BCBS North Carolina lost state health plan contract despite proposing lowest overall cost, records show

The three payers competing for North Carolina's state health plan contract submitted very similar bids, but Aetna ultimately won out based on a higher score for its administrative services, according to new documents released by the North Carolina State Treasurer's office. 

According to a Feb. 7 news release, Treasurer Dale Folwell released all of the documents related to the contract procurement process in response to demands from the losing payers — Blue Cross Blue Shield of North Carolina and UnitedHealth subsidiary UMR — for more information. 

"This contract doesn't change the body or engine of the State Health Plan, it is just a modernization of the transmission. We look forward to Blue Cross finishing their current contract strong and facilitating a seamless transition to Aetna," Mr. Folwell said in the release. 

Mr. Folwell said Jan. 4 the state intended to award Aetna the State Health Plan contract, which covers 740,000 state employees, beginning in 2025. BCBS North Carolina has held the contract for over 40 years. 

Aetna was awarded an initial three-year contract with the option to renew two one-year terms. The contract includes healthcare spending of more than $17.5 billion over five years.  

The state has rejected protests from Blue Cross NC and UnitedHealthcare. 

In evaluating the bids, state officials assigned rankings to the payers based on the technical and cost components of the proposals. 

Blue Cross NC priced its administrative costs at $17.505 billion, compared to Aetna's $17.522 billion, according to the News and Observer, separating the two payers' costs by less than one-tenth of a percent. United priced its cost at $17.792 billion. 

Aetna's claims processing cost was the lowest of the three bids, state officials told the News and Observer. 

According to documents from the state treasurer's office, Aetna was ultimately selected because it scored higher than Blue Cross NC on technical components of the bid, and better than United Healthcare on costs. 

In a statement shared with Becker's, a BCBS NC spokesperson said the documents "say nothing on network analysis or disruption to member care." 

The documents released reveal that North Carolina’s teachers, state employees and taxpayers will pay more and get less under the new State Health Plan contract. Blue Cross NC offered the lowest total cost by more than $17 million as well as the broadest network, making its proposal the best for the state," the spokesperson said. 

Read more here. 

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