RALEIGH — A challenge to the N.C. State Health Plan’s change in Third Party Administrator (TPA) to Aetna can proceed, according to a recent court order by Administrative Law Judge Melissa Owens Lassiter.
The current administrator, Blue Cross Blue Shield of North Carolina (BCBSNC), brought the challenge after State Treasurer Dale Folwell announced the change in January 2023.
Lassiter’s order denied motions for summary and partial summary judgments by Aetna and the State Health Plan aimed at bringing the challenge to a quick resolution.
Additionally, Lassiter denied a request to exclude the testimony of BCBSNC’s expert witness, Gregory Russo, who works as the managing director for a consulting firm called Berkeley Research Group.
“The order simply means that now we will proceed to a transparent hearing where we can lay out our case and present our evidence in full view of the public,” Folwell said in a statement to North State Journal. “We are confident we will prevail on the merits.”
“It is unfortunate that the other party in the case has chosen an ill-considered approach of “sue till you’re blue” whose costs will be borne by those who teach, protect and serve, and taxpayers like them,” said Folwell. “Since the State Health Plan’s decision to choose Aetna as its third-party administrator, Truist Financial and the N.C. League of Municipalities made the same choice.”
“Aetna was awarded the North Carolina State Health Plan contract because our bid was deemed superior to other carriers based upon the requirements and scoring set forth by the State Health Plan,” an Aetna media spokesperson said in response to a request for comment. “We’re incredibly excited to begin serving the State Health Plan next year, and we are already more than a year into our full-scale implementation effort.”
BCBSNC, through a spokesperson, also issued a statement to North State Journal.
“We are pleased with the decision and look forward to opportunity to share more details about why Blue Cross NC’s proposal was the best deal for the state,” the BCBSNC statement says. “Our proposal would save tens of millions of dollars and provide the strongest network with more providers, especially in our rural communities. Serious errors were made in a procurement with significant ramifications for State Health Plan members.”
“Those who serve our state every day – teachers, law enforcement officers and health care workers – will pay the price for the State Health Plan’s errors. Additional details on the errors and distorted scoring in the process, as well as the failure to compare the bidders’ networks of providers in any detail, will be presented at the February hearing,” according to BCBSNC’s statement.
The BCBSNC statement also said, “State Health Plan members and the public deserve to see all the details about the Plan’s process. We will continue following the legal process to ensure the best outcome for teachers, state employees and taxpayers.”
Early in January 2023, Folwell announced Aetna as the State Health Plan’s new TPA. BCBSNC had been the Third Party administrator for around 40 years at the time of the announcement.
BCBSNC and United Healthcare, which were both involved in the bidding for the contract, filed protest challenges on Jan. 12 and 13, respectively. The State Health Plan rejected those challenges on Jan. 20, 2023.
Legal challenges from both BCBSNC and UnitedHealthcare were made the following month and at the time, Folwell reacted by saying he was “disappointed but not surprised.”
UnitedHealthcare dropped its protest appeal in April 2023.
The case is far from over, with additional hearings in the case to be held on Feb. 13-16 and 19-23 at the Office of Administrative Hearings in Raleigh.
