Public Payers News

LA Managed Care Organizations File Protest For Alleged Bias

Louisiana HealthCare Connections and Aetna Better Health state that conflicts of interest and other factors led to the loss of their Medicaid managed care organization contract.

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Source: Thinkstock

By Kelsey Waddill

- Louisiana Healthcare Connections (LHCC), whose parent firm is Centene, and Aetna have filed protests against Louisiana’s Medicaid managed care contract awards, The Advocate reported.

“Our preference, of course, would have been to avoid taking this step, but we were left little choice,” said LHCC CEO Jamie Schlottman in a press release by LHCC. “Major flaws in the RFP process – including a disregard for fairness among members of the evaluation committee and a failure to put appropriate safeguards in place to ensure the  integrity of the process – threaten to disrupt hundreds of thousands of people’s access to their health plan and providers, as well as the livelihood of our 670 Louisiana employees. We all wish the RFP evaluation had been fair and unbiased from the start.”

MCOs are widely used among state Medicaid programs. Over two-thirds of Medicaid beneficiaries are in a managed care organization, according to the Kaiser Family Foundation (KFF). In 2018, Louisiana had over 1.7 million enrollees in their Medicaid MCOs, the Louisiana Department of Health’s website says. LHCC and Aetna Better Health together serve over 500,000 of those members.

LHCC insures more than 445,000 Medicaid beneficiaries. In addition to covering 31 percent of Louisiana’s Medicaid population, the company also offers the largest provider network in the state. With such a presence, the effects of the contract change, whether positive or negative, will be noticeable.

In its protest, the payer cited conflicts of interest, inconsistent scoring, and potentially the destruction of public records as the basis for their protest. The payer noted that two members on the evaluation scoring committee that rejected their contract were also engaged in settling a health policy dispute with LHCC.

The protest counts 20 examples that they consider inconsistencies in the scoring, resulting in a 114 to 202 point reduction on their final score. The payer believes that the committee not only wrongly scored LHCC but also intentionally ignored flaws in their competitors’ proposals.

In the company’s press release, LHCC CEO Jamie Schlottman urged members to continue accessing healthcare through LHCC while the litigation continued.

For Aetna Better Health, this is not the first time the company has challenged a Louisiana Health Department Medicaid MCO contract. The payer filed a protest in 2011 when the state awarded its largest contracts in Louisiana’s prior history. However, in this case, it was the size of the award, not the entirety of the contract, that was at stake.

Aside from potential ethical violations, lawmakers, providers, and payers are voicing concerns about the process of shifting over 500,000 members into alternate plans in the span of about two months.

Health Secretary Rebekah Gee maintained in a hearing with the Joint Legislative Committee on the Budget that the state’s Medicaid beneficiaries would not lose access to care.

“There’s not going to be an issue where people have no doctors,” Gee testified.

But some lawmakers are not as optimistic.

“It is unlikely that a new MCO will be able to duplicate LHCC's provider network, resulting in many of these constituents losing their current providers,” Congressman Cedric Richmond (D-LA) wrote to Louisiana Governor John Bel Edwards, quoted in LHCC’s press release. “Further, in light of the Department of Health’s reoccurring technology issues, it seems likely that migrating all patients from the largest MCO to other MCOs will result in at least some of these patients falling through the cracks for a time.”

“The award of these new contracts will not affect the Medicaid eligibility of any member,” the Louisiana Department of Health’s announcement assured. “However, members may need to choose a new health plan if their current health plan is not awarded a new Medicaid contract.”

The state’s department of health said that Medicaid’s managed care enrollment for 2020 would open in October 2019 and end on November 30, 2019. The current year’s contracts—including LHCC’s and Aetna’s—will conclude December 31, 2019.

However, the department noted that this timeline may alter based on the protest.

The new contracts are not the only developments that have occurred in Louisiana’s Medicaid system in recent months, but they are by far the most controversial due to the number of members who will be affected.