Richmond County Superior Court Judge David Roper blasted the Augusta Commission and city procurement department in a Wednesday order demanding the city re-bid its new employee health insurance contract.
Roper’s order instructs the city to seek new bids from insurance providers for a contract to start Jan. 1 and terminate its existing agreement with Blue Cross Blue Shield of Georgia at that time, to ensure no interruption of coverage for the city’s 2,400 employees and their families.
The order comes in response to a lawsuit filed by Aetna subsidiary Meritain Health over Augusta’s award of the contract to administer a new self-funded health insurance pool, valued in excess of $20 million, to Blue Cross, the city’s existing provider.
Meritain protested the bid award last year, but the commission voted to deny the company’s protest and gave the contract to Blue Cross, on the recommendation of an internal selection committee that included Procurement Director Geri Sams and Wells Fargo insurance consultant Lisa Kelley.
Meritain alleged that procurement engaged in “11th hour” manipulation of the bid award, changing contract terms and ranking criteria to benefit Blue Cross, and Roper agreed.
“Simply put, Ms. Sams, Ms. Kelley and the selection committee changed the rules at the 11th hour to require no lasering at inception, and decided that Total Maximum Costs was the driving factor,” he wrote.
“No lasering” refers to an insurance practice that divides employees into low- and high-risk groups, covering each differently.
When the “no lasering” requirement was introduced, Aetna vice president of public sector sales Marcus Duckworth complained in two e-mails that only Blue Cross had access to recent claims data to formulate an accurate bid.
“The court finds that Meritain was prejudiced thereby,” Roper said.
He also points to Kelley’s romantic involvement with Blue Cross sales representative Mark Dukes throughout the process, citing Commissioner Alvin Mason’s questioning of Kelley about the relationship during commission meetings.
“I find it difficult to swallow that the one consultant that we have has a relationship with Blue Cross Blue Shield in this manner,” Mason said, citing the appearance of a conflict.
From there, Sams failed to provide a written report about why Blue Cross was the chosen bidder, and commissioners had scant evidence to consider when they voted 6-3 on Dec. 5 to deny Meritain’s protest.
City Administrator Fred Russell, who was named in Meritain’s original complaint, said Wednesday that he was unaware of the judge’s order and recalled little of last year’s insurance bid protest.
City General Counsel Andrew MacKenzie declined to comment on the pending litigation, but did note the order provided for no lapse in insurance coverage.
“It’s hard to predict what will happen in these cases,” he said.