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State defends decision to cut out Blue Cross

Mirrored here for historical purposes from:

The Atlanta Journal-Constitution
Published on: 07/26/08

The Georgia Department of Community Health denied allegations Friday by Blue Cross and Blue Shield of Georgia that state officials failed to follow established rules in deciding in May to reduce the number of insurers that cover nearly 700,000 teachers and other state employees and their dependents.

The state eliminated Blue Cross and Blue Shield of Georgia as an insurance provider, along with Kaiser.

Blue Cross and Blue Shield of Georgia said it had determined that the department's decision to reduce insurer options to Cigna and United Healthcare illegally cut out Blue Cross and Blue Shield of Georgia and Kaiser, but DCH spokeswoman Matia Edwards denied the claim.

She said the decision to reduce the number of insurance provider options would save the state plan more than $700 million over five years.

"Part of this strategy was a competitive procurement to select two health plans, based primarily on program quality, access to providers statewide and sustainable year-over-year savings," she said.

Nancy Goldstein, division chief of the State Health Benefit Plan, said the decision "aligns with feedback from our members who value quality health care and strong access to health care providers in their community."

More than half of the affected state employees live outside the Atlanta area, "so providing greater access throughout the state has been a top priority," Goldstein said.

The decision was based on questions of quality and access to providers, she said, and Blue Cross placed fourth in a bidding process. The state began cost negotiations with the top two bidders, which led to a savings of $108 million from the original bids, Edwards said.

She said the state complied with DCH policies regarding the purchase of insurance that "emphasizes quality and access while still factoring in cost savings. This policy allows any bidder to appeal the procurement outcome. Efforts by any company to secure a state contract outside the rules of the competitive procurement process are not acceptable."


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