UnitedHealthcare unit latest to protest state's health care contract

The company lost a bid to Aetna. Blue Cross Blue Shield of North Carolina, which had held the multibillion-dollar contract for decades, is also protesting the state's decision.

Posted 2:00 a.m. Jan 14, 2023 — Updated 3:59 p.m. Jan 14, 2023

Another company is protesting the state’s decision to award a multibillion-dollar contract to a competitor, alleging that the state failed to conduct an impartial evaluation of bids to manage the North Carolina State Health Plan. The state’s treasurer, however, says the process was fair.

UMR, a unit of insurer UnitedHealthcare, on Friday filed a protest with the state health plan. The group said it and competitor Blue Cross Blue Shield of North Carolina could have saved the state more money than Aetna, the winning bidder. UnitedHealthcare executives now want the state to reevaluate cost proposals and reconsider its decision.

The protest was filed a day after the contract was protested by BCBSNC, which alleged that “limited information and arbitrary scoring” were used to make the decision to choose Aetna. BCBSNC, which has managed the contract for decades, said in its protest that it offered “the lowest administrative fee of any bidder.”

UnitedHealthcare said that it's subsidiary and BCBSNC maintained a cost advantage of about 6% over Aetna. It also projected that the contract with Aetna would increase the health plan’s costs by $500 million.

State Treasurer Dale Folwell, whose office oversees the health insurance plan along with a board of trustees, has said that the contract with Aetna, which runs from 2025 to 2027, would save the state about $140 million.

“The award was not made based on the bid that was most advantageous and represented the best value to the state,” UnitedHealthcare said in its protest.

Folwell said in a statement Friday that he welcomed the opportunity to discuss and review the health plan’s contracting process.

“We developed a process where all parties had a fair chance to win the contract and we have a duty to seek the best financial value and member service for those that teach, protect and serve as well as taxpayers like them,” he said.

Jim Bostian, Aetna’s North Carolina president, said in a statement on Saturday that the company is dedicated to a seamless transition for members of the state health plan.

“We submitted a strong proposal affirming the State Health Plan’s commitment to high-quality and affordable health benefits,” he said. “The people who teach, protect and serve North Carolina deserve a health benefits administrator that leads with customer service, quality care and affordability, and we will deliver it to them.”

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