Meritain filed the protest after the commission voted 6-2 last month to award a bid to Blue Cross Blue Shield of Georgia, the city’s current provider of health insurance coverage, to become the third-party administrator for a new self-funded pool.
Atlanta attorney Jeff Belkin, one of several attorneys representing Meritain, pointed out that Meritain’s proposal scored far higher in the city procurement office’s second phase technical evaluation, with a 97.64 to Blue Cross Blue Shield’s 70.92, and had a lower likely overall cost than BCBS.
He also pointed to a math error, the use of two different figures for the number of covered employees and the omission of BCBS’s $504,000 annual fee in a cost comparison.
Further, as incumbent provider, BCBS had an advantage because it “has claims data all the way through today,” Belkin said, and as a result, “the most competitive stop-loss proposal.”
Under the self-funded pool, the city will collect health insurance premiums and use them to pay claims, with a stop-loss policy in place to cover large, unexpected claims.
City Procurement Director Geri Sams stood by her committee’s recommendation of BCBS and the process used to make it. She said Meritain was the only one of the four bidders to have difficulty meeting the city’s requirements for a “no laser” stop-loss policy, both at the policy’s inception and renewal. “No lasers” means a provider cannot drop or adjust an individual employee’s policy at the time it starts or is renewed.
Only shortly after the city’s “best and final” deadline did Meritain respond with a specific quote on a no-laser policy at inception. Until then the company had relegated employees to “two buckets,” those with the potential to have costly health claims and those without, Sams said.
“What they were bringing to the table was different from what Augusta-Richmond County asked for,” Sams said.
Until the no-laser issue arose, “Aetna was our choice” based on the technical rankings, Sams said.
Lisa Kelley, a city consultant from Wells Fargo Insurance Services, said the result of negotiations with BCBS was lower guaranteed total maximum costs, including administrative and other fixed costs, of $22.9 million for three years. She said for a city making the switch to self-insured, guaranteed maximum costs are more important.
“It all goes to risk and reward. The risk is not something you want to absorb the first year,” Kelley said.
BCBS also offers larger network discounts, even after retaining a percentage, at 59 percent, versus Aetna’s 55 percent discount, she said.
Meritain’s request for six months of claims data to prepare a no-laser at inception stop-loss quote was unreasonable, she said, while BCBS’ advantage as “incumbent” health insurance provider simply cannot be escaped.
Commissioner Alvin Mason said Meritain’s high technical score was significant. After previously calling attention to Kelley’s personal relationship with a Savannah BCBS representative, something she declared early in the process, Mason said her presence Monday “unnerved” him.
“It’s an observation by a person that does procurement for the federal government for a living,” he said.
A “good value” measure meant paying attention to Meritain’s high score, Mason said.
“Nobody has disputed the fact that clearly, without question, they not only met, but far exceeded by some 30 points, 33 percent or whatever, the other proposed offerers,” he said.
Going self-funded with BCBS is expected to save the city more than $1 million over what it pays BCBS now. It would go into effect Jan. 1.
The committee members could have voted Monday on the bid protest but left the decision to the full commission, which will likely vote on the matter at its regular meeting today.
Only Commissioners Mason, Jerry Brigham, and Bill Lockett stayed for the entire two-hour hearing, although Mayor Deke Copenhaver and Commissioners Wayne Guilfoyle and J.R. Hatney listened for parts of it.
Guilfoyle said knowing the city’s precise exposure was important, but not as much as the health insurance that covers employees and their dependents.
“We’re playing with 10,000 people’s lives,” he said. “I’m not going to jeopardize somebody’s health insurance.”