Aetna out, United Healthcare in at state’s Medicaid program

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Aetna
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Aetna
Aetna

Aetna Medicaid announced that Delaware Physicians Care (DPCI) will not renew its contract to participate in the State of Delaware’s Medicaid and other assistance programs. The operation will shut down on Dec. 31.

The state then  announced that United Healthcare will take Aetna’s place, with negotiations nearing completion with Highmark. Medicaid provides coverage for lower income Delawareans.

“We are pleased that we could reach agreement with United Healthcare and Highmark,” DHSS Secretary Rita Landgraf said. “We are confident that each will bring tremendous service to our Medicaid clients.” Both contracts are for three years.

DHSS was unable to reach agreement on financial terms with Delaware Physicians Care, Inc. (DPCI), and DPCI will no longer be a Medicaid managed care organization after December 31, 2014.

“We are working to help make the transition of DPCI clients to one of the other providers as seamless as possible,” said Landgraf. “I want to assure members that there will be continuity of care, and we will work to transition clients who will leave DPCI.”

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Medicaid Director Steve Groff said the state’s 230,000 Medicaid clients will receive more information in the next several weeks about their options for choosing a new plan that will continue their benefits starting January 1, 2015.

“We appreciate the partnership we have shared with Delaware Physicians Care and the quality services it has provided to members the past 10 years,” Groff said. “We look forward to working with United Healthcare and Highmark on a smooth transition of DPCI clients and to a fruitful and productive working relationship as we serve our fellow Delawareans.”

Aetna issued a release stating that it is  reluctantly taking this action after several months of extended negotiations with the state, which have failed to result in a rate agreement that would cover the costs of operating the plan, according to  Aetna Medicaid President and Chief Executive Officer Pamela Sedmak.

“We regret having to make this very difficult decision,” said Sedmak. “Delaware Physicians Care is an integral part of the fabric of the community, and an award-winning Medicaid plan that recently was recognized as one of the top Medicaid plans in the nation. Our extended, collaborative work with the State has resulted in a 10-year history of affordably providing access to quality care for Delawarean beneficiaries. Unfortunately, recent changes to the Medicaid landscape in Delaware are requiring the plan to absorb significantly higher levels of costs. Without payment rates that support our ability to continue to provide high-quality service to members, we cannot keep this great health plan open.”

Delaware Physicians Care will work with the state to deliver a smooth transition of its 137,000 members to another Medicaid plan.

There was no immediate comment from the state on the decision. Delaware has health care costs that run 25 percent ahead of the national average, according to the state. Those costs have contributed to tight state budgets.

Aetna is one of the two providers that make up the bulk of the health insurance written in the state, the other being Highmark.

Delaware also opted to widen the availability of Medicaid under the Affordable Care Act, although much of  those costs are borne by the federal government.

 

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