The North Carolina State Health Plan announced in a press release on Friday that it had rejected protest appeals for the Third-Party Administrative Services (TPA) contract from Blue Cross Blue Shield of North Carolina and UMR, Inc. 

An announcement was made earlier this month that Aetna had been awarded the SHP contract. The change is significant because BCBSNC has been the TPA for more than 40 years. Both BCBSNC and UMR, Inc. said they would appeal the decision. 

State Treasurer Dale Folwell said in the press release that after finding that the assertions made by both losing bidders were without merit, the plan’s interim executive director, Sam Watts, notified both bidders that their appeals had been rejected. The release said that this concludes the protest process, and the plan is moving forward under the new contract with Aetna.

“Responding to a Request for Proposal (RFP) is completely voluntary,” said Watts. “Arguing that if the questions were asked in a different way or graded differently the outcome would have been different is not how procurement works.” 

The award of the TPA contract is the result of an RFP, a competitive bid process that the plan uses every three to five years to choose a TPA. The release said issuing an RFP is not new, and it is not guaranteed that incumbents always win. Under the plan’s authority outlined in state law, it modernized the RFP process for all procurements to remove subjectivity from the process. 

Folwell said a key goal of modernizing the RFP process was to ensure fairness, equity, and objectivity and to ensure the selected vendor is willing and able to meet the priorities and requirements of the plan and the RFP without exceptions. 

Early last year, Folwell said the methodology and questions in the RFP were thoroughly explained to all bidders prior to it being issued and any bids being received. Plan staff reviewed each response in accordance with the criteria outlined in the RFP. After scoring and evaluation were completed by professional staff, the bipartisan State Health Plan’s Board of Trustees — consisting of members appointed by the governor, president pro-tempore of the Senate, speaker of the House, and the treasurer — all unanimously voted to award the contract to Aetna.

Folwell stressed that BCBS has never set premiums or determined what benefits are covered, but the plan’s Board of Trustees has the authority to do that. Plans that are already in place will not be impacted. That includes premiums, copays, and deductibles.

“It’s embarrassing to see entities trying to confuse our members by falsely advertising information regarding Plan benefits, which only leads to unnecessary member confusion,” Folwell said. “I’m proud of what the staff accomplished in the RFP process and the decision of the board. It is disappointing and unfortunate that others have used this as an opportunity to attack our integrity and carry out malicious accusations against the Board of Trustees and the professional staff of the State Health Plan.”

“Blue Cross NC believes that its bid to the State Health Plan serves the best interests of the Plan’s members,” said Sara Lang, a spokesperson for BCBSNC, in an emailed response. “The Plan’s response to Blue Cross NC’s protest leaves too many unanswered questions about how this change will affect costs and access to care for state employees and teachers. We are disappointed that the Plan has refused to disclose any documents about its RFP process, despite our public records requests a month ago.”

Lang said BCBSNC would continue to pursue efforts to ensure the best outcome for teachers, state employees, and North Carolina taxpayers.

BCBSNC said in their protest that the proposal evaluations were based on “arbitrary criteria and a distorted scoring system,” BCBSNC’s objections to the award centered on changes to the evaluation criteria since the 2019 RFP cycle. According to the submission, cost criteria changed from a 10,000-point scale to a 10-point scale. For the 310 technical questions in the RFP, answers could only be “yes/no.” According to the protest, bidders were not allowed to submit narrative answers in 2022, as they were in 2019.

BCBSNC also took issue with how Folwell described the role a TPA played as a “back-office” one and said the role they played was more of a central one that helped define a member’s benefits. 

The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to nearly 740,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.