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Closing arguments in legal battle over city employees' health insurance fund

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The legal battle over which company will manage Augusta city employees’ self-insured health insurance fund entered into the closing rounds Friday.

Attorneys from two nationally recognized legal firms with offices in Atlanta joined arguments on the appeal filed by Aetna subsidiary Meritain Health after city commissioners awarded the lucrative contract to Blue Cross Blue Shield in October.

Commissioners decided to become self-insured last year for financial concerns, and a request for proposals was developed to find the best company to manage the fund.

Blue Cross Blue Shield, Meritain and two other companies submitted proposals. After an evaluation committee conducted interviews and judged each company on technical merits, Meritain was on top, and when the price section of the bids were opened, Meritain had the lowest price. However, the city then asked the companies to provide another price that would show the city the potential liability if every person covered by the plan experienced the worst-case scenario. That information led Procurement Director Geri Sams’ selection committee to choose Blue Cross Blue Shield.

On Friday, Jeffrey Belkin, of the Alston and Bird firm, and local attorney William Keogh III tried to persuade the judge that the city violated state law and the city’s own purchasing ordinance not only in the way Blue Cross Blue Shield replaced Meritain as the top choice, but in the process used to reject Meritain’s bid protest.

Jody Smitherman of the city’s law department was joined by Blue Cross Blue Shield’s attorneys James Hollis and Mike Bowers – of the Atlanta office of the Balch and Bingham firm – in countering that the city’s bid process and evaluation of the bid protest was reasonable, done in the best interest of the city, and within all laws and city ordinance.

“I know why Blue Cross Blue Shield was picked and there were very good reasons for that,” Hollis said. The company is not a defendant in the lawsuit Meritain filed but as an interested party, it is allowed to join in the city’s defense.

Judge J. David Roper tried to focus both sides on Meritain’s contention that the city’s bid protest procedure denies basic due process.

Smitherman argued that the city’s administrative services committee heard from Sams, the city’s consultant on the health insurance bid, and from Meritain. It was a public meeting any commissioner or citizen could attend. At a later meeting, the full commission voted to deny Meritain’s protest.

The commission was acting in a legislative capacity and had no obligation of due process, Hollis added.

But, Belkin countered, when the city code sets the commission up in a quasi-judicial capacity to judge the merits of a bid protester’s case, it must act in a judicial manner – conduct a fair and open hearing where witnesses testify and are cross examined.

Roper quizzed the city’s attorneys on what the commissioners had to base their decision to deny Meritain’s bid protest. Commissioners didn’t have any recommendation from the committee which first considered the protest. And commissioners didn’t listen to witnesses or any public comment before denying Meritain’s bid protest.

Roper took the case under advisement.

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Little Lamb
Little Lamb 05/10/13 - 08:58 pm
It is time . . .

. . . for Geri Sams to be shown the door.

It is perfectly okay with me if Fred (What, me worry?) Russell follows her.

faithson 05/11/13 - 11:01 am

simple but true on Sams...

ragingbull 05/11/13 - 11:51 am
I think she is protected

I think she is protected under affirmative action.

tabbydot 05/13/13 - 02:49 pm
I know why they picked BCGA

I know why they picked BCGA over Meritain. They know a good ins co when they see one. I have been doing ins billing/collecting for 26 years, our office cringes at the thought of billing Aetna/Meritain: they almost always deny claims on the 1st mailing, if they pay, they pay wrong. Their reps at the other end can't speak English and cannot help you get your legitimate claim paid, it's a nightmare. BCGA is far superior in my world, the city would really regret going with Meritain in the end.

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