CVS announces layoffs due to loss of Kansas Medicaid contract
In October, CVS announced it would reduce 2,900 corporate positions in a goal to cut costs by $2 billion over several years.
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Layoffs continue for CVS Health as Aetna has announced that 164 employees would be let go as of February 15, 2024.
Aetna, a subsidiary of CVS, gave the information in a Worker Adjustment and Retraining Notification Act WARN notice filed in Connecticut. Aetna's corporate headquarters is in Harford. The layoffs affect remote workers.
The reason is Aetna's "unexpected loss of contract" for Medicaid in Kansas, the company said.
The Kansas Department of Health and Environment and the Kansas Department for Aging and Disability Services, together known as KanCare, announced that, starting in 2025, it would transition all Aetna Better Health of Kansas members to their choice of a KanCare Managed Care Organization.
Aetna Better Health of Kansas Plan would no longer provide services, KanCare said.
The three MCOs that will serve the 458,000 individuals throughout the state in the Medicaid program through 2027 are two incumbents, Sunflower Health Plan and UnitedHealthcare Community Plan, and one new organization, Healthy Blue, according to KanCare.
WHY THIS MATTERS
In October, CVS announced it would reduce 2,900 corporate positions in a goal to cut costs by $2 billion over several years.
The recent announcement of layoffs in Connecticut follows 416 that were announced in October.
THE LARGER TREND
Aetna, as other insurers, has struggled with higher-than-expected medical costs.
CVS has lowered its earnings outlook three times this year leading to concerns about the company's future and speculation over a breakup of its integrated model. In October, CVS Health underwent a strategic review, including a potential breakup of the business, The Wall Street Journal reported. CVS includes its pharmacies, Aetna, CVS Caremark – its pharmacy benefit manager – and more.
CVS acquired Aetna in 2018 for $69 billion.
No announcement has come out of the reported strategic review. Its next earnings report is expected on February 12.
Email the writer: SMorse@himss.org
