few vendors bid and federal rules require the state to hire an independent third party.
The vote approved spending authority for an EQRO contract that the Department of Medicaid described as required by the Centers for Medicare & Medicaid Services (CMS) and made up of roughly 31 discrete review and validation projects. Agency officials said the contract's cost reflects both a larger set of federally required activities and higher reporting and analytic detail CMS now demands.
Why it matters: The EQRO work underpins federal reporting, validates performance measures, and supports quality-improvement projects tied to managed-care organizations (MCOs). Controlling Board members pressed the department on why more bidders did not respond, the growth in contract costs, and whether the state can reduce reliance on outside contractors.
Medicaid officials said the market for EQRO work is small and specialized. Adam Lanafelt of the Department of Medicaid said roughly a dozen firms nationally provide this work; several operate only in a single state. Allison Miles, deputy legal counsel who oversees procurement, said the department invited additional qualified firms after an initial solicitation produced an unsuccessful bidder and one inadequate proposal.
"Mercer won the contract," Miles told the board, adding that the department ran a targeted solicitation, used a published scoring rubric and negotiated contract terms after Mercer earned sufficient points to open pricing.
Officials and clinical staff described what the EQRO does and how the results are used. Cara Miller, of the department’s clinical team, said the work includes validation of performance measures submitted by MCOs, administrative compliance reviews (performed once every three years), validation of performance-improvement projects, network adequacy monitoring, provider and consumer satisfaction surveys, and encounter-data validation used for rate-setting and program integrity. She said some earlier reports to CMS were 63 pages in 2020; the most recent report ran to 223 pages.
Board members questioned the procurement timeline and the department’s efforts to increase competition. Representative Jamie Stewart (member) said the state could have sought bidders earlier to allow a full competitive process. The department said timing and the federal application schedule constrained a full open RFP this cycle but that it ran the targeted solicitation "as close to a traditional procurement as possible," including a public Q&A and a scoring rubric shared with bidders.
On cost, members noted sharp growth compared with earlier contracts. Medicaid officials said costs rose because the number and complexity of required projects increased; some projects begin in different fiscal years, which also drives year-to-year variation. The department said it negotiates performance and includes contract provisions for corrective actions and service credits if vendor performance fails to meet standards.
Discussion vs. decision: Board members repeatedly framed the discussion as oversight and concern about growing contractor spending. The formal action taken was approval of the contract (no amendment of terms by the board).
Actions: {"motion":"Approve item 72 (Department of Medicaid EQRO contract)","mover":"not specified in transcript","second":"not specified","tally":null,"outcome":"approved","notes":"Controlling Board approved spending authority after department described procurement and federal requirements."}
Speakers: [
{"name":"Adam Lanafelt","role_title":"Department of Medicaid representative","affiliation_type":"government","affiliation_name":"Ohio Department of Medicaid"},
{"name":"Allison Miles","role_title":"Deputy Legal Counsel, Contracts and Procurement Bureau","affiliation_type":"government","affiliation_name":"Ohio Department of Medicaid"},
{"name":"Cara Miller","role_title":"Clinical team member","affiliation_type":"government","affiliation_name":"Ohio Department of Medicaid"},
{"name":"Senator Huffman","role_title":"Controlling Board member","affiliation_type":"government","affiliation_name":"Ohio Senate"},
{"name":"Representative Jamie Stewart","role_title":"Controlling Board member","affiliation_type":"government","affiliation_name":"Ohio House of Representatives"},
{"name":"Senator Ingram","role_title":"Controlling Board member","affiliation_type":"government","affiliation_name":"Ohio Senate"},
{"name":"Representative Davila","role_title":"Controlling Board member","affiliation_type":"government","affiliation_name":"Ohio House of Representatives"},
{"name":"Representative Veil","role_title":"Controlling Board member","affiliation_type":"government","affiliation_name":"Ohio House of Representatives"}
]
Authorities: [
{"type":"regulation","name":"Centers for Medicare & Medicaid Services (CMS) EQRO requirements","referenced_by":["Adam Lanafelt","Allison Miles","Cara Miller"]},
{"type":"other","name":"Medicaid managed care provider agreements","referenced_by":["Cara Miller"]}
]
Discussion_Decision: {"discussion_points":["Limited number of qualified vendors nationally for EQRO work","Significant growth in required projects and CMS reporting detail since 2020","Whether the department could increase internal capacity or split projects to attract competition","How the EQRO results feed quality improvement and compliance actions"],"directions":["Department to use EQRO reports for quality-improvement projects and to enforce provider agreements; clinical team to work directly with vendor"],"decisions":["Controlling Board approved the EQRO spending authority for the contract with Mercer."]}
Clarifying_details: [
{"category":"market_size","detail":"Department stated ~12 firms nationally perform EQRO work; about 6 operate only in a single state","value":12},
{"category":"report_size_change","detail":"CMS technical report grew from 63 pages (2020) to 223 pages (2024)","value":null},
{"category":"contract_scope","detail":"Contract comprises 31 discrete projects required by CMS","value":31}
]
proper_names: [{"name":"Mercer","type":"business"},{"name":"Centers for Medicare & Medicaid Services","type":"agency"},{"name":"Ohio Department of Medicaid","type":"agency"}]
searchable_tags:["Medicaid","EQRO","Procurement","CMS","Mercer","quality_improvement"]
provenance:{"transcript_segments":[{"block_id":"item72_intro","local_start":0,"local_end":143,"evidence_excerpt":"Item number 72, the Department of Medicaid. For the record, please state your name. Adam Lanafelt, Department of Medicaid.","reason_code":"topicintro"},{"block_id":"item72_discussion_finish","local_start":0,"local_end":252,"evidence_excerpt":"We scored them... Mercer won the contract... This contract includes 31 scopes of work, 31 pieces of projects basically. Those projects are required by CMS.","reason_code":"topicfinish"}]}