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Aetna ends court fight with state over Medicaid plan

Aetna ends court fight with state over Medicaid plan

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A company that lost its bid to continue managing health care plans for Nebraska Medicaid recipients under a new program and tried to stop the state from moving ahead has ended its legal fight.

Attorneys for Aetna Better Health of Nebraska on Friday asked a judge to dismiss their lawsuit against several state agencies, including Nebraska's Department of Administrative Services and Department of Health and Human Services.

They had taken issue with the procurement process for awarding contracts to manage plans available to Medicaid and Children’s Health Insurance Program participants under Nebraska's new managed care program, called Heritage Health.

The long-term contracts will serve some 230,000 Medicaid recipients and are expected to total more than $1 billion, possibly the state's largest-ever contract procurement.

Aetna had claimed state officials unfairly withdrew its initial contract award in exchange for a different managed care organization that shouldn't have qualified in the first place.

State officials called the selection process impartial and designed to benefit taxpayers, not individual bidders. Six managed care organizations, including Aetna, applied last year to make their options available in Nebraska. Aetna didn't make a short list of three winners.

Aetna officials asked a judge to halt the implementation of the Heritage Health program, alleging the award process was not open and fair to all bidders as required by Nebraska law.

But U.S. District Judge Robert Rossiter Jr. denied that request Aug. 19, saying Aetna's legal claims failed to show the need for the injunction they sought, which he called "extraordinary remedy."

Heritage Health launches in 2017 and is designed to cover each patient under a single plan, rather than separate plans for physical and behavioral health.

An Aetna spokesman didn't respond to a request for comment Friday afternoon.

Arbor Health Plan, which had also filed a lawsuit over the bidding process, asked Rossiter to dismiss its case Friday as well.

In a statement Friday, Nebraska Attorney General Doug Peterson applauded the moves.

“I am pleased that Judge Rossiter’s sound and well-reasoned order will stand and that the Plaintiffs have declined to further litigate their challenges to this critically important project.”

Reach the writer at 402-473-2657 or

On Twitter @LJSRileyJohnson.


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Local government reporter

Riley Johnson reports on local government in Lincoln.

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