Blue Cross and Blue Shield of Georgia appears to be the winner in a hotly contested, big-money bid to administer health coverage for about 650,000 state teachers, employees, retirees and family members.
However, one of the companies that is currently running the plan — UnitedHealthcare — has alleged that the state agency responsible for the program held a secret bid that kept it from competing for the business.
“In what has to be one of the most egregious examples of a state entity acting outside the boundaries of Georgia procurement law, the Department of Community Health … is conducting a secret, hidden procurement,” says a protest filed by UnitedHealthcare.
The company has hired a legal team that includes Randy Evans, Gov. Nathan Deal’s campaign lawyer, and former Georgia Attorney General Thurbert Baker, to press their case.
DCH on Wednesday released a “notice of intent to award” the administrative/management contract to Blue Cross and Blue Shield. The agency allows 10 days for unsuccessful bidders to respond, then can award the contract.
Bert Kelly of Blue Cross and Blue Shield of Georgia said, “We’ve seen the intent to award. At this point, we don’t have the award, so we can’t comment.”
The state health benefits plan is big business. The Department of Community Health-run programs pays out more than $3 billion each year in medical costs. Currently two insurance companies — Cigna and UnitedHealthcare — administer the plan.
The department opened up a competition to administer the plan earlier this year. UnitedHealthcare was among the companies that presented proposals.
United’s protest, however, said the agency held separate bidding through a private contractor and only invited companies with a password could go on the contractor’s web site and bid, according to the protest.
The agency this week acknowledged that it set up a separate bid and that some potential bidders, including Cigna and UnitedHealthcare, were not offered the chance to present a proposal.
Asked why the department staged a second bid, a spokeswoman wrote in an email that DCH wanted “to solicit a response from a regional vendor to fulfill the state’s request for a potential contract for health coverage within certain geographical, cost and plan design requirements.”
Asked for clarification, the spokeswoman replied that DCH was “looking into the process” and couldn’t comment further.
UnitedHealthcare’s protest said DCH went “rogue” and “overstepped its authority” in not holding open bids for the contracts.
“Over 650,000 members, the majority of whom reside in Georgia, including state executive branch employees, judges and teachers, depend upon (the plan) for their health care,” the protest said. “Yet DCH has been running two parallel procurements side-by-side, one secret, one public, for contracts to cover the same population.”
Bobbie Jean Bennett, a retiree who used to administer the benefits plan when she ran the State Merit System, said Blue Cross did a “credible job” when it handled health claims for employees and retirees in the past.
“As a general rule, Blue Cross had a good reputation and they (employees and retirees) would be as satisfied with Blue Cross as they would be with any other firm,” she said. “It’s too early to worry about the administrator. The issue is, what (coverage) is going to be offered and how much is it going to cost?”