Aetna Health Plans and Coventry Health Care denied billions by Louisiana Department of Health « Health Insurance Advisory

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Aetna Health Plans and Coventry Health Care denied billions by Louisiana Department of Health

Aetna Health Plans and Coventry Health Care Inc. challenge decision by the Louisiana Department of Health and Hospitals to deny their subsidiaries a share of a $2.2 billion Medicaid privatization program, according to the

Both Aetna and Coventry Health Care of Louisiana Inc. say that Gov. Bobby Jindal’s administration did not follow its own rules in scoring 10 firms’ proposals for managed-care networks that will serve more than two-thirds of Louisiana’s 1.2 million Medicaid recipients.

The firms also are disputing the state health agency’s decision not to release all of its scoring documentation and the winning proposals from three firms: Louisiana Healthcare Connections Inc., a subsidiary of Centene; Amerihealth Mercy of Louisiana Inc.; and AmeriGROUP Louisiana Inc.

Health Secretary Bruce Greenstein has tapped those firms to run “pre-paid coordinated care networks.” That model calls for the state to pay the networks a monthly fee for each of its Medicaid enrollees. The firm then is responsible for managing the care of its patients, approving services and paying providers within the network.

Among other complaints, Aetna argued that state analysts unfairly compared the applying firms’ proposals to each other rather than simply evaluating them based on the request for proposals.

The secretary has 10 days to respond to the Aetna and Coventry protests.

Greenstein also has announced two firms, UnitedHealth of Louisiana Inc. and Community Health Solutions of America Inc., will operate as “shared savings” networks. Under this model, the state will continue to pay providers on a per-service basis, but the networks would be responsible for coordinating a patient’s health treatment among primary-care physicians, specialty physicians and other service providers. The network’s profit would be a management fee that is a portion of what the state calculates is saved through a reduction in unnecessary diagnostic tests, hospitalizations or other treatment.

The secretary already has rejected a protest from Louisiana Physicians Connections, which asserted that unfair scoring practices cost it an opportunity for a shared-savings contract.

The winning firms still must be cleared by federal authorities before the state can launch the new system next year.

Each of the networks will operate statewide, with Medicaid recipients choosing which network to join or being assigned a network. As with an open-market private insurer, the Medicaid recipient will receive an insurance card and receive care within the network of providers established by the firm that contracts with the state. The initial contracts will be for three years.

Jindal bills his signature health care initiative as a way to save more than $135 million annually out of the $6.7 billion program that is financed mostly by the federal treasury.

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