Aetna Work Comp Access will be exiting the provider network business. Over the next couple of years, current direct customers will be losing access, with the duration of access dependent on whether the relationship is direct or through a reseller. I’ve got my own opinions on why, but will hold them for now in hopes I hear back from Aetna soon.
This hasn’t been announced publicly, but sources indicate all AWCA’s direct clients were informed over the last couple of months, and the ‘indirect’ clients – those accessing AWCA through Coventry or another entity – are finding out thru their account managers (if not, to misquote Desi Arnaz, “you got some ‘splainin’ to do…”).
First, a bit of history. Veterans of the industry will recall Aetna made a big push into the WC provider network business back in 2006, positioning itself as a competitor to Coventry/First Health. An executive team was hired, staff came on board, and they were off and running. Some years later, senior management at Aetna decided to change course, and instead of competing with Coventry, they became Coventry’s network in what they said at the time was nineteen states.
Coventry’s been using Aetna as their underlying network in about 15 states since late in 2007.
Shortly after, senior management was terminated in a surprise move in September, 2008.
More recently (January 2011 to be precise), most of their customer-facing staff were laid off r and Aetna ended (most of) their direct relationships and pushed those customers to work thru their resellers, including Coventry.
I spoke with David Young, President of Coventry Work Comp about this, and here’s what he had to say.
Way back when the two entities first got together, they included what David called “divorce provisions” in the deal they structured. Back in January Coventry got notice to term contract at beginning of year. Over the course of 2011, both parties were in discussions, with Coventry looking to renew the relationship. That was not to be. Early this fall, Aetna confirmed their intent to exit the business.
As a result of those “divorce” provisions, Coventry’a network customers will have access to Aetna’s network thru 12/13. David believes this is longer than any other entity (I’ll ask Aetna when I hear back from them). Coventry plans to use that two year window to evaluate their current network, figure out where they need to backfill, and get as much as possible of that done before the clock stops ticking.
So far, Young’s analysis indicates Coventry’s current non-Aetna direct and leased network contracts can cover about 70%+ of the dollars flowing the network. They’re starting a targeted recruitment effort in areas most affected by Aetna’s departure, and are looking to strengthen relationships with current leased network partners as well.
Of course, David was quick to note this has no bearing on their interest and commitment to the WC business – Coventry is commited to the comp business. I believe him. They are making so much money from comp that they’d be nuts to get out – and Chairman Allen Wise is not nuts.
That said, this opens up the door for other network companies, as large and mid-sized payers, network aggregators, and bill review companies are looking hard at alternatives.
One last point. A lot of work comp dollars flow thru Coventry’s networks, and they aren’t shy about using those dollars to squeeze providers for better pricing. David indicated they’ve had success in negotiating deals with two health systems recently doing just that.
I hope to hear from Aetna tomorrow.
Dec
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