Gov. Laura Kelly’s administration has sent a formal letter to the newest KanCare insurance company, Aetna, warning that it’s not living up to the terms of its contract.
Aetna took over for Amerigroup this year as one of the administrators of Kansas’ privatized Medicaid system, joining existing KanCare companies Sunflower State Health Plan and United Healthcare.
The transition has been rocky, and after six months of complaints from medical providers, the Kansas Department of Health and Environment told Aetna officials they have 10 days to figure out how to get their act together.
“As an agency working to improve the health of all Kansans, we must hold our contractors accountable,” KDHE spokeswoman Ashley Jones-Wisner said in an email. “It is our hope to work collaboratively with Aetna to come into compliance, so they can efficiently and effectively serve members.”
Aetna officials did not immediately respond to a request for comment Tuesday.
A company spokeswoman released the following statement on Thursday: “Aetna Better Health of Kansas is dedicated to serving KanCare members through a contract with the state of Kansas. We are cooperatively working with providers and other stakeholders and taking accountability to continually improve our operations and resolve areas of concern. Aetna Better Health of Kansas successfully facilitates our members care and health improvement on a daily basis, and is fully committed to a successful long-term partnership with KanCare stakeholders.”
KDHE officials confirmed that Aetna had submitted a correction plan and said they were reviewing it.
The non-compliance letter, dated July 24, says Aetna is in jeopardy of losing its KanCare contract, which is worth roughly $1 billion a year in state and federal funds.
An attachment to the letter outlines a laundry list of concerns, including vague service plans for Medicaid recipients, tardiness in credentialing medical providers for billing and myriad problems with claims.
None of it comes as a surprise to the Kansas Hospital Association, which has fielded complaints about Aetna from members for months.
“We’ve been reaching a point of a little bit of concern because we’re now in their eighth month in the program and still struggling with a significant number of claims issues (and) claims payment,” said Tish Hollingsworth, the association’s vice president for reimbursement. “They are struggling a little bit.”
Hollingsworth said some struggles are to be expected with a new contractor, and Sunflower State (a division of Centene) and United Healthcare also had issues when then-Gov. Sam Brownback privatized the state’s Medicaid program in 2013.
Rep. Susan Concannon, a Beloit Republican who sits on the Legislature’s KanCare Oversight Committee, said she has heard the complaints.
“I didn’t know it was statewide,” Concannon said. “I’m glad the administration or the agency recognized there’s an issue and acted on it before the oversight committee.”
So far Aetna has been slow to address the problems.
“We’re meeting with them quite frequently,” Hollingsworth said. “The people are very nice, very willing to sit down and talk to us, but even though it’s a national company that has done Medicaid in other states, it’s the same thing we went through in Round 1: getting used to Kansas Medicaid.”
Still, the administration’s action came as a surprise to some legislators.
Sen. Ed Berger, a Hutchinson Republican who also sits on the oversight committee, said he had not been approached with any concerns about Aetna.
“They might come this way, but to this point they have not,” Berger said.
A search of an online database of unresolved claims issues showed that Aetna had 28 systemic problems reported since January, compared to four for Sunflower State and one for United Healthcare.
The providers affected by the issues include hospitals, doctors, pharmacies and those who provide support services for people with disabilities.
The transition from Amerigroup to Aetna was fraught with tension even before it began. Amerigroup protested the loss of its KanCare contract last year and eventually took the state to court, trying to force then-Gov. Jeff Colyer’s administration to redo the bidding process.
The case, which saw dozens of lawyers cram into a small courtroom in Topeka, wasn’t resolved until mid-October, leaving Aetna with a little more than two months to form provider networks and gear up to cover more than 100,000 Kansans.
In Kansas, Medicaid covers about 400,000 people total. Nearly all of them are children, the elderly and frail, disabled people and pregnant women.
Since taking office in January, Kelly has consistently said the state needs to take a much harder line on contractors that don’t live up to the terms of their agreements.
“We’re intent on making sure KanCare provides the services Kansans need and deserve. KDHE has been working with Aetna to ensure that its performance meets the standards required under the contract,” Kelly said in a statement Tuesday.
Her first budget called for the state to take back many of the duties of another contractor subject to years of complaints for mishandling Medicaid applications. Her administration has also said that if the state’s prison health care contractor, Corizon, doesn’t improve its performance, Kansas will sever ties with it and re-bid the contract next year.