State of Louisiana Rejects United Healthcare’s Protest Over Awarding Blue Cross/Blue Shield Contract To Manage State Emplo
Posted Aug 24 2012 2:34am
Here we go again with contract disputes. United said they were cheaper and have better costing algorithms. They can appeal to the insurance commissioner as a next step so it’s wait and see time here with this aware. Of course this is not as big as the Tri-Care contract to where United sued to get that contract. So what will they do next if the appeal is not successful, sue? A few months ago the company hired the former Assistant Attorney General of Minnesota as general counsel so were they anticipating lawsuits over contract disputes? Actually with the Tri-Care contract it appears that the loss by the Blue Cross subsidiary Tri-West is going to put them out of business in April when United takes over and who knows what subsidiaries of the subsidiary Tri-West United could gobble up and buy between now and then.
Actually when it comes to contracts United uses their formulas and algorithms for cost to go to battle with and not that the others don’t, they have more of them with the huge daisy chains of companies they have bought and started over the last few years. As a matter of fact United hired the former HHS executive credited for writing most of the Healthcare reform law and so now he’s a VP at the United Healthcare Optum division. I kind of look at it this way when someone goes over to the other side today and the same holds true for investment banks is that they all want the information as to what was and is going on with the other side, in this case the government. By the way United also does own a bank speaking on that topic with over a billion on deposit.
Is this company getting a little too big? Good question with all the diversified entities they own as they can almost get a cut of healthcare transactions everywhere you turn today as if it’s not analytics it’s from the HMOs and IPAs they bought. They seem to attack the competition with their code, algorithms and analytics used and again remember these folks are traded on the stock markets so shareholders, even as the CEO said are of utmost importance, so hopefully patients might fit in here too? No doubt by getting big contracts as such it allows for subsidiaries to make money and prosper and put more money on the United Corporate bottom line.
United has subsidiaries that sell electronic medical records too, I think about 3 of them so they are in that business as well as HIE. Theoretically if the company and subsidiaries were successful in each avenue of getting a drug to market they could handle it from the beginning with the introduction to the FDA via consulting services all the way down to reimbursement. So you do wonder at times as you know they maximize their use of data if the data runs between subsidiaries to give leads to other parts of the conglomerate to rush in for a sale? An example would be contract cuts for doctors and then another division could rush in to sell them software to be more efficient..think that happens out there? They also just created a new clearinghouse subsidiary to work with Epic medical records.
So I guess we wait and see if this #37 million dollars worth of business is worth an appeal or maybe yet a lawsuit substantiating they have better algorithms to get the contract. In Texas Blue Cross is protesting the award to United for the Texas Employee Retirement benefits and it left participants with little or not out of network services with United. The two companies duked it out in Nebraska and I believe it was in Kansas that Blue Cross gave up competing due to the low ball rates proposed by United. Anyway in some areas where they protest and sue it seems they are getting contracts and one wonders is this fair? It sure is happening quite frequently today and there’s other examples around but these are the most noticeable at State levels. BD
BATON ROUGE, La. — 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.
United Healthcare's next remedy is to file an appeal with Commissioner of Administration Paul Rainwater, who is Gov. Bobby Jindal's chief budget adviser.
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.