• Limited information and arbitrary scoring were used to determine health care access for 580,000 North Carolina teachers, state employees and their families.
• Blue Cross NC’s network of provider locations statewide appears to be 38% larger than the selected vendor, and Blue Cross NC bid the lowest administrative fee of any bidder.
• Blue Cross NC has been waiting for response on public records request for more information for four weeks.
• Blue Cross NC releases the formal protest letter, the Request for Proposal and a comparison of the 2019 and 2022 RFPs.
 

DURHAM, N.C. – Blue Cross and Blue Shield of North Carolina (Blue Cross NC) today submitted its formal protest of the North Carolina State Health Plan’s decision to award the 2025-2027 contract for third-party administrative services to Aetna. The protest cites the simplistic RFP, or bid process, which represented a significant departure from the State Health Plan’s previous procurement and contracting process. The protest highlights the limited information and distorted scoring system used during the decision-making process.

The company submitted public records requests on December 15th and December 20th to better understand the State Health Plan’s decision.

“Blue Cross NC is proud of our long record of serving North Carolina’s teachers, state employees, first responders, county and city employees, and their families,” said Dr. Tunde Sotunde, president and CEO of Blue Cross NC. “State Health Plan members are more than customers, they are our neighbors, our friends and our family, and we have filed this protest to ensure the best outcome for them, for taxpayers, and for our state.”

Blue Cross NC’s main concerns center around the implications for State Health Plan members’ health care, the new RFP process and scoring system, and the impact to North Carolina.

Implications for Members

State Health Plan members have expressed concerns about maintaining access to their doctors. Yet, the RFP process did not score each proposed vendor’s network of providers, and the process did not consider the possible disruption to members’ access to health care providers. Based on a preliminary review of publicly available information, Blue Cross NC’s statewide network of total provider locations appears to be 38% larger than Aetna’s. A smaller network could result in a significant number of teachers and state employees across the state to change doctors they’ve built relationships with for years and travel farther for in-network care.

Additionally, Blue Cross NC bid the lowest administrative fee of any bidder.

Simplistic RFP Process

The 2022 RFP process also failed to capture other critical information, by:

  • Relying on simplistic yes/no questions and prohibiting explanations of capabilities or the ability to provide helpful context.
    • For example, on cost issues, the 2022 RFP replaced the Plan’s 2019 more robust scoring method with vague standards. Specifically, the 2019 RFP evaluated cost based on a 10,000-point-scale, while the 2022 RFP used just a 10-point scale.
    • Also, finalist presentations were not included in the 2022 RFP process.
  • Oversimplifying the criteria used to assess the technical expertise of each company.
    • For example, the 10,000-point-scale used in 2019 to rate technical expertise was reduced to just a 310-point-scale.
  • Neglecting to appropriately weight requirements.
    • For example, every response to a technical requirement was treated as identical in importance.

Impact to North Carolina

The 2022 RFP removed any preference for companies that have resources in North Carolina. As a North Carolina not-for-profit company, Blue Cross NC is headquartered in the state, supports North Carolina jobs and does not have shareholders. In fact, Blue Cross NC employs hundreds of North Carolinians directly serving the State Health Plan.

As part of its protest filing today, Blue Cross NC is releasing:

Additional documents and information relating to the decision have been requested through public records requests submitted to the State Treasurer’s Office on December 15 and December 20, 2022. The State Health Plan has not committed to a specific timeline for response.

“Blue Cross NC’s focus will remain on providing the highest level of service to the State Health Plan members it is honored to serve,” Sotunde said.

Timeline

  • August 20, 2022 – RFP issued by State Health Plan
  • September 26, 2022 – Deadline set by RFP for vendors to submit responses to certain minimum requirements
  • November 7, 2022 – Blue Cross NC, Aetna, and United Healthcare submitted proposals
  • December 14, 2022 – State Health Plan notified Blue Cross NC that Aetna was selected as Third-Party Administrator
  • December 15, 2022 – Blue Cross NC submitted first public records request
  • December 16, 2022 – Post-award meeting with State Health Plan
  • December 20, 2022 – Blue Cross NC submitted second public records request
  • January 4, 2023 – Treasurer announced selection of Third-Party Administrator
  • January 12, 2023 – Blue Cross NC submitted protest letter

About Blue Cross and Blue Shield of North Carolina:

Blue Cross and Blue Shield of North Carolina (Blue Cross NC), the leading not-for-profit health plan in North Carolina, is committed to making health care more affordable, easier to navigate and accessible for all. Since 1933, the health insurer has created programs and initiatives to provide North Carolinians the opportunity to be healthy. Blue Cross NC serves its customers and communities of more than 4.2 million members, including approximately 1.1 million on behalf of other Blue Plans. Blue Cross NC is an independent licensee of the Blue Cross and Blue Shield Association. Visit Blue Cross NC online at www.bluecrossnc.com. All other marks are the property of their respective owners.

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