Blue Cross Blue Shield (BCBS) of North Carolina has been asked to reimburse the state’s residents $2.05 million following a legal challenge over the North Carolina State Health Plan’s contract with Aetna, according to a letter from State Treasurer Dale Folwell.
In the letter addressed to BCBS president Tunde Sotunde, Folwell stated that the State Health Plan awarded the contract to Aetna through a procurement process he described as thorough and appropriate. He added that the plan’s board had duly approved Aetna’s bid.
BCBS of North Carolina filed a lawsuit alleging that the board acted arbitrarily and failed to follow proper procedures during the selection process for the plan administrator. However, in July, a judge ruled that the board acted within its authority in awarding the contract to Aetna.
The letter expressed Folwell’s view that BCBS should have acknowledged its failures and focused on improving services to regain the plan’s business rather than pursuing litigation. He characterized the lawsuit as an attempt to deflect responsibility.
“As a leader for Blue Cross, you should have taken responsibility for its shortcomings, learned from your mistakes and committed to improving your services to win back the plan’s business,” Folwell wrote, as reported by BestWire. “Instead, you threw a legal antrum, filing a lawsuit against the plan so you did not have to take the blame.”
Folwell also highlighted the financial impact of the case, stating that while $2.05 million might be negligible for a company that compensated its CEO over $4 million in 2021, it is significant for the state and its health plan members, especially as they contend with rising health care costs.
The legal fees incurred in the case were higher than usual because BCBS hired attorney Matt Sawchak, who had previously represented the State Health Plan as North Carolina solicitor general. Folwell noted that this conflict required the state to seek external legal counsel, increasing expenses.
The demand for reimbursement comes after an exit audit, which the treasurer’s office routinely conducts for major state contracts. According to the letter, BCBS of North Carolina has up to 30 days to remit the $2.05 million.
In response, a BCBS spokesperson declined to comment on the specifics of the demand letter. The company reiterated its commitment to serving state employees under its current agreement and ensuring a smooth transition for plan members.
What do you think about the treasurer’s demand for reimbursement? Share your thoughts in the comments below.
