Instead, Delaware awarded a three-year contract to Highmark, effective Jan. 1. Highmark, a Blue Cross and Blue Shield subsidiary based in Pittsburgh, operates Delaware's Blue Cross plan. Delaware also renewed its agreement with UnitedHealthcare for three years.
Aetna will close its subsidiary, Delaware Physicians Care, at the end of the year, but will continue to provide coverage through Dec. 31. Aetna will work with the state to move its 137,000 members to one of the other two managed-care plans. Delaware Medicaid Director Stephen Groff said in a statement that the state will reach out to Medicaid beneficiaries in the next several weeks to explain the new options.
Aetna has provided Medicaid coverage in Delaware for the past decade, but said the state made financially burdensome changes to its new contract. “Without payment rates that support our ability to continue to provide high-quality service to members, we cannot keep this great health plan open,” Aetna's Medicaid CEO Pamela Sedmak said in a release.
Groff said in an email that Delaware's new Medicaid contract “includes new benefits/expectations” for insurers, and “that could certainly have played a role” in Aetna's decision to walk away. However, he did not elaborate on new managed-care requirements. “Ultimately, it came down to an inability for Aetna and the state to reach agreeable financial terms,” he said.
Aetna spokesman Walt Cherniak and Delaware Medicaid officials declined to share further details of the failed negotiations. Aetna also did not disclose its Delaware Medicaid financials, which are not listed in the company's Securities and Exchange Commission filings.
Aetna collected more than $3.8 billion in premiums from state Medicaid agencies in 2013, covering more than 2 million Medicaid members. About 86% of Medicaid premiums went toward covering medical care. Aetna will report third-quarter earnings Oct. 28.
—Virgil Dickson contributed to this report.
Follow Bob Herman on Twitter: @MHbherman