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Dec 16, 2010 9:34 AM by Nichole Larkey

Judge invalidates state contract to Blue Cross

BATON ROUGE, La. (AP) - A judge Wednesday invalidated a contract the state awarded to Blue Cross and Blue Shield of Louisiana to administer the HMO plan for state workers, retirees and their
dependents.
State District Judge Mike Caldwell agreed with attorneys for Humana and UnitedHealthcare that the contract awarded earlier this year to Blue Cross was not the contract that was bid upon.
Caldwell told attorneys involved in the case that he doesn't know what the effect of his ruling will be, but added, "I'm sure I'm going to see more of it (the case)."
Wendell Clark, an attorney for the state Office of Group Benefits, stressed after court that the judge's decision won't affect an emergency contract in effect for several months.
"The current coverage is in place," he said.
As for Group Benefit's next move, Clark said, "I'll have to visit with my client."
"We obviously disagree" with the judge's ruling, Blue Cross attorney Brandon Black added.
Humana attorney Phil Franco said the 90-day emergency contract issued July 1 and later renewed for another three months is the "exact same contract" Caldwell invalidated.
"We'll have to take a look at that," Franco said.
Group Benefits has traditionally offered a statewide health maintenance organization plan and a nationwide exclusive provider organization plan, or EPO, to eligible state employees, retirees and their dependents.
Humana had held the HMO contract for 20 years. UnitedHealthcare
previously held a contract with the state to administer the EPO.
The HMO covers more than 114,000 employees, retirees and their dependents. The EPO covers 37,000-plus workers, retirees and dependents.
Group Benefits sought proposals in the fall of 2009 from
companies interested in administering the HMO and EPO plans.
Humana and UnitedHealthcare claim in lawsuits that Group Benefits specifically stated it was seeking someone to administer the HMO "on a statewide basis." The suits contend nationwide networks were not sought.
When Blue Cross was awarded the HMO contract over Humana and UnitedHealthcare, the suits allege, Group Benefits Chief Executive Officer Tommy Teague sent a letter stating the office had decided
to withdraw the EPO.
Teague explained in the letter that because Blue Cross was offering a nationwide network as part of its HMO proposal, it was unnecessary to offer the EPO plan to Group Benefit's members, the
suits say.
Teague testified earlier this year in Caldwell's court that Group Benefits was folding the EPO plan into the HMO plan.
Attorneys for Humana and UnitedHealthcare contend that bidders were deprived of the opportunity to bid on a consolidated HMO/EPO
contract.
"The contract awarded was not the contract bid upon," Caldwell said Wednesday in his ruling from the bench.
In June, the judge ordered the state to reconsider its award of the HMO contract to Blue Cross. The state ultimately decided to stand by its decision.
Caldwell said Wednesday he was reversing the state's upholding of the validity of the contract.

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