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DPS board extends Kaiser health contract one year, restarts bidding process

Denver Public Schools Superintendent Alex Marrero declined to endorse his staff’s recommendation to award Motiv Health and UnitedHealthcare a three-year contract during Thursday’s board meeting.

The staff recommendation came after Kaiser Permanente — which has held the contract for more than five decades — was outbid last year by three other insurers.

Marrero cited “interference” with the RFP process.

“A lot of meddling has happened in this process,” Marrero said.

Board members voted 6-1 to extend the current contracts for one year. Board President Xóchitl Gaytán was the lone no vote.

This means the district will reissue a Request for Proposals (RFP).

In the fall, the district solicited proposals from four vendors, including Kaiser Permanente, for medical benefits next fiscal year. MotivHealth garnered the highest score at 77.7 out of 100. Kaiser earned 69.3, placing it last.

Vendors were evaluated on costs, technology and innovation as well as service and support, among other things.

After failing to secure the bid, Kaiser officials submitted an additional proposal after the RFP process had closed, Scott Pribble, a district spokesperson, said in an email.

Kaiser leadership then reached out directly to DPS staff and attended public meetings “hoping to improperly influence the decision that had been made,” Pribble said.

After allegations that DPS Chief of Talent Edwin Hudson may have acted inappropriately during the bid process, he was placed on leave, pending an investigation, Pribble said.

Hudson, Pribble said, was later cleared of any wrongdoing.

“The independent investigation also concluded that Denver Public Schools completed a valid and legal request for proposal process,” Pribble said.

Kaiser officials praised the decision.

“Throughout this process, we’ve spoken about our shared history of working together to improve the health of employees, staff and students,” Elizabeth Whitehead, a Kaiser Permanente spokesperson, said in a statement.

“We remain steadfastly committed to being DPS’ trusted partner in health.”

Whitehead declined to address questions about Kaiser’s revised proposal or its communications with district officials during the bidding process.

Prompted by declining enrollment and higher than projected claim costs, district officials had recommended moving to a new vendor, ending a 50-year relationship with Kaiser Permanente Colorado.

Last fiscal year the district spent $5 million on third-party fees and $36 million on health claims, officials said.

The move angered the teachers union.

“When healthcare costs are underbudgeted and poorly predicted, employees pay the price,” DCTA said in a social media post.

The union — which represents roughly 4,200 teachers across the district — had called on the board to extend the Kaiser Permanente contract for a year to “commit to a collaborative, transparent RFP process.”

Had the board not voted on the one-year extension, it would have forced thousands of educators and their dependents to switch doctors by July 1.

About 5,800 union members and their dependents receive their health care through Kaiser, said Rob Gould, president of the Denver Classroom Teachers Association. More than half use Kaiser.

In other business, the board approved a property swap needed to sell the Yuma Street administrative building and offset a recent $12.5 million warehouse purchase, in a lease-purchase structure that’s being challenged in court. Members unanimously approved the action without comment.


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