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Aetna, three others appeal long-term care loss in Pennsylvania

Company tried to block managed-care rollout in Iowa last year

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By Harold Brubaker, Philadelphia Inquirer

PHILADELPHIA — Four losing bidders have protested the Pennsylvania Department of Human Services’s award last month of three-year contracts to manage long-term care for Medicaid beneficiaries, the agency said Monday.

Pennsylvania’s Community HealthChoices represents a major overhaul of how the state pays for nursing home stays, home care and other supports for the elderly and the physically disabled older than 21. The affected population totals about 420,000, including 120,000-130,000 seniors.

The statewide contracts, worth an estimated $5.4 billion in annual revenue, went to AmeriHealth Caritas, a majority-owned subsidiary of Independence Blue Cross; Pennsylvania Health and Wellness, a unit of publicly traded Centene Corp.; and UPMC for You, which is owned by the University of Pittsburgh Medical Center.

AmeriHealth is one of three managed-care organizations that oversees Iowa’s Medicaid program.

The companies that filed bid protests include units of three publicly traded companies were Aetna Better Health; Molina Healthcare of Pennsylvania; and WellCare of Pennsylvania. The fourth, Gateway Health Plan, is a joint venture of two tax-exempt organizations, Highmark Inc. and Mercy Health System of Southeastern Pennsylvania.

Aetna was passed over for a managed-care contract in Iowa, and later unsuccessfully sought a stay of managed-care implementation.

Health Partners Plans Inc., a tax-exempt managed care company based in Philadelphia, said it was waiting for its debriefing by state officials before deciding whether to protest its loss.

Contract negotiations with the winners have been stayed because of the protests. That could delay the program, Communty HealthChoices, which was scheduled to start July 1, 2017, in Pittsburgh and surrounding southwestern Pennsylvania counties.

The state chose the winners from 14 bidders, though not all were vying to serve the entire state.

It is not unusual for losing bidders to protest the award of lucrative managed Medicaid contracts. AmeriHealth Caritas, which is partly owned by Blue Cross Blue Shield of Michigan, for example, recently has protested losses in Nebraska and Georgia.

Aetna protested Pennsylvania’s awards this year for the acute-care side of Medicaid, leading the state to rebid the contract.

Aetna, which also lost business in Nebraska, won a contract for only one of Pennsylvania’s five zones. It currently has business statewide, though it has a relatively small marketshare in each of the zones.

Asked about the losses last week at an investor conference, Aetna’s chief financial officer, Shawn M. Curtin, said it is hard to explain them.

“There’s clearly something in the procurement process, or the telling of our story, that we need to do better because I do think we have a track record,” he said.

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