Blue Cross NC appeal rejected by the state; Aetna wins bid for state employee insurance

20 January 2023

(WGHP) — Blue Cross and Blue Shield of North Carolina pushed back after the state chose another provider for the State Health Plan. Now, it seems their push has fallen flat.

After the State Health Plan decided to forgo Blue Cross NC and award the 2025-2027 contract for third-party administrative services to Aetna, Blue Cross NC filed a protest appeal.

State Treasurer Dale R. Folwell, CPA, and the State Health Plan announced Friday that it has rejected the appeal, according to the Department of the State Treasurer.

PREVIOUS: Blue Cross NC appealing decision to switch insurance provider to Aetna for state employees

Letters from Sam Watts, interim executive administrator of the State Health Plan, were sent to the losing bidders, Blue Cross NC and UMR, Inc., explaining why their protests were denied.

You can read the full letter that was sent to Blue Cross NC here.

Some excerpts of the letter read that Blue Cross NC’s positions outlined in its protest were “without merit.”

Blue Cross NC has yet to comment on the rejection of their protest.

Aetna released the following statement in response to Friday’s news that the protests were rejected by the state:

“According to a statement by Treasurer Dale Folwell, the State Health Plan Board of Trustees unanimously selected Aetna, which has been doing business in North Carolina since 1899, to administer health benefits for those who teach, protect and serve our great state. 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.”

Jim Bostian, North Carolina President, Aetna

The State Health Plan says that it will now move forward on “a seamless transition” with Aetna to inform members of when details are finalized.

State responds directly to Blue Cross NC

The now-failed appeal attempt from Blue Cross came after the announcement earlier in January that Aetna had won the contract to replace it as the third-party administrator. Blue Cross had held that position in North Carolina for over 40 years.

When they submitted the protest appeal earlier in January, Blue Cross NC released the following statement, saying that the protest appeal was about making sure the people of North Carolina were well taken care of.

“Blue Cross NC is proud of our long record of serving North Carolina’s teachers, state employees, first responders, county and city employees, and their families. State Health Plan members are more than customers, they are our neighbors, our friends and our family, and we have filed this protest to ensure the best outcome for them, for taxpayers, and for our state.”

Dr. Tunde Sotunde, president and CEO of Blue Cross NC.

Sotunde added, “Blue Cross NC’s focus will remain on providing the highest level of service to the State Health Plan members it is honored to serve.”

Blue Cross said their protest “highlights the limited information and distorted scoring system used during the decision-making process.”

Aetna responded to those claims at the time, touting the company’s “aggressive proposal” as well as their customer service, care and cost.

“We submitted an aggressive proposal affirming the State Health Plan’s commitment to high-quality and affordable health benefits. The people who teach, protect and serve North Carolina deserve a health benefits administrator that leads with customer service, quality care and affordability, and Aetna intends to deliver it to them. The hundreds of Aetna employees dedicated to this seamless transition will continue their work without distraction.

Jim Bostian, North Carolina President, Aetna

Watts responded to some of Blue Cross NC’s concerns, including those about the state’s scoring systems, in his letter.

“For example, you complain that the scoring of the Cost Proposal was based on a 10-point scale instead of a 10,000-point scale. This complaint is meaningless, however, because BCBS’ bid was in no way adversely affected. How can BCBS now complain that the scoring of the Cost proposal was incorrect or unfair if they received the highest ranking?”

Excerpt from Watts’ letter

Blue Cross said that it submitted public record requests on Dec. 15 and Dec. 20 “to better understand the State Health Plan’s decision.”

The letter addressed those concerns as well:

“Your Protest Letter also mentioned the two public records requests related to the TPA RFP submitted by BCBS on December 15 and 20, 2022. As BCBS is already aware, the deadline for all vendors to submit redacted versions of their materials just passed last week, on Monday, January 9, 2023. Thus, despite the apparent length of time since BCBS’ public records requests, there have only been seven business days since the vendor submission deadline passed.”

Excerpt from Watts’ letter

For information on the timeline of the TPA process, see the State Health Plan’s transparency page.

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