State Health Plan rejects contract protests as Blue Cross promises to 'pursue efforts'

North Carolina officials in charge of the health plan for state employees said Friday that they rejected a contract protest from Blue Cross and Blue Shield of North Carolina, which is fighting to keep a multibillion-dollar contract recently awarded to one of the company’s competitors.

The decision is an expected initial step in what may become a lengthy legal process.

A Blue Cross spokeswoman wouldn’t confirm whether the company will take the next step — moving this battle to court — but the company said in a statement that it would “continue to pursue efforts to ensure the best outcome” for the state employees, teachers and retirees on the plan.

The state health plan also rejected a protest from UnitedHealthcare, which was one of three bidders on a contract to administer the state health plan, which serves more than 700,000 people. A UnitedHealthcare spokesperson didn't immediately respond to an email seeking comment on the company’s next step.

Blue Cross has managed the plan for decades, contracting with hospitals and other providers to build a network to care for state employees and their families. The state rebid that contract last year. Aetna won and plans to take over day-to-day claims management in 2025. State Treasurer Dale Folwell, whose office oversees the plan, has said the move will save $140 million. UnitedHealthcare argued in its protest that it and Blue Cross were the cheaper options.

In its statement Friday, Blue Cross said that the health plans’ response to its protest “leaves too many unanswered questions about how this change will affect costs and access to care for state employees and teachers.” The company also said the health plan has “refused to disclose any documents about its RFP process, despite our public records requests a month ago.”

Folwell’s office said the protests by Blue Cross and UnitedHealthcare were “without merit.”

“It’s embarrassing to see entities trying to confuse our members by falsely advertising information regarding plan benefits, which only leads to unnecessary member confusion,” Folwell said in a statement.

Blue Cross’ protest complained of a “simplistic” bidding process that failed to delve deep enough into which company would best serve state employees. The company said its technical proposal got 303 out of a possible 310 points, but that the state asked for “superficial yes-or-no answers” on those 310 questions. Blue Cross said the plan treated each question as equally important and refused to accept explanations from bidders.

Sam Watts, the health plan’s interim executive director and one of Folwell’s senior advisors, said in a statement Friday that “arguing that if the questions were asked in a different way or graded differently the outcome would have been different is not how procurement works.”

Folwell noted that the state health plan’s board of trustees, which awarded the contract, did so unanimously.

Blue Cross has said it has a larger network to serve employees, but Aetna has said it analyzed more than a year’s worth of claims from the plan and found 98% came from providers already in Aetna’s network. Aetna is also working to “to recruit even more providers and will only continue to do so over the next two years,” Folwell said Friday.

The treasurer also said Aetna employs twice as many North Carolinians as Blue Cross and that it provides similar third party administrator services for the city of Durham and Duke University.