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Competitor challenges no-bid contract extension proposal

Competitors are raising questions about a Cuomo administration proposal tucked away in the state budget that would give a Long Island-based company a health care contract worth tens of millions of dollars without seeking competitive bids.

As part of his state budget plan, Gov. Andrew M. Cuomo has proposed renewing a Medicaid contract currently held by Island Peer Review Organization, critics said. The nonprofit entity, based in Lake Success, calls itself "one of the nation's leading health care quality improvement and evaluation organizations."

IPRO currently has two contracts, valued at a combined $116 million, to assist the state in implementing Medicaid programs. One of the contracts is set to expire in 2016, but the Cuomo administration has proposed extending it five years without opening up the contract to other bidders. The state budget is due by April 1.

One Long Island lobbyist has sent legislators a memo crying foul.

"What is the state urgency to extend for an unlimited period of time this very lucrative contract which will benefit one vendor?" Arthur "Jerry" Kremer, president of Uniondale-based Empire Government Strategies, wrote. "How is the public interest served by waiving competitive bidding?"

Further, Kremer said, the contract extension potentially violates state law by benefiting a private company and sets a precedent for eroding the state's competitive bidding laws.

Kremer represents New York County Health Services Review Organization (NYCHSRO), a nonprofit medical review service that wants to bid on the contract. He said the letter was to go out Wednesday to the Cuomo administration and state legislative leaders.

Cuomo's Budget Division contended it needs "streamlined procurement" in order to continue the process of moving some people into managed-care health systems and expanding Medicaid-supported housing. Officials said New York is under tight federal time frames to make changes to its Medicaid program.

"If we didn't have this language, it could result in a lengthy contract renewal/reauthorization period that would impact implementation time frames," a Budget Division official said.

Island Peer Review didn't immediately return a call to comment.

Kremer said there was no justification for extending a contract that won't expire until 2016.

"There is no emergency," he said.

Tags: Andrew Cuomo , state budget

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