Kansas warns Aetna to make improvements to networks, billing or lose Medicaid deal

Aetna sign
Aetna is at risk of losing its new Medicaid contract if it doesn't appease Kansas regulators. (Wonderlane/CC BY 2.0)

Kansas’ insurance regulator called on Aetna to make improvements to the administration of Medicaid managed care in the state or risk losing its hefty $1 billion contract.

The notice to Aetna sent on July 24 and released Wednesday comes after months of complaints from the Department of Health and Environment about a litany of problems that include incorrect processing of claims and delays in credentialing providers for the insurer’s network.

Other problems detailed by the state include offering service plans that lack clear timeframes and language. Credentialing for doctors also took more than the required 90 days to complete, according to state documents. The state required Aetna to put together a plan to correct the problems that was due Wednesday.

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Kansas has its own privatized Medicaid managed care program called KanCare. Aetna became an insurer on KanCare this January, and covers about 100,000 members in the state.

RELATED: CVS closes $69B acquisition of Aetna in a 'transformative moment' for the industry

However, it has been a bumpy ride for the insurer since the beginning of this year. The Kansas City Star reported that providers such as the state’s hospital association have struggled with major payment and reimbursement issues for months.

Aetna, a subsidiary of CVS Health, did not return a request for comment as of press time.

KCUR, Kansas' public radio station, reported that provider frustrations peaked at a quarterly meeting Monday for KenCare's oversight committee, in which some said they struggle to receive payment for common procedures, such as frenotomies on newborns, which are performed to ease breastfeeding.

A representative for Aetna at the meeting said the insurer has addressed some of the state's concerns and is working on others. It's "fair" for providers to have expected the company to have these policies in place by now, he said.

KCUR notes that the insurers who previously administered KanCare, Sunflower and UnitedHealthcare, experienced similar blowback.

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