EBR board keeps Blue Cross Blue Shield as administrator

The East Baton Rouge Parish School Board voted narrowly to renew for three more years with Blue Cross Blue Shield of Louisiana to administer the system’s self-funded employee health insurance plan.

The new contract, which would take effect Jan. 1, would increase Blue Cross’ charge from $29.47 to $33 per employee.

That works out to an almost $2.8 million in 2015, based on an estimated 7,000 active and retired employees whom Blue Cross would serve.

In 2013, the school system had more 9,500 employees using Blue Cross, which meant almost $3.4 million in administrative fees to Blue Cross. About 2,800 retirees now are on a Medicare Advantage plan administered by Humana.

The vote on Thursday was 7-2, with board members Vereta Lee and Kenyetta Nelson-Smith voting in the minority. Board member Jill Dyason and Mary Lynch, who was appointed to the board Thursday, both abstained.

The last time Blue Cross raised its per-employee rate was in 2009.

The board had planned to vote on this item in February but delayed so the board could first see the results of an outside audit of Blue Cross.

That audit looked at how many retirees were improperly on the school system’s group insurance for primary insurance rather than on Medicare as they should have been. It was prompted when Blue Cross failed to let some employees know they were supposed to shift to Medicare.

Mercer, the health care consultant for the school system, sampled 200 out 112,000 claims from May 2012 to April 2013. Auditors found that claims that were overpaid by a collective of $83,000. Mercer said it found an error rate of 10 percent, well above the industry standard is 3.5 percent.

Blue Cross has said it is reimbursing those overpayments and is retraining claims processors to prevent similar problems in the future.