Legal challenge continues over city's choice to manage health insurance fund

The insurance company whose protest failed to convince Augusta commissioners to change their decision to award a lucrative contract to Blue Cross Blue Shield will pursue its challenge in court.


In papers filed just before Christmas, Aetna subsidiary Meritain Health requested an order from the Richmond County Superior Court to force the city’s procurement office to terminate its recent contract with Blue Cross Blue Shield to administer the city’s self-insured health care insurance fund for city employees.

Commissioners opted in 2012 to become self-insured because of the rising cost of providing health insurance to approximately 2,200 employees. The role of third party administrator for the fund, over $20 million annually, was a job put out for bid.

Meritain, Blue Cross Blue Shield and two other companies presented proposals to oversee the fund. According to city documents and Meritain’s lawsuit, the city’s selection committee judged Meritain to be the highest qualified at the lowest cost.

Instead of taking commissioners those results for a vote, the procurement department asked the companies to provide additional information and price quote for the possibility of a worst-case scenario for each employee. Meritain called the procedure unfair and contrary to state law and city purchasing ordinances, but the city contended in court last month that it was done because commissioners were most concerned about the city’s maximum potential liability.

Afterward, Blue Cross Blue Shield was judged to be the best choice for the city because, city officials said last month, Meritain was found to have had additional expenses not included in its price.

Meritain contends in the most recent court documents, filed Dec. 20, that the procurement department’s cost estimate for Blue Cross Blue Shield’s services was in error by more than $900,000.

The city should file its response to the newest legal challenge this month.

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