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Centene, Aetna protest losing Louisiana MCO contracts worth billions

The Centene subsidiary, Aetna and three other MCOs were paid $7.6 billion by Medicaid to cover more than 1.7 million beneficiaries.

Susan Morse, Senior Editor

Aetna and Centene, two insurers on the losing side for bids for Louisiana's Medicaid managed care contracts, have protested the state's decision, saying the process was flawed and biased.

Centene, as Louisiana Healthcare Connections, and Aetna were among five Medicaid MCOs paid $7.6 billion by Medicaid during fiscal year 2018 to cover more than 1.7 million enrollees, according to the Louisiana Department of Health.

Louisiana Healthcare Connections is reportedly the largest MCO in the state.

The current contracts, which expire December 31, also include United Healthcare Community Plan, AmeriHealth Caritas and Healthy Blue.

The Louisiana Department of Health announced earlier this month it will contract with only four Medicaid MCOs: AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana (Healthy Blue), Humana Health Benefit Plan of Louisiana and United Healthcare Community Plan.

The new contracts begin on January 1, 2020.

WHY THIS MATTERS

The contracts are worth billions of dollars. Aetna says it is appealing the decision.

"On August 5, the Louisiana Department of Health announced that Aetna Better Health of Louisiana would not be awarded a contract for the 2020 Healthy Louisiana Medicaid program. We are disappointed with the decision given the strength of our bid and the work we currently do to support 120,000 Medicaid members across the state through our Aetna Better Health of Louisiana plan. After careful evaluation of competitor applications and scoring results, we filed a protest letter with LDH to appeal the decision," Aetna said by statement.

The participating managed care organizations are paid a monthly fee based on a per-member-per-month basis. Most Medicaid enrollees receive their healthcare through the managed care delivery model, with the exception of long-term supports and services.

The protests claim improper bias, conflict of interest and inconsistency in scoring methods for bids, among other claims, including an objection to Humana getting the bid.

THE LARGER TREND

The state bid process began in February with a request for proposals.

The Office of State Procurement will rule on the protests and the rulings can be appealed to the Commissioner of Administration, then to the courts, a process that could take months, according to The Advocate.

State lawmakers and U.S. Rep. Cedric Richmond question the bid decision and whether the new companies will be able to absorb the more than 550,000 enrollees from the Louisiana Healthcare Connections network and Aetna, the report said.

The news comes as Centene Corporation announced this month that it is expanding its footprint in the Affordable Care Act marketplace for 2020 in Arizona, Florida, Georgia, Kansas, North Carolina, Ohio, South Carolina, Tennessee, Texas and Washington.

Last year marked another year of successful operations on the exchanges, the company said. As of June 30, Centene served approximately 1.9 million exchange members across 20 states.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com