‘Incredibly disappointed’: Aetna objects after being left out of new Kansas Medicaid contracts

TOPEKA — A week after the state announced new contracts for the state’s privatized Medicaid program, a health care insurance company says it plans to protest its failed bid.

Kansas health officials on May 14 announced the three managed care organizations to administer KanCare, the state’s version of the federal Medicaid program. Incumbents Sunflower Health Plan and United Healthcare Community Plan had their bids accepted for a new contracting cycle, but Aetna was replaced with a new organization, Healthy Blue.

Becky Austin-Morris, behavioral health director for Aetna Better Health of Kansas, said during a Wednesday meeting of the Kansas Mental Health Coalition that the company will protest the decision.

“We’re incredibly disappointed. … It’s been a very pleasant, however very heavy, lift in Kansas,” Austin-Morris said. “It’s been good. We did not expect this outcome.” 

Bids for these contracts opened in October 2023, marking the first time the selection process had been conducted in six years. The three current KanCare contracts expire Dec. 31, 2024. The new contracts will last from Jan. 1, 2025, to Dec. 31, 2027.

KanCare provides health care services to low-income families, including thousands of elderly Kansans; low-income children; and people with developmental, intellectual or physical disabilities. KanCare serves 458,000 Kansans, according to the Kansas Department of Health and Environment. 

“We are hoping to stay as an MCO in Kansas ultimately, and continue our good work in trying to expand behavioral health, mental health services in Kansas,” Austin-Morris said. “… It’s very emotional for all of us.”

Aetna Better Health of Kansas had a history of complaints, including a lack of transparency over health provider coverage and mistakes with pay. In 2019, Aetna officials appeared before the Legislature to apologize after the state sent a notice of noncompliance over the organization’s failure to abide by its contract, according to a Topeka Capital-Journal report. 

This round of bids attracted seven candidates: Aetna, CareSource, Healthy Blue, Moline Healthcare of Kansas, Sunflower State Health Plan, UCare of Kansas and United Healthcare of the Midwest. No protests have been posted on the KanCare page yet, and it is unclear whether any other failed bidders plan to protest. Bidders that want to protest have 30 days after the contract  is awarded to file. 

The KDHE Office of Communications didn’t immediately respond to a Kansas Reflector inquiry about the MCO process and Aetna’s protest. 

“There were so many things that seem to be on hold, as if the MCOs were holding their breath for the last couple of months,” said Amy Campbell, lobbyist and coordinator for KMHC. “Hopefully with this announcement being out, we’ll be getting back to more business as usual and filling positions and that kind of thing going forward.”

The contract announcement comes as the state finishes its large-scale Medicaid review process. During the COVID-19 pandemic, federal “continuous coverage” provisions meant Medicaid administrators couldn’t end health care eligibility unless the person in question moved away, died or asked to end coverage. With this protection in place, participation in KanCare increased from 410,000 to 540,000 people during the pandemic.

The nationwide process of determining Medicaid eligibility restarted in April 2023, after federal protections ended. 

KDHE officials oversaw a rocky beginning to unwinding, with Kansans unnecessarily losing eligibility because of administrative issues, such as slow mail delivery and a lack of clear communication from the state about what was needed for renewal.

The most recent data shows 318,791 people have been approved, with 75,532 people discontinued from services. Another 75,420 Kansans will need to reapply because they missed the reinstatement window.

Of the Kansans discontinued from services, 3,151 were 65 or older. The state’s data collection shows 10,351 children aged 4 and under were also removed.