Legislators question DHS over plan to award IRIS contract

Editor’s note: An earlier version of this article first appeared in the Wisconsin Health News daily email newsletter. It’s since been updated to reflect PPL’s motion to dismiss the U.S. Department of Justice lawsuit. You can sign up for a free trial of Wisconsin Health News here.

Legislators are questioning the Department of Health Services over its plan to award a Medicaid contract to a company that is now facing a federal lawsuit over an alleged fraud scheme.

The company disputes the allegations and, on Thursday, filed a motion seeking the lawsuit’s dismissal.

The Department of Health Services wants to have a single fiscal employer agent, instead of the current three, for IRIS, which is short for Include, Respect, I Self-Direct. The program allows around 30,000 older adults and those with disabilities to choose the long-term care services they need and hire their own workers. Fiscal employer agents handle human resources tasks for them, like hiring paperwork, payroll and claims processing.

DHS said in January it planned to award a contract to New York-based PPL, which serves as a fiscal intermediary for consumer-directed services in 18 states. The choice drew protests from the three other vendors that applied. Since February, DHS has been reviewing the protests.

Sen. Eric Wimberger, R-Gillett, and Rep. Robert Wittke, R-Racine, co-chair the Joint Legislative Audit Committee. They sent a letter to DHS Secretary-designee Kirsten Johnson at the start of the month about the procurement.

The two lawmakers noted the U.S. Department of Justice filed a civil lawsuit last month against PPL, New York’s health department and its state Medicaid director that alleges a fraud scheme in the state’s self-directed Medicaid long-term care program.

Wimberger and Wittke asked DHS about its procurement process, when it will complete its review of the protests and how it’s addressing concerns.

“Once this lawsuit came up, we got very concerned,” Wittke told UpFront this week.

Wittke said he would like to see the “brakes put on — no contract executed, questions answered and then go through, if you have to, and redo the process.”

DHS confirmed receiving the letter, but declined comment as protest review is underway. DHS has not signed a contract, a state agency spokesperson said.

Wittke’s office shared the department’s response to the letter, in which DHS said it conducted the procurement in compliance with state law and policy.

“The state of Wisconsin is aware of the lawsuit filed in New York, has reviewed the allegations and is monitoring the case for more information as the case is litigated before the court,” the response noted.

In a statement about the lawsuit, a PPL spokesperson said New York chose it to run the state’s self-directed program “through a rigorous, transparent and competitive procurement.”

“We reject the claims in this complaint unequivocally,” they said. “It rests on inaccurate allegations that misrepresent who PPL is and how we work.”

A spokesperson for the New York State Department of Health told Politico that the lawsuit was an attempt by Republicans to score “political points at the expense of vulnerable New Yorkers” and was “inexcusable and completely lacking in merit.”

In its Thursday motion, PPL and the state of New York called the lawsuit “an act of gross overreach by the federal government.”

“True to its promise to use lawfare against its political enemies, this administration deploys the Department of Justice against New York and its contract partner PPL for executing a lawful state program that the Administration’s political allies opposed,” the motion noted.

At an event with Vice President JD Vance last week in Milwaukee focused on fighting fraud, Assembly Majority Leader Tyler August, R-Walworth, questioned why the state would hire a company facing scrutiny for its handling of Medicaid programs elsewhere as well as a federal lawsuit.

“I wouldn’t do that,” he said.

Wisconsin’s move to slim the number of vendors from three to one has raised concerns among advocates for program members who worry about a lack of choice and how a single vendor will be held accountable for missteps. DHS has said having one fiscal employer agent will make processes more consistent and lead to better customer service.