Team Folwell dumps Blue Cross NC, adds Aetna on state health plan

If you deal with the state health plan, it’s time to get real familiar with Aetna:

State Treasurer Dale R. Folwell, CPA, and the State Health Plan (Plan) today announced the award of the Third-Party Administrative (TPA) Services Contract to Aetna.The Plan consists of nearly 740,000 teachers, state employees, retirees and their dependents. The administrative contract, awarded by the State Health Plan Board of Trustees, oversees health care spending of more than $17.5 billion over five years. The new contract reflects a partnership that focuses on transparency and lower costs, with the potential administrative cost savings over the course of the contract equaling $140 million. 

The three-year initial service period for the contract begins Jan. 1, 2025, and continues through Dec. 31, 2027, with the option to renew for two, one-year terms.

The award is the result of a Request for Proposals, a competitive bid process in which the Plan solicited and selected industry-leading partners providing exceptional customer service, technological resources and professional support. The services under the contract include processing claims and offering a comprehensive network of health care providers. Blue Cross and Blue Shield of North Carolina (Blue Cross NC) is the current TPA for the Plan and has been the TPA for over 40 years.

“We appreciate the years of service that Blue Cross NC has given our members. I’ve spoken with Blue Cross President and CEO Tunde Sotunde, M.D., and Board Chair Ned Curran, and they assure me that they will finish strong for the next two years,” Treasurer Folwell said.

“Partnering with Aetna, which already employs over 10,000 people in North Carolina, will create a lot of new opportunities for the Plan and the members we serve. A change of this magnitude is a great opportunity for a fresh perspective, and we look forward to working closely with Aetna to create new ways to provide price transparency, increase access and quality while lowering the cost of health care for those who teach, protect and serve, and taxpayers like them.”

Aetna was one of three companies bidding for the contract. Blue Cross NC and UMR, Inc. also submitted proposals.

Starting today, nearly 600 Aetna employees have been assigned to work on this transition with State Health Plan Director Sam Watts for the next two years. Aetna will be working diligently, in close collaboration with Plan staff and multiple vendors, to develop comprehensive plans and processes, systems and platforms to ensure members will enjoy a seamless transition when its services roll out.

Plan members will start receiving more information regarding the changes in 2024 prior to Open Enrollment for the 2025 benefit year. […]

It sounds like Blue Cross NC is not going away quietly into the night:

[…] Blue Cross takes in several million dollars per month as part of the contract, according to the health plan. Folwell and the plan said in a news release that the Aetna contract could result in $140 million in cost savings should it extend to five years. […]

Blue Cross said it was “deeply disappointed” by the State Health Plan’s decision, saying it “threatens North Carolina jobs.” The company also said it would seek more information through a public records request. 

The State Health Plan attempted to counter any narrative about lost jobs. The news release said Aetna already employees over 10,000 workers in the state, and that 600 employees were assigned Wednesday to work on the transition with interim plan director Sam Watts. Plan members won’t have to be consider changes until 2024, before the 2025 enrollment period begins. […]

While the plan wields great weight in health care in North Carolina, Folwell and others have been frustrated at times with Blue Cross’ administration, accusing it of opaque decision-making. 

Blue Cross has said some records on plan member claims that Folwell has wanted would put the company at a competitive disadvantage. Compromise state legislation approved in 2022 could help the State Health Plan work out better financial agreements with health care providers. […]