TOPEKA ― State officials have told one of the key players in Kansas’ privatized Medicaid system that it stands in danger of getting fired for not living up to its contract.
Aetna Better Health has until Wednesday to tell state officials how it is addressing chronic complaints about delayed payments to hospitals and other problems.
A formal letter from the state to Aetna says failure to fix the problems so far means the company’s contract “is in jeopardy of being terminated for cause.”
The letter said that if Aetna didn’t solve the problems by Wednesday, the state “may seek any and all remedies available under the contract.”
Read the state’s letter to Aetna. Read the state’s list of 11 specific compliance concerns.
Aetna insures about 100,000 Kansans on Medicaid.
Complaints about Aetna’s performance piled up for months and boiled over Monday at a quarterly meeting in Topeka of a committee that monitors the state’s privatized Medicaid system called KanCare.
Representatives for hospitals and doctors’ offices said Aetna doesn’t reimburse correctly, or sometimes at all. They said their billing workers feel stuck in a purgatory of paperwork, spreadsheets and phone calls, unable to reach the right people at Aetna to correct errors and pay out missing funds.
Aetna hasn’t even put together a complete and accessible directory of physicians and specialists that it covers, providers complained. The company’s contract began at the start of this year.
“Why has it taken you this long to get geared up?” said Sabetha Community Hospital CEO Lora Key. “To get a physician directory correct? To get us paid correctly?”
An Aetna representative apologized repeatedly, saying his company had fixed some problems and was nearing solutions on others.
“I understand your frustration,” Keith Wisdom said. “It’s fair to expect us to be further along at this point.”
Wisdom said medical experts help set Aetna’s reimbursement policies. That drew incredulity from those who count on the company for reimbursement.
“You’re telling me you have a medical director who oversees and approves all this? … It befuddles me,” said Wichita pediatrician Rebecca Reddy. “It’s silly. And that it takes that long to resolve is disrespectful.”
Reddy said doctors sometimes can’t get paid by Aetna even for common and necessary procedures, such as frenotomies on newborns. A frenotomy involves removing a tissue under the tongue when it hinders a baby from breastfeeding.
She said Aetna demands that providers first get approval from Aetna, but that can take weeks for a procedure that should happen swiftly. She questioned why doctors haven’t run into the same problems with Aetna’s commercial insurance — only its Medicaid arm called Aetna Better Health.
“Your name is ‘Aetna,’” Reddy said. “So I expect that you have processes in place. And then you act like this is a whole new puppy that has to be trained … when clearly you have other functioning systems around the nation.”
“My apologies for your frustration,” Wisdom replied. “There’s obviously thousands of (billing) codes.”
He said Aetna has reviewed concerns about its pre-approval requirements and will remove certain basic procedures from the list.
Kansas fully privatized its Medicaid system in 2013, dividing it among three private companies. The program mostly serves low-income children, but also parents, pregnant women, people with disabilities and seniors in long-term care.
Last year the administration of then-Gov. Jeff Colyer booted one of the three insurers, Amerigroup and tapped Aetna instead. Amerigroup sued the state unsuccessfully over the bidding process in an effort to keep its contract.
Aetna’s contract began at the start of this year. The other two Medicaid companies — Sunflower and UnitedHealthcare — faced complaints in the past similar to those now faced by Aetna.
On July 24, after months of complaints about Aetna, Kansas health officials sent a notice of non-compliance to the company.
In an emailed statement, the Kansas Department of Health and Environment said Tuesday that the non-compliance letter concerns “failure to meet contract performance standards.”
The Kansas Department of Health and Environment gave Aetna 10 business days to file a roadmap for fixing the situation.
“We must hold our contractors accountable,” the state agency said. “It is our hope to work collaboratively with Aetna to come into compliance.”
Aetna did not discuss the non-compliance letter at Monday’s meeting, and Wisdom declined to answer questions from a reporter after the meeting. The company hasn’t answered additional interview requests sent to the company on Tuesday.
Celia Llopis-Jepsen reports on consumer health and education for the Kansas News Service. You can follow her on Twitter @Celia_LJ or email her at celia (at) kcur (dot) org. The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on the health and well-being of Kansans, their communities and civic life.
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