Gateway Health Plan, Inc. d/b/a Highmark Wholecare v. DHS

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Gateway Health Plan, Inc. : CONSOLIDATED CASES

d/b/a Highmark Wholecare, :

:

Petitioner :

:

v. : No. 147 C.D. 2025

: No. 526 C.D. 2025

Department of Human Services, : Argued: October 9, 2025

:

Respondent :

BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE LORI A. DUMAS, Judge

HONORABLE STACY WALLACE, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION

BY JUDGE WOJCIK FILED: April 2, 2026

In these consolidated appeals, Gateway Health Plan, Inc. d/b/a

Highmark Wholecare (Highmark) petitions for review of two final determinations

of the Designee (Designee) for the Secretary of the Pennsylvania Department of

Human Services (DHS), dated January 21, 2025, and April 14, 2025

(Determinations), denying Highmark’s bid protests related to the Request for

Application No. 31-22 (RFA) for the Community HealthChoices (CHC) managed

care procurement and associated award. Highmark challenges the integrity and

legality of DHS’s procurement process and claims that DHS failed to follow the law

and solicitation requirements. After careful review, we reverse the Determinations

and cancel the award of the RFA.

I. Background

On January 30, 2024, DHS, through its Bureau of Procurement and

Contract Management, issued the RFA seeking applications from Managed Care

Organizations (MCOs) to administer the CHC program in five geographic zones

(Northeast, Southeast, Lehigh-Capital, Northwest, and Southwest), which cover all

67 counties within the Commonwealth. Reproduced Record (R.R.) at 38a-86a; see

id. at 43a-44a (Map). The CHC program is Pennsylvania’s mandatory managed care

program for individuals receiving both Medicare and Medicaid, known as Medical

Assistance (MA) in Pennsylvania, and individuals who qualify for MA long-term

services and supports. Id. at 18a. The CHC program provides assistance to eligible

individuals by providing home and community-based waiver services or nursing

facility services. Id.

The deadline to receive applications was initially March 15, 2024, but

was extended to April 1, 2024. The RFA anticipated awarding contracts to no fewer

than three and no more than five applicants in each zone. Applicants were permitted

to submit an application for one or more zones, provided that the applicant submitted

“zone-specific technical and [Contractor Partnership Program (CPP)] information in

separate tabs and separate [Small Diverse Business (SDB)] and [Veteran Business

Enterprise (VBE)] Submittals by zone . . . .” R.R. at 46a.

The RFA provided four mandatory, nonwaivable responsiveness

requirements. Specifically, to be eligible for selection, applications were required

to be (1) timely received, (2) properly signed, (3) contain a compliant SDB submittal,

and (4) contain a compliant VBE submittal. R.R. at 58a. The RFA provided that

DHS could “(1) waive any other technical or immaterial nonconformities in an

2

Applicant’s application, (2) allow the Applicant to cure the nonconformity, or (3)

consider the nonconformity in the scoring of the application.” Id.

To be considered responsible and, thus, eligible for selection for

negotiations, applicants’ technical submittals were required to achieve a total raw

score of greater than or equal to 75% of the available raw technical points. R.R. at

59a. Each applicant was also required to demonstrate that it “possesses the financial

capability for the good faith performance of the Agreement.” Id. The RFA stated

that the Technical Criterion was assigned 100% of the total points based on four

evaluation factors: (1) Soundness of Approach, (2) Applicant Qualifications, (3)

Personnel Qualifications, and (4) Understanding the Project. Id. at 58a-59a.

The RFA provided that the Issuing Office would combine the

evaluation committee’s final technical scores, rank responsible Applicants by zone

according to their total overall score assigned to each in descending order, and select

for negotiations for each zone the applicants with the highest overall score. R.R. at

60a-61a. The scoring involves a formula giving the highest raw score full points and

scaling others accordingly. Id. After selection for negotiations, DHS would notify

all applicants in writing of the selected applicants. Id. at 55a. The RFA provided

that applicants not selected could request a debriefing upon notification of non-

selection. Id. at 55a-56a.

On March 29, 2024, Highmark submitted an application for all five

zones. Seven other applicants also applied for all regions, including Pennsylvania

Health and Wellness, Inc. (PHW), UPMC for You, Inc. (UPMCFY), Health Partners

Plans (Health Partners), Aetna Better Health of Pennsylvania, Inc. (Aetna), and Vista

Health Plan, Inc. (Vista) (collectively, Selected Applicants), which were ultimately

selected by DHS for award negotiations, and UnitedHealthcare of Pennsylvania, Inc.

3

(United)1 and Geisinger Health Plan (Geisinger),2 which were not selected. See R.R.

at 311a.

After opening applications, DHS determined that it was unable to open

portions of two applications for technical reasons. DHS considered the applications

as technically nonconforming and allowed the affected applicants – Aetna and Vista

-- to resubmit those portions of the applications that were inaccessible. Both

applicants resubmitted the nonconforming portions along with declarations that the

contents contained therein were unchanged except for technical modifications to

enable DHS to open the documents.

On August 19, 2024, Eric McCoy (McCoy), the RFA’s Issuing Officer,

sent a Recommendation for Grantee Selection (Recommendation Memo) to DHS

advising that the evaluation was complete and recommending five applicants for

agreement negotiations based on overall scoring. R.R. at 308a-15a. Specifically:

Technical Technical Technical Technical Technical

Applicant Score: Score: Score: Score: Score:

Northeast Northwest Lehigh/ Southeast Southwest

Capital

Aetna Better Health, Inc. 909.6 909.6 909.6 909.6 909.6

Geisinger Health Plan 891.25 891.25 891.25 891.25 891.25

Health Partners Plans, Inc. 926.90 926.90 926.90 926.90 926.90

Highmark Wholecare, Inc. 886.63 886.63 886.63 886.63 886.63

1

United filed the appeal at United Healthcare of Pennsylvania, Inc. v. Department of

Human Services (Pa. Cmwlth., Docket No. 178 C.D. 2025), which was argued seriately with, and

decided on the same day as, this case.

2

It does not appear that Geisinger filed a protest; Geisinger has not intervened in this

appeal.

4

PA Health & Wellness, Inc. 995.72 995.72 995.72 995.72 995.72

UnitedHealthcare of

868.41 868.41 868.41 868.41 868.41

Pennsylvania, Inc.

UPMC For You, Inc. 1,000 1,000 1,000 1,000 1,000

Vista Health Plan, Inc. 948.97 948.97 948.97 948.97 948.97

Applicants NOT meeting 75% Technical Threshold

N/A N/A N/A N/A N/A N/A

Id. at 311a. On August 21, 2024, DHS notified Highmark that it was not selected

for negotiations in any zone. Id. at 20a-21a.

The next day, Highmark requested a debriefing, as permitted under the

RFA and Procurement Handbook. R.R. at 23a-24a. On August 28, 2024, Highmark

timely filed its initial bid protest with DHS, alleging the evaluation was flawed and

unlawful. Between September and December of 2024, Highmark filed three

supplemental protests based on new information obtained through Right-to-Know

Law (RTKL)3 requests. DHS and Selected Applicants responded to each.

DHS Secretary appointed the Financial Policy Advisor of DHS’s Office

of Budget to serve as Designee to evaluate and render final determinations on

Highmark’s protests. See Section 1711.1(e) of the Commonwealth Procurement

Code (Procurement Code), 62 Pa. C.S. §1711.1(e) (“The head of the purchasing

agency or his designee shall review the protest and any response or reply . . . .”).

Designee consolidated the four protests for review and, ultimately, denied them by

first determination dated January 21, 2025 (First Determination). Designee reasoned

that Highmark failed to carry its heavy burden to overcome the presumption that

3

Act of February 14, 2008, P.L. 6, 65 P.S. §§67.101-67.3104.

5

DHS acted in good faith. First Determination, 1/21/25, at 12-13. Designee found

that DHS selected applicants in accordance with the RFA. Id. at 13-22. Designee

relied on two sworn declarations from McCoy (McCoy Declarations) that the

evaluation criteria were established before the applications were opened and that

each zone was separately evaluated and scored. Id.; see R.R. at 297a-99a, 623a-24a.

On February 5, 2025, DHS provided a debriefing explaining the

strengths and weaknesses of Highmark’s application. R.R. at 782a-87a. Under

Soundness of Approach, DHS identified 12 subcategories that were considered. Id.

Based on the debriefing, on February 12, 2025, Highmark filed another protest,

which Designee denied by second determination dated April 14, 2025 (Second

Determination). Highmark timely appealed both Determinations, which we

consolidated for review. Each of the Selected Applicants and United have

intervened and filed briefs.4

II. Issues

In this appeal, Highmark argues that the Determinations denying

Highmark’s protests were arbitrary and capricious, an abuse of discretion, and/or

contrary to law for the following reasons. First, Highmark contends that DHS failed

to fix or finalize the relative weights of the evaluation factors and criteria prior to

the opening of Applications as required by the Procurement Code5 and the

Procurement Handbook.6 Second, Highmark asserts that DHS failed to disclose the

4

Selected Applicants align with DHS; United aligns with Highmark.

5

62 Pa. C.S. §§101-2311.

6

The Procurement Handbook is available online at

https://www.pa.gov/agencies/dgs/procurement-resources/procurement-handbook (last visited

April 1, 2026).

6

relative weights of the evaluation factors and criteria at any time, which deprived

Highmark of a “Fair Competition” as required by the Procurement Handbook.

Third, DHS failed to evaluate the applications separately by zone, according to zone-

specific criteria, as required by the RFA. Fourth, it claims that DHS’s failure to

provide a debriefing, required under Section I-24 of the RFA and Part 1, Chapter

6(B)(14) of the Procurement Handbook, until after Designee issued the First

Determination rejecting all of Highmark’s pending protest grounds, was a violation

of Highmark’s rights under the Procurement Code. Fifth, Highmark maintains that

DHS accepted late, incomplete, and nonconforming Applications from Aetna and

Vista in violation of the RFA and law. Finally, Highmark contends that DHS failed

to produce relevant documents, namely, workbooks and training materials sent to

the evaluation committee, which were referenced in the McCoy Declarations and

relied upon in denying Highmark’s protests. We begin our review by examining

whether DHS evaluated the applications separately by zone, according to zone-

specific criteria, as required by the RFA.

III. Discussion

A. Failure to Evaluate by Zone

1. Contentions

Highmark, joined by United, argues that DHS’s evaluation of the

applications was arbitrary, capricious, and contrary to law because DHS failed to

evaluate the applications separately by zone, according to zone-specific criteria, as

required by the RFA. The RFA required zone-specific evaluations due to

demographic and geographic differences. All applicants received identical scores

across all five zones. R.R. at 311a. Highmark and United argue that such scoring is

statistically implausible and infers that DHS did not conduct separate evaluations as

required by the RFA and rebutted the presumption of good faith. If Highmark

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submitted the same application in all five zones, considering the differences in the

zones, Highmark should not have received the same score in each zone. Neither

DHS nor Designee explain this anomaly. This scoring anomaly is also inconsistent

with prior procurements. By comparison, in 2019, DHS issued RFA No. 07-19

(2019 RFA), in which the evaluation criteria and procedure were nearly identical to

those here. See id. at 896a-951a. DHS scored Highmark’s predecessor’s application

differently across each of the geographic zones. See id. at 507a, 514a, 521a.

DHS and Selected Applicants respond that each zone was evaluated

independently, as required by the RFA. The McCoy Declarations confirmed that

zone-specific scoring occurred and that no evaluator submitted a single score across

all zones. Applicants could choose to submit one application for all zones, with

zone-specific differences only if an applicant elected to provide them. Nothing in

the RFA prohibited identical scores or required variation in scoring. The identical

scores across different zones do not prove improper evaluation or failure to abide by

the RFA terms. Highmark’s claims are purely speculative. Highmark failed to carry

its heavy burden of proving the evaluations were not conducted separately by zone.

The burden was never on DHS to disprove Highmark’s assumptions. DHS is entitled

to the presumption of good faith.

2. Analysis

To begin, our “review in an appeal from a determination denying a bid

protest” is set forth in the Procurement Code. Pepco Energy Services, Inc. v.

Department of General Services, 49 A.3d 488, 491 n.3 (Pa. Cmwlth. 2012). Section

561 of the Procurement Code provides that agency determinations relating to

competitive sealed proposals are final and conclusive unless they are “clearly

8

erroneous, arbitrary, capricious, or contrary to law.” 62 Pa. C.S. §561; see 62

Pa. C.S. §513(a) and (g); Center for Climate Strategies, Inc. v. Department of

Environmental Protection, 194 A.3d 742, 744 n.6 (Pa. Cmwlth. 2018); CenturyLink

Public Communications, Inc. v. Department of Corrections, 109 A.3d 820, 824 n.7

(Pa. Cmwlth. 2015); Global Tel*Link Corp. v. Department of Corrections, 109 A.3d

809, 813 n.8 (Pa. Cmwlth. 2015). Section 1711.1(i) of the Procurement Code

similarly provides:

The [C]ourt shall hear the appeal, without a jury, on the

record of determination certified by the purchasing

agency. The [C]ourt shall affirm the determination of the

purchasing agency unless it finds from the record that the

determination is arbitrary and capricious, an abuse of

discretion or is contrary to law.

62 Pa. C.S. §1711.1(i).

The “arbitrary and capricious” standard represents a high bar for

disappointed bidders to overcome. See Local Dispensaries, LLC v. Department of

Health, 330 A.3d 550, 555 (Pa. Cmwlth. 2025). An administrative action is

“arbitrary and capricious where it is unsupportable on any rational basis because

there is no evidence upon which the action may be logically based.” Lynch v. Urban

Redevelopment Authority of Pittsburgh, 496 A.2d 1331, 1335 (Pa. Cmwlth. 1985);

see Cary v. Bureau of Professional and Occupational Affairs, 153 A.3d 1205, 1210

(Pa. Cmwlth. 2017) (holding that an agency’s failure to articulate a rational

connection between facts and its decision rendered the action arbitrary and

capricious). The United States (U.S.) Supreme Court has opined that the “scope of

review under the arbitrary and capricious standard is narrow[,] and a court is not to

substitute its judgment for that of the agency.” Motor Vehicle Manufacturers

9

Association v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43

(1983). Notwithstanding, the U.S. Supreme Court continued:

[T]he agency must examine the relevant data and

articulate a satisfactory explanation for its action including

a rational connection between the facts found and the

choice made. In reviewing that explanation, [the court]

must consider whether the decision was based on a

consideration of the relevant factors and whether there has

been a clear error of judgment. . . . The reviewing court

should not attempt itself to make up for [an agency’s]

deficiencies; we may not supply a reasoned basis for the

agency’s action that the agency itself has not given.

Id. (citation and internal quotation marks omitted); accord Cary, 153 A.3d at 1210.

“[A]n abuse of discretion occurs if, in reaching a conclusion, the law is overridden

or misapplied or judgment exercised is manifestly unreasonable or is the result of

partiality, prejudice, bias, or ill will.” CenturyLink, 109 A.3d at 827 n.13 (citation

and quotation omitted). “An error of law occurs where an agency interprets its

governing statutes, regulations, or orders contrary to their clear and plain meaning

or fails to follow its own regulations and procedures.” Aetna Better Health of

Pennsylvania, Inc. v. Pennsylvania Department of Human Services (Pa. Cmwlth.,

No. 652 M.D. 2020, filed November 17, 2021), slip op. at 11 n.7.7

The Procurement Code provides the exclusive procedure for the limited

remedy available for offerors seeking contracts or agreements with state agencies

that are aggrieved by the solicitation, i.e., RFAs or requests for proposals (RFPs), or

award of a government contract. Section 1711.1 of the Procurement Code,

62 Pa. C.S. §1711.1. A bid protestor may file a protest with the head of the

7

Unreported memorandum opinions of this Court filed after January 15, 2008, may be

cited for their persuasive value pursuant to Rule 126(b) of the Pennsylvania Rules of Appellate

Procedure, Pa. R.A.P. 126(b), and Section 414(a) of the Court’s Internal Operating Procedures,

210 Pa. Code §69.414(a).

10

purchasing agency. 62 Pa. C.S. §1711.1(a). “A protest shall state all grounds upon

which the protestant asserts the solicitation or award of the contract was improper.”

63 Pa. C.S. §1711.1(c).

Once a protest is filed, Section 1711.1(e) provides:

The head of the purchasing agency or his designee shall

review the protest and any response or reply and may

request and review such additional documents or

information he deems necessary to render a decision and

may, at his sole discretion, conduct a hearing. The head of

the purchasing agency or his designee shall provide to the

protestant and the contracting officer a reasonable

opportunity to review and address any additional

documents or information deemed necessary by the head

of the purchasing agency or his designee to render a

decision.

62 Pa. C.S. §1711.1(e) (emphasis added). The agency head is charged with

determining whether “the solicitation or award of the contract was contrary to law.”

62 Pa. C.S. §1711.1(f). Following review, “the head of the purchasing agency or his

designee shall issue a written determination stating the reasons for the decision.” Id.

If the award is determined to be contrary to the law, the remedy is limited to the

cancellation of the solicitation or proposed award or revision of the solicitation or

proposed award to comply with the law. 62 Pa. C.S. §§1711.1(f), (j), 1711.2(1).

The bid protestant bears the burden of proving that the agency’s

determination was arbitrary or capricious, constituted an abuse of discretion, or was

otherwise contrary to law. BSI Construction, LLC v. Philadelphia Regional Port

Authority, 329 A.3d 36, 44 (Pa. Cmwlth. 2024); Reading Blue Mountain and

Northern Railroad v. Seda-Cog Joint Rail Authority, 235 A.3d 438, 459 (Pa.

Cmwlth. 2020); Stanton-Negley Drug Co. v. Department of Public Welfare, 943

A.2d 377, 387 (Pa. Cmwlth. 2008); A. Pickett Construction, Inc. v. Luzerne County

11

Convention Center Authority, 738 A.2d 20, 24 (Pa. Cmwlth. 1999); J.J.D. Urethane

Co. v. Montgomery County, 694 A.2d 368, 370 (Pa. Cmwlth. 1997). To meet this

burden, a bid protestant must show that the agency “(1) abused its independent

judgment; (2) failed to follow a requirement in the RFP; or (3) incorrectly applied a

scoring criterion.” BSI Construction, 329 A.3d at 44. The burden is a “heavy” one.

J.J.D., 694 A.2d at 370. Absent fraud or collusion, a government agency is entitled

to a presumption that it acted in good faith and in the best interests of the

governmental agency in the procurement process. McIntosh Road Materials Co. v.

Woolworth, 74 A.2d 384, 393 (Pa. 1950); Wilson v. City of New Castle, 152 A.2d

102 (Pa. 1930); Reading Blue Mountain, 235 A.3d at 464; A. Picket Construction,

738 A.2d at 24; J.J.D., 694 A.2d at 370.

Because the Procurement Code governs, “Administrative Agency Law

does not apply to bid protests and appeals of bid protest determinations.”

UnitedHealthcare of Pennsylvania, Inc. v. Department of Human Services, 172 A.3d

98, 105 (Pa. Cmwlth. 2017) (citing 62 Pa. C.S. §1711.1(1)). This means that bid

protestants operate under a different procedural framework. The Procurement Code

does not provide bid protestants the right to a hearing or the “right to production of

documents or other discovery.” Id.; see 62 Pa. C.S. §1711.1; JPay, Inc. v.

Department of Corrections, 89 A.3d 756, 762 (Pa. Cmwlth. 2014). If documents

were not considered by the agency head in reviewing the protest, the documents are

not part of the certified record and will not be considered on appeal. See

62 Pa. C.S. §1711.1(e).

“Section 513 of the [Procurement] Code does not provide ‘rigid,

detailed procedure or strict requirements for the [RFP] process, but preserves a great

deal of agency discretion, including discretion to determine agency needs in

12

preparation of [RFP] requirements.’” Reading Blue Mountain, 235 A.3d at 458-59

(quoting Stanton-Negley Drug, 943 A.2d at 387). However,

the mere possession of discretionary power by an

administrative body does not make it wholly immune from

judicial review, but the scope of that review is limited to

the determination of whether there has been a manifest and

flagrant abuse of discretion or a purely arbitrary execution

of the agency’s duties or functions.

American Totalisator Co. v. Seligman, 414 A.2d 1037, 1041 (Pa. 1980); accord

Reading Blue Mountain, 235 A.3d at 458-59.

Procuring agencies are required to evaluate bids “based on the

requirements set forth in the invitation for bids[.]” 62 Pa. C.S. §512(e). “[A]ll bid

evaluation criteria for a Commonwealth contract solicitation must appear in the

invitation for bids for the specific solicitation.” Center for Climate Strategies, 194

A.3d at 744 (citing Section 512(e) of the Procurement Code, 62 Pa. C.S. §512(e)).

Procuring agencies are bound by the express provisions of their solicitation

documents. American Totalisator, 414 A.2d at 1041; Seda-Cog Joint Rail Authority

v. Carload Express, Inc., 185 A.3d 1232, 1240 (Pa. Cmwlth. 2018), aff’d, 238 A.3d

1225 (Pa. 2020). Agencies must evaluate the proposals based solely on the factors

and subfactors specified in the solicitation. See American Totalisator, 414 A.2d at

1041. An agency’s failure to follow solicitation terms may be grounds for judicial

intervention. Id.; BSI Construction, 329 A.3d at 44.

Per the RFA, applicants were invited to submit an application for one

or more zones. R.R. at 46a, 50a. If submitting an application for multiple zones,

applicants were required to “provide zone-specific technical and CPP information in

separate tabs and separate SDB and VBE Submittals by zone as set forth in Section

I-14.B.” Id. at 46a. More specifically,

13

[I]f an Applicant is submitting for multiple zones, any and

all portions of the Technical and CPP Submittals that

describe different, separate, or additional components

specifically designed to address the RFA requirements in

one particular zone must be provided under separate tabs

of the Applicant’s response for a particular section or

question, and clearly labeled as “Section or Question

[insert number and name of relevant section or question]

CHC [ zone name] Zone” and Section or Question [insert

number and name of relevant section or question] Health

Choices [ zone name] Zone,” respectively. For example,

Applicants will note in Part III, under “Personnel”, the

Department is specifically requesting that any such

different, separate, or additional organizational

structure(s) or personnel be provided under separately

tabbed sections of the Applicant’s application, and clearly

labeled as “Part III, Section III-4.C CHC [zone name]

Personnel,” respectively. If submitting for multiple zones,

Applicants must include separate SDB and VBE

Submittals for each zone in its application. The Applicant

must indicate the zone(s) for which they are applying for

on the Application Cover Sheet (Appendix A). To be

considered, the application should respond to all

application requirements. Applicants should provide any

other information thought to be relevant, but not

applicable to the enumerated categories, as an appendix to

the application. All SDB and VBE cost data should be kept

separate from and not included in the Technical Submittal.

....

Id. at 50. The RFA provided a map and detailed description of the zones:

A. The Southwest zone (“SW”) includes Allegheny,

Armstrong, Beaver, Bedford, Blair, Butler, Cambria,

Fayette, Greene, Indiana, Lawrence, Somerset,

Washington and Westmoreland Counties.

B. The Southeast zone (“SE”) includes Bucks, Chester,

Delaware, Montgomery and Philadelphia Counties.

C. The Lehigh/Capital zone (“L/C”) includes Adams,

Berks, Cumberland, Dauphin, Franklin, Fulton,

Huntingdon, Lancaster, Lebanon, Lehigh, Northampton,

Perry and York Counties.

14

D. The Northwest zone (“NW”) includes Cameron,

Clarion, Clearfield, Crawford, Elk, Erie, Forest, Jefferson,

McKean, Mercer, Potter, Venango and Warren Counties.

E. The Northeast zone (“NE”) includes Bradford, Carbon,

Centre, Clinton, Columbia, Juniata, Lackawanna,

Luzerne, Lycoming, Mifflin, Monroe, Montour,

Northumberland, Pike, Schuylkill, Snyder, Sullivan,

Susquehanna, Tioga, Union, Wayne and Wyoming

Counties.

Id. at 43a-44a. The RFA included a chart showing historical information on eligible

populations included in the CHC Program in each of the zones. Id. at 44a.

In turn, DHS was required to “evaluate all applications separately, and

. . . award [multiple] Agreements . . . to no fewer than three and no more than five

CHC-MCOs in each of the five CHC zones.” R.R. at 46a. “In determining the

number of CHC-MCOs to be awarded in each zone, [DHS] will consider the

population of a zone, [DHS]’s experience with the CHC Program, and the ability of

a zone to support multiple CHC-MCOs.” Id. To take into account the CHC’s five

separate geographic zones, the RFA stated: “The evaluation committee will evaluate

Technical Submittals for each zone separately.” Id. at 58a (emphasis added). “For

the zone(s) that an Applicant includes in its application,” DHS’s evaluation will

consider:

o Whether the Applicant has fully and appropriately

accounted for the particular or specific resources

available to and challenges face[d] by the populations

in the zone;

****

o Whether the Applicant’s approach has been

specifically crafted to address the particular and

unique demographic, cultural, economic, geographic,

or other relevant characteristics of the regions,

counties, and municipalities comprising the zone(s).

15

****

o Corporate background and history, including the

quality, relevancy, and recency of prior work by both

the company and the specific individual employees

who will be assigned to the zone, as well as the

company’s history of promoting diversity and

inclusion;

****

o The sufficiency, quality, and feasibility of the CHC-

MCO’s overall organizational structure and its

proposed organizational structure, functions, staff, and

subcontractors (if used) for the operation in the zone;

and

o The education, experience, qualifications, and other

information as required in Part III for Executive

Management, Key Administrative, and subcontracted

staff to support operations in each zone.

R.R. at 59a (emphasis added).

The RFA provided that the “Issuing Office will combine the evaluation

committee’s final technical scores, in accordance with the relative weights

assigned[.]” R.R. at 60a. The final technical scores would be determined “by giving

the maximum number of technical points available to the application with the highest

raw technical score and the remaining applications rated by applying” the following

formula:

Raw Technical Score of Proposal Being Scored x A = Final Technical Score

Highest Raw Technical Score

Id. at 59a-60a; RFP Scoring Formula.8 The Issuing Office would then “rank

responsible Applicants by zone according to their total overall score assigned to

8

The RFP Scoring Formula is available online at:

https://www.pa.gov/agencies/dgs/procurement-resources/rfp-scoring-formula (last visited April 1,

2026).

16

each, in descending order[,] and select for negotiations for each zone the Applicants

with the highest overall score.” Id. at 60a-61a.

Highmark applied for all five zones, as did the seven other MCOs.

Despite the RFA’s specifications that required applicants to provide zone-specific

submittals and information and the evaluation committee to evaluate the submittals

for each zone separately, each applicant received the exact same numerical

technical score, down to the second decimal point, across all five zones. R.R. at

311a. This outcome is statistically implausible considering the unique composition

of each zone. For example, the SE zone, which includes Philadelphia, has more than

double the eligible population as the NW zone. See id. at 44a. If an applicant

submitted the same or similar technical information for each zone, the scoring should

have varied to reflect the zone-specific criteria. Conversely, if the applications were

tailored to each zone (describing “different, separate, or additional components

specifically designed to address the RFA requirements in one particular zone,” R.R.

at 50a), it is even more unlikely that the scores would be identical across all five

zones. There was no scoring variation among the seven applicants across the five

zones.

This scoring anomaly is further highlighted by comparison to the 2019

RFA, in which DHS invited applicants to submit proposals in one or more zones

under a nearly identical evaluation framework. See R.R. at 896a-951a. Highmark

presented evidence showing that its predecessor received varying scores across

zones in the 2019 CHC procurement, which supports the expectation that zone-

specific evaluations should yield variations in results. See R.R. at 507a, 514a, 521a.

Remarkably, DHS has not articulated any explanation for the

uniformity in scoring. Relying entirely on the McCoy Declarations, DHS sidesteps

17

the issue and maintains that each zone was evaluated independently and that the

evaluation workbooks and instructions were structured accordingly. According to

the McCoy Declaration, “[t]he Evaluation Workbook contained specific scoring

sections for each individual zone and did not contain a section for scoring on a

statewide level.” R.R. at 298a. “[DHS] separately reviewed and evaluated each

applicant’s application for each CHC zone.” Id.; see id. at 28a; First Determination,

at 7, ¶24. Further,

[a]t the conclusion of the group scoring meeting, each

evaluator provided me with his or her completed

evaluation workbook. Every member of the evaluation

committee provided an individual score by zone for each

established evaluation criterion. There were no members

of the Evaluation Committee that submitted a single score

applicable to all zones. The individual scores for each

evaluation criterion within each zone were tallied to arrive

at the overall score for each zone.

R.R. at 298a.

The McCoy Declarations offer only conclusory assertions that each

zone was evaluated separately but are devoid of any explanation for how the

applications were scored by zone and why the scores produced were identical across

all five zones for all seven applicants. In addition to the McCoy Declarations, DHS

produced the August 21, 2024 non-selection letter, which merely showed the

selection results, and the Recommendation Memo, which showed final scores and

no other evaluation data. See R.R. at 20a-21a, 308a-315a. None of these documents

provide a rational connection between the identical scores and zone-by-zone

evaluation mandate. While the actual scoring workbooks or evaluator instructions

may have shed light on the anomaly, these documents were never offered by DHS.

18

Designee accepted the statements in the McCoy Declarations that the

evaluations were conducted on a zone-by-zone basis. She chose not to “request and

review such additional documents or information,” 62 Pa. C.S. §1711.1(e), that

would have corroborated these statements or otherwise explained the anomaly.

Designee summarily rejected the anomaly explaining that “no documents, including

the RFA, state that an evaluation of applications by individual zones could not result

in applicants receiving the same evaluation score for different zones.” First

Determination at 19. While true, this explanation offers no rationale for why the

anomaly occurred if the applications were separately evaluated by zones as declared.

Perhaps the zones were graded on a pass/fail basis with no points assigned? Or

perhaps the evaluation committee weighted compliance over qualitative differences?

Whatever the reason may be, DHS has not articulated one. As a reviewing court,

“[w]e may not supply a reasoned basis for the agency’s action that the agency itself

has not given.” Motor Vehicle, 463 U.S. at 43.

Ultimately, Designee relied on the presumption of agency good faith in

denying Highmark’s bid protests. Although DHS is entitled to a presumption of

good faith, this presumption is rebuttable. Highmark’s evidence of the scoring

uniformity contrasted with varied scoring in a similar RFA was sufficient to

overcome the presumption. See Commonwealth v. DiFrancesco, 329 A.2d 204, 208

(Pa. 1974) (quoting Tot v. United States, 319 U.S. 463, 467-68 (1943)) (holding a

“presumption cannot be sustained if there be no rational connection between the fact

proved and the ultimate fact presumed . . . .”); see, e.g., Caddell Construction Co.,

Inc. v. United States, 111 Fed.Cl. 49, 91 (Fed. Cl. 2013) (agency’s unexplained

reversal of a prequalification decision without supporting documentation caused the

19

court to reject the presumption of good faith and demand proof).9 This evidence

calls into question the integrity of the competitive bidding process, highlights a lack

of transparency, and supports an inference of irregularity or noncompliance with the

RFA’s mandatory requirements.

In response, DHS offered only conclusory declarations and failed to

offer a reason or produce the evaluation workbooks or other documentation that

could rationally explain this anomaly. By accepting DHS’s position without

requiring corroborating evidence or explanation, Designee abdicated her oversight

responsibility, abused her discretion, and hindered this Court’s review.

In sum, the Procurement Code does not shield agencies from judicial

review where there has been an abuse of discretion or an arbitrary execution of

duties. See Reading Blue Mountain, 235 A.3d at 458-59. Agencies must provide a

rational basis for their decisions, and unexplained anomalies, particularly those that

defy statistical plausibility, constitute arbitrary and capricious action. See American

Totalisator, 414 A.2d at 1041 (finding judicial intervention warranted where the

Commonwealth failed to follow its own solicitation terms, undermining the benefits

of competitive bidding); see also Cary, 153 A.3d at 1210 (holding that an agency’s

failure to articulate a rational connection between facts and its decision rendered the

action arbitrary and capricious). The identical scoring across all five zones supports

Highmark’s claim that DHS failed to conduct zone-specific evaluations as required

by the RFA. Absent any rational basis for the scoring uniformity, we are constrained

to conclude that DHS’s award selection was arbitrary, capricious, and contrary to

law.

9

Although we are not bound by decisions of lower federal courts, such decisions may be

given persuasive effect. In re Stevenson, 40 A.3d 1212, 1221 (Pa. 2012).

20

IV. Conclusion

Accordingly, we reverse the Designee’s Determinations denying

Highmark’s consolidated bid protests and cancel the award of the RFA.10 See

Section 1711.1(j) of the Procurement Code, 62 Pa. C.S. §1711.1(j).11

MICHAEL H. WOJCIK, Judge

President Judge Cohn Jubelirer did not participate in the decision of this case.

Judge Fizzano Cannon did not participate in the decision of this case.

10

In light of this determination, we do not address the remaining issues.

11

Section 1711.1(j) of the Procurement Code states:

Remedy. -- if the determination is not affirmed, the court may enter

any order authorized by 42 Pa. C.S. §706 (relating to disposition of

appeals), provided that, if the court determines that the solicitation

or award of a contract is contrary to law, then the remedy the court

shall order is limited to canceling the solicitation or award and

declaring void any resulting contract.

62 Pa. C.S. §1711.1(j).

21

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Gateway Health Plan, Inc. : CONSOLIDATED CASES

d/b/a Highmark Wholecare, :

:

Petitioner :

:

v. : No. 147 C.D. 2025

: No. 526 C.D. 2025

Department of Human Services, :

:

Respondent :

ORDER

AND NOW, this 2nd day of April, 2026, the two final determinations of

the Designee for the Secretary of the Pennsylvania Department of Human Services,

dated January 21, 2025, and April 14, 2025, denying Petitioner’s bid protests are

REVERSED, and the award of the Request for Application No. 31-22 is

CANCELLED.

__________________________________

MICHAEL H. WOJCIK, Judge