Aetna challenges exclusion from Oklahoma’s new Medicaid managed-care program


Aetna Better Health of Oklahoma has filed a protest against the state’s healthcare agency, alleging the group’s “fatally flawed” process for awarding contracts for its $2.1 billion Medicaid managed-care system lacked legal authority and violated open records laws.

The Hartford, Conn.-based insurer’s protest comes just weeks after the state’s medical agency filed an injunction to the Oklahoma Supreme Court that aims to stop the privatization of the service for low-income residents.

The Oklahoma Health Care Authority, which declined to comment, announced in late January that it awarded Medicaid managed-care contracts to UnitedHealthcare, Blue Cross and Blue Shield of Oklahoma, Humana Healthy Horizons and Oklahoma Complete Health, a subsidiary of Centene Corp.

Come Oct. 1, the state’s new Medicaid managed-care program, named SoonerSelect, will cover the 903,000 currently eligible lower-income adults, Temporary Assistance for Needy Families and Children’s Health Insurance Program enrollees. In July, another 200,000 beneficiaries will become eligible for the program under the state’s recently expanded Medicaid system.

Aetna was one of seven insurers that responded to the state’s request for proposals and was not awarded a contract. The insurer is calling for the privatization of Oklahoma’s Medicaid system to be paused until its protest is resolved.

“Because it was not awarded a contract, Aetna is in the awkward position of having to point out flaws in the bid review process that necessitates corrective action by the OHCA to include Aetna in the contract award or void the contract award and starting over,” the protest filed on Feb. 12 reads.

Aetna claims that Oklahoma Health Care Authority officials used a subjective system for measuring the worthiness of proposals submitted, which led to a statistically insignificant difference between Aetna and the insurers chosen to manage Oklahoma’s Medicaid system. Aetna added that state officials did not follow the subjective process’s requirements for reviewing applications and were told by a senior evaluation consultant that “much of this supporting documentation you do NOT have to review.”

“It is unfair and completely inappropriate in a competitive bidding situation to demand information from bidders, permit such information to be included in attachments and supporting documentation and then instruct evaluators not to consider such attachments,” the protest reads.

The insurer claims the rush to review bids led evaluators to overlook the role of pharmacy benefits completely and “adversely impacted” Aetna’s proposal. Additionally, the company claims that the state health agency sidestepped legal requirements for public disclosure and contract approval. The agency’s CEO lacked the authority to award the contracts, Aetna said.

The insurer is not the only organization that takes issue with how these contracts were doled out.

Earlier this month, the Oklahoma State Medical Association filed an injunction over the Medicaid managed-care system, alleging that the state Health Care Authority did not have legislative approval to contract private insurers to administer this coverage. The group also believes that privatizing its managed-care contracts will lead to higher administrative costs and create a care access crisis for patients.

The Oklahoma Health Care Authority has said that it believes it has the authority to approve the new Medicaid managed-care contracts. The group believes that privatizing the process will add more predictability to the state’s healthcare costs and new services for Medicaid patients.



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