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'We Get It': Aetna Apologizes as Kansas Pushes to Fix Medicaid Problems

Aetna Medicaid CEO Randy Hyun (center) and Regional Vice President Deb Bacon (right) met with Kansas lawmakers in Topeka on Tuesday. (Photo by Stephen Koranda)

Aetna Better Health is struggling to keep its Medicaid contract with KanCare, to the point that state officials found fault with Aetna’s recent plan to improve services.

But Kansas lawmakers had two words this week for the company: Keep trying.

At a two-day hearing, health care providers told lawmakers how Aetna isn’t paying them on time. Aetna executives took responsibility for the shortfalls, which have put the company at risk of losing its contract after the state said it wasn’t in compliance and later rejected a proposal to fix the problems.

“We get it. Talk is cheap,” Randy Hyun, CEO of Aetna’s national Medicaid division, told the panel. “We need to show action. We need to show progress, and we absolutely intend to do that.”

Already, Aetna has replaced its state-level CEO, and told lawmakers that it did the same with another top staffer. 

The company is one of three groups managing patient care the state’s privatized Medicaid program, KanCare, which provides coverage for nearly 400,000 low-income, elderly and disabled people through Medicaid and the Children’s Health Insurance Program, or CHIP. 

“I want to apologize for not living up to the expectations that I’ve had,” Hyun said. “We preach operational excellence, and we certainly have not demonstrated that to you.”

During the hearing, lawmakers heard from industry groups about the challenges of working with Aetna. The Kansas Health Care Association, which represents nursing homes, said health care providers are having trouble getting paid by Aetna for the services performed. One facility owner has more than $800,000 in unpaid claims submitted to Aetna.

Cindy Luxem, the group’s CEO and president, said she’s worried about facilities burning through reserves while waiting for the reimbursements.

“Maybe Aetna needs to lay out the money and go back and reimburse at some other point,” she said, “because this isn’t a system that’s working right now.”

The Kansas Hospital Association said some clinics have had trouble signing up with Aetna in the first place to become in-network health care providers. That means the facilities have to get prior approval before providing patients health care.

“We are concerned that access to patient care will be hampered until these network issues are resolved,” said Tish Hollingsworth, vice president of reimbursement for the KHA.

Kansas regulators told Aetna last month that it was out of compliance with its state contract and was at risk of being effectively fired by the state. Aetna’s  corrective action plan, delivered Aug. 6, didn’t receive a warm response.

“Quite frankly, we were not satisfied,” Kansas Medicaid Director Adam Proffitt said. “It lacked the necessary detail to show that they were going to get back into compliance.”

The state is reviewing Aetna’s latest proposal this week. Proffitt said it would be a big disruption to cancel Aetna’s contract, as about 100,000 people would have to be shifted to the two other Medicaid contractors. But that doesn’t mean the state will go easy on Aetna. Proffitt wants a quick resolution

“We’re not going to fix the problems for them,” Proffitt said in an interview. “We’re going to provide the support necessary from the state for them to fix the problems.”

Republican Rep. Susan Concannon pointed to the staff shakeup and said she was glad to see the company responding. But, she said, Aetna should have looked at troubles the other managed-care organizations had when the state’s privatized Medicaid program launched in 2013, and “learned from the issues.”

State lawmakers said they’ll keep a close eye on Aetna as the company works to fix problems.

“It’s important that we follow up and make sure the law is being followed and that people get paid and get the care they need,” Democratic Sen. Barbara Bollier said. “If that isn’t being adequately met, then we need to make changes.”

Aetna confirmed during the hearings that David Livingston would replace Keith Wisdom as CEO of the Kansas operation. A LinkedIn profile shows Livingston previously worked for the company on Medicaid in Illinois. Mark Grippi is taking over as acting COO, and previously worked for Aetna in Louisiana.

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