By Nathalie Tadena
An Ohio court has granted Aetna Inc.'s (AET) request to
temporarily stop the state from moving forward with its Medicaid
contract process, as the insurer protests an Ohio agency's decision
to cancel an earlier Medicaid contract it was awarded.
The insurer said its request for a temporary restraining order
was granted by the Franklin County Court after the company raised
"significant legal issues" regarding the Ohio Department of Job and
Family Services' decision to arbitrarily change terms of its
Medicaid contract awards.
Aetna said earlier this month it is protesting the agency's
decision, saying undisclosed communication between the state and a
competing company swayed the state's decision. Aetna argued the
agency retroactively changed its initial requirements, resulting in
its decision to drop the insurer from its list of five Medicaid
health plans that will serve the state starting Jan. 1. Meridian
Health Plan, a nonprofit, was also dropped after initially being
named a winner, and the two were replaced with Molina Healthcare
Inc. (MOH) and Centene Corp. (CNC), which both protested their
prior rejection.
"We believe that it is only prudent that ODJFS take the time to
examine the serious questions that have been raised about the
manner in which these contracts were awarded, then re-awarded to
other plans," Jan Stallmeyer, an Aetna senior vice president, said
in a statement.
Aetna said it learned that representatives from the state agency
had undisclosed communications with another bidder after the
initial protest period had closed. Aetna said it didn't have a
chance to respond to "misleading information" the competing company
provided in those conversations, which are a violation of state
law.
The continued fight for Ohio's business also has larger
implications, since incumbency may help companies compete when the
state picks health plans to cover what are known as dual-eligible
patients who also qualify for Medicare, the government program for
the elderly. Ohio hopes to have coordinated coverage plans for
these sought-after, high-cost patients up and running early next
year.
The story was reported earlier Tuesday by the Associated
Press.
Molina shares slipped 4.1% to $20.94 after hours, while Centene
shares were off 1.7% at $29.80 after hours. Aetna shares closed at
$40.68 Tuesday and were unchanged after hours.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com