Idaho Supreme Court Ruling on Mental Health Services Contract Impacts Elevance Health

The Idaho Supreme Court recently ruled against an Elevance Health subsidiary in its bid for a mental health services contract, underscoring issues in AI-driven prior authorization delays and regulatory compliance requirements. This case, initiated on December 18, stemmed from the Idaho Department of Health and Welfare's 2021 solicitation for its Behavioral Health Plan. Despite Carelon, an Elevance Health company, being initially chosen, Magellan Healthcare, a Centene company, and UnitedHealth's Optum raised concerns about Carelon’s role in formulating bid specifications. Ultimately, Magellan secured the four-year, $1.2 billion contract.

In the face of this setback, Carelon pursued a declaratory judgment and an extraordinary writ against Idaho and Magellan, but the court dismissed these on insufficient legal grounds. Currently, Elevance Health has not provided further comments. This case highlights the complexities and regulatory challenges involved in state procurement for significant healthcare contracts, emphasizing the necessity for insurance payers and providers to navigate bidding processes with careful attention to regulatory compliance and risk management to avoid disputes.