By Anna Kaminski, Kansas Reflector
TOPEKA — Before Kansas officials revealed they had ousted Aetna Better Health as one of the providers for the state’s $4 billion Medicaid program, they destroyed documents that Aetna believes would have helped the company appeal the decision.
Aetna filed two lawsuits against the state that now await decisions ahead of an Oct. 2 deadline, by which the company must notify its beneficiaries that it will no longer provide coverage. Aetna’s attorney, Marc Kessler, encouraged Shawnee County District Judge Thomas Luedke at a hearing Tuesday to take his time in making a decision on the case, while the state’s attorney, Anthony Rupp, urged expeditious action.
“The timing is so critical here,” said Rupp.
Aetna is interested in remaining a Medicaid insurance provider in Kansas while the lawsuits are hashed out, which another provider’s attorney said would be “inviting chaos.”
The state announced in May that it selected three private companies other than Aetna to provide coverage under KanCare, as Medicaid is known in Kansas, beginning in January. Aetna had tied for third with Healthy Blue, which led to Aetna filing two lawsuits in Shawnee County District Court.
One, filed in July against three state departments, challenges the decision by Todd Herman, director of procurement and contracts in the Department of Administration, that denied Aetna’s appeal. The other, filed before the appeal was denied in June, challenges the same three departments and the governor’s office for records initially withheld from Aetna.
The state admits some of the documents the company requested were destroyed in March, which was before the decisions were announced and before Aetna submitted a request under the Kansas Open Records Act, according to court documents.
The destroyed records were the individual scoring notes that helped inform agency staff evaluations of each insurance provider. Judge Luedke likened them to jury notes, which are typically destroyed after a decision, like a trial verdict, has been made.
In court documents, the state called Aetna’s interest in obtaining the individual evaluation notes “a pure fishing expedition.”
But Aetna argued those notes were part of the decision-making process and should’ve been kept.
“They would’ve assisted us and pushed us over the line,” Kessler said.
At an Aug. 27 meeting of the KanCare oversight committee, legislators were concerned about the implications associated with the destruction of the scoring notes, using the words “disturbing” and “disappointing.” Jane Brown, Aetna president and CEO, asked the committee members to consider crafting rules to prevent future destruction of records and what she called “cherry-picking” and “arbitrary” decision making.
Sen. Renee Erickson, R-Wichita, said at the hearing Kansas’ executive branch “dropped the ball” during the award process.
“I don’t know how we legislate leadership and who should be held accountable for the lack of transparency in this process,” Erickson said.
Rep. Will Carpenter, R-El Dorado, said this procurement process will be “a stain” on Kansas’ contract processes “for years to come.”
Aetna, which has provided insurance for KanCare users for the past five years, was one of seven bidders. The winning companies — Healthy Blue, which is affiliated with Blue Cross and Blue Shield of Kansas, and incumbents Sunflower State Health Plan and United Healthcare of the Midwest — all urged the judge to reject Aetna’s lawsuit.
Kessler said a lack of substantial evidence backing Aetna’s ousting amounts to an arbitrary and capricious decision. But Rupp said the record is “replete” with references to unresolved issues with Aetna in Kansas and other states.
Aetna apologized to Kansas lawmakers in 2019 for failing to abide by its $1 billion contract, which stemmed from data errors, payment issues and a provider credentialing backlog, The Topeka Capital-Journal reported.
Kansas’ Medicaid system was privatized in 2013 under Republican Gov. Sam Brownback. This year’s bidding process is the third in state history and the first under a Democratic governor. The most recent shuffle took place in 2018 under Republican Gov. Jeff Colyer. The Republican-led Legislature blocked Gov. Laura Kelly’s administration in 2022 from selecting new contracts, operating on a hope that Republican Derek Schmidt would defeat Kelly in that year’s election.
Launched in July 2020, Kansas Reflector is an affiliate of States Newsroom, the nation’s largest state-focused nonprofit news organization, supported by grants and donations. Kansas Reflector retains full editorial independence.
