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Thursday, June 27, 2013

Procurement controversy -- Augusta, Georgia, USA

Judge orders city to rebid employee health insurance contract
Aetna subsidiary Meritain Health protested the bid award last year, but the commission voted to deny the company’s protest and gave the contract to Blue Cross. 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. 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 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.

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