TOPEKA — A Shawnee County judge rejected a lawsuit from Aetna Better Health of Kansas, which sued the state earlier this year after it was passed over as one of Kansas’ three Medicaid insurance providers.
In a 50-page decision, Shawnee County District Judge Thomas Luedke upheld the decision by Todd Herman, director of procurement and contracts in the Department of Administration, not to renew the contract for Medicaid services that Aetna has provided for the past five years.
The state announced in May that it selected three private companies, excluding Aetna, from seven bidders to provide coverage under KanCare, as Medicaid is known in Kansas, beginning in January. In the state’s evaluation process, Aetna had tied for third with Healthy Blue. State officials destroyed documentation of scoring notes that were used by evaluators to inform their selection of Healthy Blue, a Blue Cross Blue Shield affiliate, over Aetna.
In response, Aetna filed two lawsuits in Shawnee County District Court. One, filed in July and decided Oct. 1, challenged the decision itself. Another, filed in June, was an effort to challenge the state’s destruction of documents and awaits a ruling. The judge’s Oct. 1 decision came a day before the deadline for Aetna to notify its beneficiaries that it will no longer be a provider under KanCare.
Luedke wrote that the scoring process that evaluated each provider bidding for a multimillion dollar KanCare contract is “highly technical.”
“The Court is reluctant, and for the most part unable, to substitute its untutored judgment for that of the scoring officials,” Luedke wrote in his decision. “Nothing in Director Herman’s consideration of this issue was unreasonable, arbitrary or capricious.”
At a Sept. 17 hearing, Luedke likened the scoring notes to jury notes, which are commonly destroyed after a verdict is issued.
Court documents show Aetna beat out Healthy Blue in two evaluation areas, integrated whole person care and quality assurance, but the two had even scores overall. However, Healthy Blue topped Aetna in the remaining five categories. Handwritten notes showed decision-makers had concerns about Aetna’s “unresolved issues” in Kansas and other Medicaid states. But concerns were noted about Healthy Blue, too, including one that said it was “discouraging to see lack of initiative” from Healthy Blue.
The state signed contracts May 10 with Healthy Blue, United Healthcare and Sunflower Health Plan. Aetna then protested the decision, alleging the state used unstated and objective evaluation criteria, cherry-picked the criteria to break the tie between Aetna and Healthy Blue and ignored Healthy Blue’s alleged conflicts of interest.
“The State’s method of evaluating these scores was well within the scope of its expertise and discretion,” Luedke wrote. “The way the review was conducted should have been no surprised (sic) to any of the bidders.”
