A North Carolina state court has sided with the state in its decision to award Aetna its health plan contract for public employees over Blue Cross Blue Shield of North Carolina.
"[BCBS] has not met its burden of demonstrating, by a preponderance of the evidence, that the [state] acted erroneously; failed to use proper procedure; acted arbitrarily or capriciously, or failed to act as required by rule or law," the judge wrote July 8.
Starting in 2025, Aetna will take over a three-year initial contract for 742,000 North Carolina state employees, retirees and their dependents. The contract can be extended up to five years total, and it manages about $3 billion in medical claims per year.
The 10-member state board that oversees the plan voted unanimously in 2022 to switch administrators. Aetna was one of three companies to bid for the state's health plan, while BCBS and UMR (UnitedHealthcare) lost out. BCBS, which held the contract for over 40 years, filed a legal challenge against the decision in 2023.
"At the end of the day, we submitted a very competitive response to the RFP and we're proud that we came out on top," Jim Bostian, president of Aetna's Midsouth and Capitol markets, told Becker's last year.
"While we are disappointed in the court’s ruling, we are gratified that the court reviewed the serious questions we raised about the State Health Plan’s 2022 RFP process," a Blue Cross NC spokesperson told Becker's. "State Health Plan members and the public deserved an independent review of the Plan’s RFP process, which failed to select the bid that offered the lowest cost and the broadest network. Blue Cross NC is honored to serve our teachers, public safety officers and state employees and will continue to provide the highest level of service throughout the current contract."
"While disappointed in the outcome, Blue Cross NC will not appeal the court’s ruling regarding the State Health Plan’s RFP process," a spokesperson told Becker's on July 15. "While we will continue to provide the highest level of service throughout the current agreement, we know that our relationship with North Carolina’s teachers, public safety officers, and state employees is guided by something far more meaningful than a contract. Together, we share a vision of a better, healthier tomorrow and remain united by a common sense of purpose and commitment to the state we call home."