Blue Cross Blue Shield of Georgia is appealing a decision by the Department of Community Health to drop Blue Cross from its State Health Benefit Plan. But state officials say that won't affect an upcoming change in the program's insurance options.
The program covers almost 700,000 state employees and retirees, including public school teachers.
About 176,800 of those members are currently covered by Blue Cross. They were informed in July that when open enrollment begins Oct. 10, they will have to choose a plan from either United Healthcare or Cigna.
Matia Edwards, spokeswoman for the Department of Community Health, said very few members will need to switch physicians.
"Currently 97 percent of SHBP members' doctors participate in either Cigna or UHC," she said.
Edwards said the State Health Benefit Plan is being restructured in an effort to save about $700 million over the next five years. Agency officials believed the best way to save money was to narrow down the program to just two insurance companies.
Interested companies were asked to submit proposals last spring in a two-phase process. First, they had to demonstrate their quality of service and whether they could offer a physician network large enough to cover most members.
"Our strategy aligns with feedback from our members who value quality health care and strong access to health care providers in their community," said Nancy Goldstein, chief of the State Health Benefit Plan division of the Department of Community Health. "More than half of our members reside outside of the metro Atlanta area, so providing greater access throughout the state has been a top priority."
During this first phase, United Healthcare and Cigna were chosen as the top two bidders. Edwards said Blue Cross ranked fourth, after third-place Consumers Life Insurance Co. Other
bidders included Kaiser Permanente, Humana and Aetna.
In the second phase, the Department of Community Health negotiated with the top bidders on prices. Edwards said through this process, the state was able to save $108 million over what the companies originally bid.
Blue Cross was informed on May 22 that it had lost out on the bidding process, which came as a shock to the company.
"Blue Cross and Blue Shield of Georgia has served the State Health Benefit Plan members for more than 25 years," said Blue Cross spokeswoman Cheryl Monkhouse.
She said after being told of the Department of Community Health's decision, Blue Cross immediately filed an open records request to obtain the documents the agency had used in selecting United Healthcare and Cigna.
Blue Cross complained that the agency did not release all the documents that were requested. But based on the information the company was able to get, Monkhouse said, "(Blue Cross) determined that the award of the SHBP to United Healthcare and Cigna was unlawful and void because DCH failed to appropriately consider costs in its selection process as required by Georgia law, and failed to properly score the evaluations."
Blue Cross filed its appeal in July, two days after the Department of Community Health sent out a letter informing plan members they will need to switch to United Healthcare or Cigna in January.
Monkhouse said Blue Cross has requested that the agency rescind its awards to United Healthcare and Cigna and rebid the contracts. But Edwards said the employee benefit plan will switch over to those two companies on Jan. 1 as scheduled.
"The appeals process itself does not delay rollout of the two statewide health plans chosen," she said.
The agency made its decision before a July incident in which Blue Cross accidentally mailed out confidential patient information to thousands of wrong addresses, putting members at risk for identity theft.
Edwards said though employee health insurance premiums will increase an average of 7.5 percent for 2009, there will be advantages to the change in companies.
"The added benefit to our members in the rural parts of the state is that they may choose a plan from two vendors that service their area, instead of just one vendor (as) in past years," she said.
Both United Healthcare and Cigna will offer eight different plan options, including an HMO, a PPO, a high-deductible plan and a health savings account.
There will be no break in coverage for members who switch from Blue Cross, so there are no restrictions for pre-existing conditions. Also, if a member is already being treated by a provider who is no longer in one of the two companies' networks as of Jan. 1, they can apply to have coverage extended.
The deadline for members to choose a plan is Nov. 10.