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Blue Cross Protesting Award of Texas Employee Retirement Health Plan to United Healthcare–Price Cut by $25 Million With Li

Posted Mar 06 2012 3:21am

Well right off the bat the article states they will lose any out of network protection that Blue Cross had given so I would imagine that could be part of the cost savings in the final decision here.  This has been going on in other states too with United coming in less expensive, as they have all the algorithms and subsidiaries to project costs.  In addition there was speculation that a Governor Rick Perry aide had his hand in the hat here as he is a lobbyist for United Healthcare.  Here’s what’s going on in Nebraska with the two insurers.  image

In Kansas, Blue Cross who is the largest in that state decided not to even bid, and again when up against the mighty subsidiary powers Untied has been able to bring in profit dollars from so many different areas from introducing a drug to the FDA all the way down to physician reimbursement.  If they don’t get the contract then lawsuits appear to be a route that United takes.

Update: UnitedHealthcare Sues Department of Defense Over Tri-Care Contracts–They Said They Would Do This – Is This A Case Of My Algorithms Are Better Than Yours?

Doctors and hospitals also have the new contracts to work with and with the way some of these are written today, complex and varied, it’s not unusual to see some area of reimbursement being less than what is billed for Medicare, worries many MDs. 

United Healthcare Preparing to Roll Out New Contracts To Pay Doctors& Hospitals For Meeting Goals and Keeping Costs Down– Plenty of Subsidiaries to Provide Some of the Technology And/Or Products & Generate Income–Subsidiary Watch

You do sometimes wonder how subsidiaries benefit with big corporate conglomerates too as with selling 3 different medical records systems, all types of other analytics, does this end up being yet one more opportunity to gain more market share in the IT end of the business too. 

Recently with buying IPAs and HMOs as well one does wonder about the strategies and of United makes a ton of money selling all kinds of data too and this is one area to where they kind of walk on the others as they were licensing and selling their software way back that lead to the AMA lawsuit for short paying out of network charges and most all the other insurers used United’s numbers.  The low balled numbers for out of network charges ended up with the class action lawsuit settlement and there are still quite a few unsettled lawsuits out there against Untied and other carriers who used the low balled rates as proven by Governor Cuomo of New York. 

Subsidiary Watch-Corporate Conglomerate Insurers Reduce Compensation Contracts Using One Subsidiary Then Market Same MDs With Another Subsidiary in Health IT

United sold the clinical trials company i3 last year and reorganized some of their other business units to include Innovus, Quality Metric, Pharma Informatics, Drug Safety/Epidemiology, along with the canReg and ChinaGate Regulatory Consulting businesses into a network of global consulting services. 

canReg is another United subsidiary that consults to introduce a drug or device to the FDA and assist with regulatory processes in that area and has around 100 employees in the US, Canada Europe and Asia. 

This will be interesting to watch to see what Blue Cross does here as Untied is rapidly becoming one big health insurance behemoth with the truckloads of subsidiaries and the bank they own and one starts to wonder when there just might be some conflicts of interest that could arise with as varied as the portfolio has become with being able to control so many big chunks of the US healthcare system in several areas.  BD

A three-decade streak for Blue Cross Blue Shield of Texas came to an unexpected end two weeks ago when the board that oversees the state's employee health plan awarded a key contract to a different company.

But Blue Cross made clear Monday that it would not go away without a fight.

The company filed a formal protest with the Employees Retirement System of Texas and wants a review of the competitive process used to award the contract. ERS executives will examine the protest and decide on its merits.

Late last month, the six-member ERS board voted unanimously to give United HealthCare Services Inc. a four-year, $204.8 million contract to run the administrative side of the health plan, such as processing claims.

The United proposal came in $25 million less than Blue Cross' and, the company also estimated it could save the state an additional $14 million on health care.

Under the new contract, which is scheduled to begin Sept. 1, about 10,000, or 2.7 percent of the state plan's participants, would need to find a new primary care physician within the United network or pay the higher out-of-network costs, according to ERS.

Members who use out-of-network providers would also lose a cost protection they had under the Blue Cross contract. ERS estimates that 16,000 participants would bear an additional $10 million in costs by using those outside providers.


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