Blue Cross and Blue Shield of North Carolina on Thursday formally appealed the health plan’s decision to have public employees choose a different company to run the plan after more than 40 years.
Blue Cross, the state’s dominant insurer, filed its request for a protest meeting with the acting director of the State Health Plan, Sam Watts. The plan’s board of trustees voted last month to replace Blue Cross with Aetna beginning in 2025. State Treasurer Dale Folwell announced the winner of the bid last week.
As the next third-party administrator, Aetna would be able to oversee health care spending of more than $17.5 billion over a five-year period, according to the plan. The job is to handle health care expenses for several hundred thousand state employees, teachers, their families and retirees, ensure claims are paid, and build a network of providers.
In the protest letter, an attorney for Blue Cross said that, in part, the bidding process put together by the plan was simplistic and the scoring system was arbitrary, and that it failed to account for how a change in the provider network could harm plan members. Durham-based Blue Cross estimates its provider network is nearly 40% larger than Aetna’s.
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“State Health Plan members are more than customers, they are our neighbors, our friends, and our family, and we have filed this grievance to ensure the best outcome for them, for taxpayers, and for our state,” said Dr. Tunde, CEO of Blue Cross. Sotunde said in a press release.
Folwell, whose office oversees the plan and is chairman of the board of directors, said Thursday that he welcomed the opportunity to review the contract process and that Blue Cross “has the right to point the finger at everyone else for losing the contract.”
The initial contract is for three years. Folwell’s office has said the Aetna contract could result in $140 million in cost savings if it is extended to a maximum of five years.
The North Carolina Blue Cross appeals the loss of a 40-year state worker contract to Aetna. Blue Cross claims its network is 40% larger than Aetna’s.
“We are introducing an aggressive proposal that affirms the State Health Plan’s commitment to high-quality, affordable health benefits,” Jim Bostian, president of Aetna North Carolina, said in a written statement Thursday.
UMR Inc., a subsidiary of United Healthcare, also submitted a bid for the manager’s contract. Watts’ final decision could end up being challenged in court.
The State Health Plan anticipated paying $79 million in administrative expenses to Blue Cross during 2022 as part of the current third-party contract.
Folwell’s office said the contract will affect the plan’s 740,000 members. But Blue Cross said the contract covers 580,000 people, that leaves out those who participate in Medicare Advantage plans.
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Folwell has been unhappy with Blue Cross over the years because of obstacles to accessing company documents that he said would show whether the plan gets the best prices for insurer members’ health expenses. Legislation that was advanced in the General Assembly in 2022 but not signed into law could have addressed that.
A report released this week highlighted recent discontent among plan officials over a software system used by Blue Cross.
