Ohio Court Grants Aetna's Request To Halt Medicaid Contract Process

Date : 06/26/2012 @ 7:00PM
Source : Dow Jones News
Stock : Molina Healthcare (MOH)
Quote : 90.71  4.89 (5.70%) @ 12:15PM

Ohio Court Grants Aetna's Request To Halt Medicaid Contract Process

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   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

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