Insurance firm’s complaint about bid rejected by agency

The state Office of Group Benefits has rejected United Healthcare’s protest concerning the hiring of Blue Cross and Blue Shield of Louisiana to manage state employee health insurance plans.

“As is often the case with unsuccessful procurement proposers, United Healthcare’s protest theme paints a picture of unfair, biased treatment of one proposer compared to another. Also typically, United Healthcare’s picture is self-serving and incomplete in the ‘facts’ provided,” Charles D. Calvi Jr., OGB’s chief executive officer, wrote in his response to the protest.

United Healthcare’s next remedy is to file an appeal with Commissioner of Administration Paul Rainwater, who is Gov. Bobby Jindal’s chief budget advisor.

Rainwater’s spokesman, Michael DiResto, said Wednesday that further appeals have not been filed.

A spokeswoman for United Healthcare did not respond to a request for comment.

United Healthcare, Blue Cross and Blue Shield, and Humana submitted proposals earlier this year to serve as administrator of state health plans covering more than 200,000 people.

A panel of state officials opted to hire Blue Cross and Blue Shield of Louisiana. The company stands to receive $37.8 million a year.

The contract will result in layoffs at the state-run Office of Group Benefits, which provides health and life insurance to about a quarter-million current and retired state employees and dependents.

Beginning in January, Blue Cross and Blue Shield is scheduled to begin handling a package of health plans, eliminating the need for 177 state jobs at the Office of Group Benefits.

The Jindal administration contends the shift will save the state $20 million a year and put Louisiana more in line with how state employee health plans are handled in other states.

United Healthcare objected to losing the contract, citing a flawed analysis, objectionable scoring and an alleged favoritism shown Blue Cross and Blue Shield.

The company said Blue Cross and Blue Shield was allowed to amend its proposal hours before the award was issued.

United Healthcare contends it also was the least expensive bidder.

In his response, Calvi said United Healthcare did not follow the submission guidelines, requiring communication to get clarification and information on multiple issues.

“Not only do I find United Healthcare’s assertion that Blue Cross was permitted to substantively amend its proposal, as well as allegations of bias, to be totally without merit, I find the inclusion of this issue in the protest to be incredible in light of the facts set forth above regarding United Healthcare’s original non-responsive proposal,” he wrote.

Calvi said companies received scores based on expected claims costs, administrative fees, general requirements, administrative capabilities and participating provider access.

In the scoring, he said, Blue Cross received the most points, beating United Healthcare by 21 points.

“The proposal submitted by Blue Cross was determined to be the most advantageous to the state,” Calvi wrote.