UnitedHealthcare has filed a strongly worded protest of the awarding of a state employees benefits contract, alleging that Georgia officials “rigged’’ the bid in...

UnitedHealthcare has filed a strongly worded protest of the awarding of a state employees benefits contract, alleging that Georgia officials “rigged’’ the bid in favor of a competitor.

A letter from United and its attorneys at law firms Alston & Bird and McKenna, Long & Aldridge asks the Department of Community Health’s commissioner to review the award made to Blue Cross and Blue Shield of Georgia, which was formally announced Friday.

The attorneys’ letter, dated Monday, alleges the agency engaged in “state-sponsored bid-rigging.’’

Blue Cross was the single insurer selected to deliver health plan administration and medical management services to the more than 650,000 state employees, teachers, other school personnel, retirees and dependents in the State Health Benefit Plan.

(The new state employees contract also, for the first time, prohibits coverage for abortion except in cases where the mother’s life is in jeopardy.)

United’s protest letter accuses the Department of Community Health (DCH) of engaging “in a biased, unfair, opaque, and uncompetitive process more like the ‘old Georgia’ of backroom deals and shady politics than a state government that, at least on the surface, claims to value free and open competition.

“It is odd that a state that has lambasted the Obamacare health care exchanges, which at least offer participants a choice among insurance providers, will now funnel the vast majority of its employees, teachers, and retirees into a single, hand-picked insurer that already has a substantial market share in Georgia,’’ the letter continued. “And DCH is doing this after engaging in a procurement process that was rigged from the start.’’

DCH said Tuesday that it would not comment on the letter because it involved an ongoing legal dispute. Blue Cross, in an email to GHN, also did not comment on United’s allegations.

“We are pleased that the state selected BCBS Georgia . . . through an open, transparent and public process where it determined that our proposals provided the best value-based solution for the state,’’ said the email from Blue Cross spokesman Bert Kelly. “We look forward to working with the state to improve health outcomes and to reduce health care costs.’’

Earlier this month, Clyde Reese, who took over as DCH commissioner July 1, acknowledged that a separate, “regional” vendor contract for the metro Atlanta area was ‘‘not properly inclusive’’ and that he had decided to rebid it. His decision followed a protest by United, which called the regional contracting for the State Health Benefit Plan (SHBP) a “secret’’ bid.

But Reese also told reporters last week that he felt the agency has a strong legal position against possible litigation over the contract, and he denied bid-rigging was involved.

The new benefit plan will reduce premiums for many employees and teachers, state officials said as they announced the contract winner.

The Community Health board last week approved the new benefit plan design and rates in an unusually contested 5-3 vote, with one abstention.

Board member Jamie Pennington protested that some SHBP members in one area of the state could have a choice of insurers — if a regional insurer is also picked — while those in other regions won’t have a selection of plans.

United’s protest letter focuses on the state’s original request for bidders to submit proposals for three types of medical plans – an HMO, a PPO/Health Reimbursement Arrangement (HRA) and a high-deductible health plan.

But the United attorneys allege that the state decided to adopt just a PPO/HRA, and that only one insurer, Blue Cross, was asked to bid on the single offering.

“DCH unilaterally and without any notice amended the terms of the Public RFA [request for approach] to its favored bidder, jettisoned two plan designs that had formed the basis for UnitedHealthcare’s submission, and contracted with Blue Cross Blue Shield for a PPO/HRA-only Third Party Administration and Medical Management contract,’’ the letter stated.

“There is simply no dispute that Georgia law prohibits a state agency from asking for one thing in an RFA and then contracting for something else.’’

Emails from state officials prove the bid was steered to Blue Cross, Chuck McMullen, managing director of McKenna, Long & Aldridge, told GHN.

Separately, he said, United has filed a motion for a temporary restraining order and an injunction in Fulton County Superior Court.

The letter also said that DCH requested a bid on integrating medical management and health plan administration “from only a single bidder — Blue Cross Blue Shield — and directed UnitedHealthcare and all other bidders that they could not submit an integrated proposal.”

Recently, medical providers have expressed concern that a single insurer for the SHBP could lead to lower payments to them, especially with the level of savings that the state expects.

And the president of the Georgia Association of Educators says the state health plan has never before had a single statewide insurer. “This single provider decision is unprecedented and unfortunate as we know from previous experience no single insurance provider is capable of statewide coverage,” said a statement from Calvine Rollins of GAE.

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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

  • TeacherByChoice

    October 19, 2013 #3 Author

    The statement that the state’s plan will lower state employees premiums is misleading. I am a teacher, and yes, the premiums could be lower, but coverage is also lower. I have chosen an HMO option in previous years, and my health expenses will end up being considerably more when you consider that I will no longer be able to pay a copay for office visits and will also have to pay for services that were covered at 100% on the HMO. This plan is NOT less expensive for state employees overall. I also do not appreciate having no choice in my health insurance provider.


  • cheatededucator

    October 25, 2013 #4 Author

    Absolutely this has been rigged and state employees are being cheated! I am a teacher and there is not one educator who will testify that BCBS is an improvement! Premiums are lower but the benefits are shamefully decreased and and are so low that it doesn’t justify the cost of the premiums. In fact, to have coverage that doesn’t even compare to that of what we had with United Healthcare, our premiums would actually increase $150 a month! Let’s see some integrity by way of honesty! Do we not remember how ridiculously BCBS behaved just a few years ago, so ridiculously that we lost access to Piedmont Hospitals? This is horribly unjustified cheating of the educators in this state, especially as we have seen our incomes steadily decrease, our insurance premiums and taxes increase, and then to be relegated to the worst insurance company in the state. Fight, United Healthcare, fight! You’ll find the teachers support you!


  • Delwin

    November 2, 2013 #5 Author

    I totally agree! For one thing, my doctor is not even contracted with BCBS. I strongly believe that this is a BIG mistake in only allowing BCBS to be the only coverage available for employees! I have elected not to take the coverage and will continue to see my doctor as a cash pay patient. Why pay for healthcare and you have to pay the doctor too?


  • rich

    November 6, 2013 #6 Author

    Too anyone who is a state employee and is not happy with this rigged system needs to file complaints to the govenors office. What used to cost me roughly 2000 a year will cost almost 10000 a year since blue cross will not pay for out of network doctors and that goes for prescriptions too. If an out of network provider write you a prescription you will pay for it out of pocket. This is wrong and we need a voice to stand against this.


  • GA teacher

    January 4, 2014 #7 Author

    See the Facebook group T.R.A.G.I.C. To hear hundreds of horror stories about the new BSBC “plan.”


  • John

    January 4, 2014 #9 Author

    They took an extra 2,000.00 out of our pay check for out insurance that was to be 500.00. When will we see a refund? We have bills to pay.


  • Bonnie Simpson

    March 12, 2014 #10 Author

    Georgia teachers need to right now complain to the Governor. Be loud and get results.


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