Aetna Protests Medicaid Contracting Process; Gets Court Restraining Order

The Franklin County Common Pleas Court has granted Aetna Better Health Inc. a temporary restraining order, halting Ohio Medicaid from moving forward with its managed care contracting program until the insurer has an opportunity to protest the agency's decision to cancel its previous contract. In the meantime, seven additional health insurers have petitioned the Court to  join the legal challenge as interested parties.  

Aetna’s protest charges that Ohio Department of Job and Family Services (ODJFS) retroactively changed definitions of certain requirements outlined in its Request for Application (RFA), after the submissions were made. Aetna further alleges these changes contributed to the state’s "flawed determination" that Aetna  did not deserve credit for its experience in fully managing Medicaid plans in other states. Aetna claims it provided substantial evidence demonstrating the accuracy and strength of its response to the RFA, but ODJFS did not  factor the information into the amended contract awards.

In addition, Aetna alleges ODJFS representatives had  undisclosed communications with another bidder after the initial protest period had closed. Aetna claims the other bidder made a number of false and misleading statements about Aetna’s Medicaid managed care experience, and  Aetna was not provided with an opportunity to respond, which is in violation of the terms of the RFA and state law. 

“It's extraordinary for a state to introduce a new definition or standards after responses have been submitted, much less after awards have been made," said Jan Stallmeyer, senior vice president, Central Region, for Aetna Medicaid. "The hallmark of the Aetna Medicaid approach is to develop innovative partnerships designed to serve the members better. We appear to have been penalized and discredited for our successful approach to collaboration.”

According to the Ohio Department of Job and Family Services, about $5.1 billion in state and federal money was paid to all the Medicaid managed care plans operating in Ohio during the fiscal year that ended June 30, 2011, The state announced plans earlier this year to reduce the number of Medicaid regions, limit the number of qualified managed care plans, and require plans to compete statewide as part of a package designed to save $1.5 billion beinially.

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