State Health Plan releases all documents related to third-party contract change

RALEIGH — All documents related to the change from Blue Cross Blue Shield NC to Aetna as the State Health Plan’s third-party administrative services contract (TPA) are now publicly available.

Last week, the State Health Plan (SHP) published all of the materials, including requests for proposals (RFP) and the responses, on a specially created transparency page on its website.

“We are the most transparent and open agency in state government,” Treasurer Dale Folwell said in a statement. “I cannot be prouder of the work done by the staff of the State Health Plan and the bipartisan State Health Plan Board of Trustees. This contract doesn’t change the body or engine of the State Health Plan; it is just a modernization of the transmission. We look forward to Blue Cross finishing their current contract strong and facilitating a seamless transition to Aetna.”

The documents on the transparency page include details on the procurement process that led to the change in the contract as well as a timeline of events surrounding the move to Aetna.

The repository of documents has already revealed differences in how Aetna and Blue Cross responded to the RFP, which has ramifications for patient billing and transparency.

One of the RFP requirements related to the assignment of benefits payments states, “Upon request, Vendor will pay all claims, including non-network claims, based on the assignment of benefits.” On that item, Blue Cross checked “no,” while Aetna checked “yes.”

In other words, Blue Cross pays the patient directly instead of sending payment to an out-of-network provider.

That practice has been criticized as a means of funneling subscribers to Blue Cross’ preferred providers, but also for creating a potentially bad situation where patients are sent a check but end up spending that cash on things other than treatments or surgeries.

During a Feb. 7 call with media, Folwell noted that his office had received a number of records requests for the documents. He said the production of records and posting of the materials online had been held up by the entities protesting the contract change; Blue Cross and UMR, Inc. The treasurer said his office had been in a holding pattern while waiting for those groups to make redactions. 

“ I don’t think there’s been any other state agency who was responded this completely in this quickly to these inquiries as we’re about to today,” Folwell told North State Journal during the media call. “And I think it’ll present a lot of sunshine to folks like you who will really have a full understanding of how this process has gone down over the last year or so.”

Last December, the State Health Plan Board of Trustees voted unanimously to award the TPA contract to Aetna. The contract is for a three-year service period beginning Jan. 1, 2025, through Dec. 31, 2027. The contract has an option for two, one-year renewal terms. Until Aetna takes over, Blue Cross Blue Shield North Carolina will continue to be the Plan’s claims processor.

The move to Aetna was announced in early January, with Folwell’s office estimating $140 million in administrative savings with the move and that a partnership with Aetna will lower costs and provide better transparency.

Blue Cross Blue Shield NC and UMR, Inc. both filed protests over the change, which were rejected by the SHP. Future legal action is likely based on statements made by both of the protesting parties.

The State Health Plan covers some 740,000 state employees, teachers and retirees and is a division of the Department of State Treasurer.

By A.P. Dillon

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