A superior court judge Wednesday rejected UnitedHealthcare’s bid to stop rival Blue Cross and Blue Shield of Georgia from taking over a giant state contract currently held by United.
Blue Cross has already begun implementing the contract to administer health care for about 650,000 Georgia teachers, state employees, retirees and family members.
Judge Kimberly M. Esmond Adams said UnitedHealthcare has not “exhausted its administrative remedies,” meaning the Department of Community Health has yet to rule on United’s protest of the agency’s decision to give the biggest chunk of the state health benefits business to Blue Cross.
The problem, UnitedHealthcare argues, is that the protest will be decided by the same agency that used secret bids and negotiations to make sure Blue Cross and Kaiser Permanente won the right to handle the $3 billion-a-year program starting Jan. 1.
“This was messed up from the beginning, it was rigged from the start,” said Bill Jordan, a lawyer representing UnitedHealthcare and former chairman of the state ethics commission.
“No one has denied this was state-sponsored bid-rigging,” added Randy Evans, another UnitedHealthcare lawyer and Gov. Nathan Deal’s campaign attorney.
But lawyers for Blue Cross and Kaiser had another name for United’s legal fight: sour grapes.
“United … is a very disappointed bidder,” said Stan Jones, a lawyer and lobbyist for Kaiser Foundation Health Plan of Georgia. “I think the grapes are sour.”
Government health-care contracts are big-money business, and that was evident in Adams’ courtroom, which was packed with high-priced legal talent representing the interests of several companies. The Department of Community Health, which provides health care to more than 1.6 million Georgians, will spend about $12 billion on public health care programs this year.
The Atlanta Journal-Constitution reported last month that the agency planned to award the largest chunk of the state employee/retirees health benefits contract to Blue Cross over UnitedHealthcare, one of two companies that now manage the program.
UnitedHealthcare alleged that the DCH gave Blue Cross special treatment and used a secret bid to award about 10 percent of the business — for HMO clients in metro Atlanta — to Kaiser.
The day the AJC story ran, DCH Commissioner Clyde Reece acknowledged flaws in the agency’s handling of the Kaiser business and announced it would hold new bids for that coverage.
However, that didn’t affect the awarding of the larger contract to Blue Cross.
Evans of UnitedHealthcare argued Wednesday that through either “incompetence or deception,” the agency has broken the Open Records Act by not delivering documents the company needs to protest the contract awards. Assistant State Attorney General Robin Leigh responded that the agency has limited resources and has undergone “several budget cuts” in recent years. She said the fact that the state has struggled to keep up with the open records requests was no reason for the courts to delay implementing the health care contracts.
Evans argued that the “safest” thing for the court to do was keep the current health care plan intact until the bidding issues are settled. United has most of the current business. Blue Cross officials say that option would also be the most costly, since they claim Blue Cross can save the state hundreds of millions of dollars.
Atlanta isn’t the only place UnitedHealthcare is fighting legal battles with Blue Cross in the South.
UnitedHealthcare filed a lawsuit in July asking a judge for an injunction to prevent the city of Birmingham, Ala., from renewing a similar health benefits contract with Blue Cross. It said city officials unfairly favored Blue Cross when awarding its health care business.