Louisiana Judge Puts Medicaid Move On Hold Amid Aetna Protest

A judge in Louisiana has issued a temporary restraining order to stop health officials there from awarding contracts for a state Medicaid plan so that insurer Aetna Inc. (AET) can sort out its plans in an ongoing appeal process.

Aetna is among companies that weren't picked in July to coordinate service for nearly 900,000 Medicaid recipients in Louisiana, a move that could add up to about $2 billion in annual revenue for the managed-care industry. Aetna has protested this decision, citing issues it sees such as a lack of transparency in the scoring of winning bids, but the company's appeals have been denied thus far by both the Health and Hospitals department and the state's Commissioner of Administration.

On Tuesday, Judge Janice Clark of the 19th Judicial District Court signed an order giving Aetna 14 days to determine whether it intends to file a petition for judicial review. Aetna said it was pleased with the judge's decision.

"The temporary restraining order will provide the time necessary to determine whether to pursue judicial review of these contracts, which is important not only to Aetna but also to the 800,000 residents of Louisiana whose health care will be governed by the contracts," the company said in a statement.

Lisa Faust, a spokeswoman for the Louisiana Health and Hospitals department, said Thursday that the department has filed a motion to dissolve the temporary restraining order. She also said a hearing is set for next Wednesday on that motion and on the restraining order.

The Health and Hospitals department recommended five companies--Amerigroup Corp. (AGP), Centene Corp. (CNC), UnitedHealth Group Inc. (UNH) plus two private firms--for contracts to serve Medicaid recipients in the state. Both Aetna and Coventry Health Care Inc. (CVH) have raised protests.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

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