State Health Plan rejects appeals from Blue Cross NC and United Healthcare

The state treasurer and the State Health Plan rejected appeals Friday from Blue Cross NC and United Healthcare, the losing bidders for the contract to administer the plan.

Letters explaining the denial were sent to the losing bidders by plan interim Executive Director Sam Watts. That ends the protest process, and the state plan will move forward with its contract with Aetna — which is slated to take over Jan. 1, 2025 — according to a statement released by Treasurer Dale Folwell.

Blue Cross NC, which had administered the State Health Plan for more than 40 years, filed an appeal Jan. 12 rejecting the state’s decision to replace it with Aetna. In its appeal Blue Cross NC wrote that the request for proposals (RFP) — the bidding process used to select a contractor — had been oversimplified in comparison to previous bids. A day later, United Healthcare filed its own protest.

A third-party administrator handles all of the administrative tasks associated with health insurance, such as setting up technological systems, negotiates prices with hospitals and other health care providers and processes the bills to send to the state.

“Responding to an RFP is completely voluntary. Arguing that if the questions were asked in a different way or graded differently the outcome would have been different is not how procurement works,” Watts said in the statement.

Early last year, the RFP questions and methodology were explained to the bidders, the statement says, and staff then reviewed responses according to laid-out standards. After the scoring and evaluation, the plan’s Board of Trustees unanimously voted to award the contract to Aetna.

The North Carolina president for Aetna, Jim Bostian, said in a statement shared with The N&O on Friday, “My sole mission — along with the hundreds of North Carolina-based Aetna employees working right now on the transition — is to make this process seamless. We will deliver on that mission without distraction.”

The plan will work with Aetna on a “seamless transition involving a robust communications effort to members when details are finalized,” according to the plan’s statement.

In a statement Friday following the rejection, Blue Cross NC spokesperson Sara Lang wrote that its bid to the state plan “serves the best interests of the Plan’s members” and that they “will continue to pursue efforts to ensure the best outcome for teachers, state employees and North Carolina taxpayers.”

Lang also said the plan’s response leaves “many unanswered questions about how this change will affect costs and access to care for state employees and teachers,” and expressed disappointment with the plan refusing to disclose any documents about its RFP process, despite its having filed public records requests a month ago.

The N&O has also filed a request for the RFP documents. According to information shared previously by the treasure’s legal staff, there was a silent period in effect upon the posting of the request for proposals that runs until there is a valid contract.

The treasurer’s office, alongside the rejection statement, also posted a website which will “provide documents associated with the TPA RFP.” The site has the TPA timeline and the rejection letters.

The state plan oversees health care spending of more than $17.5 billion across five years and covers 740,000 teachers, state employees, retirees and their dependents. Premiums, co-pays and deductibles, set by the state plan, are not changing, according to the plan’s statement.

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