Montana Ready to Assign New Contact for State Employee Health Plan

HELENA — After reopening a request for proposals earlier this year for a company to manage health insurance for state employees, the Montana Department of Administration says it is ready to award a contract – to company that has been operating these services for the past two years.

DOA announced it would begin negotiations with Blue Cross Blue Shield of Montana, to finalize a contract allowing the company to remain the “third-party administrator” of the state’s employee health plan.

“The contract with BCBSMT will continue our efforts to responsibly manage state plan contributions while maintaining high-quality medical care for our state employees and retirees,” said DOA Director Misty Ann Giles , in a press release. “We are pleased to have issued this RFP under the new provisions of SB 51, which will allow our suppliers to participate in a truly competitive process while allowing our citizens to review and engage in our procurement activities before a contract is finalized.

The move comes after department heads announced in January that they would take the unusual step of reopening tenders for the third-party administrator contract, due to questions over whether all bidders had the same understanding requirements.

The state health plan provides health benefits to approximately 28,000 members, including government workers, their family members, retirees and legislators. In 2022, the DOA announced that BCBS would take over management starting Jan. 1, 2023, under a three-year agreement that it said would save the state about $28 million.

However, in January, the ministry announced that it would end that contract a year early and launch a new tender process for a contract that would begin on January 1, 2025.

Allegiance Benefit Plan Management — the company that had administered the state’s health plan since 2016 — filed a protest over the state’s selection of BCBS. They made a number of allegations, including that state evaluators did not score all companies consistently and that the state changed bid requirements during the process.

A DOA spokesperson told MTN in February that the department’s decision to reopen the tender was not a response to Allegiance’s protest or any of its specific allegations, but that the protest had indeed started the process which led to the decision to present a new offer.

BCBS and Allegiance were finalists again this time. The DOA posted information about its evaluation of the two bidders on its National Procurement Office website. The documents show the evaluation committee rated the companies the same on many aspects of the bid, but ranked BCBS higher in several areas, including the claims administration system, implementation and transition of the plan and development of the supplier network. One evaluator also gave BCBS an advantage on overall cost, particularly due to lower administrative costs.

BCBS released a statement to MTN in response to the DOA announcement:

“We are grateful that the State of Montana has once again confirmed that Blue Cross and Blue Shield of Montana is best positioned to help it achieve better health outcomes and reduce the cost of care over time. time for its employees,” said Lisa Kelley, president of BCBSMT. “We were able to demonstrate the value of our exceptional account management and customer service and help the state improve its approach to identifying and managing employee health risks while working to reduce employee costs. health care.

A new state law passed in 2023 requires leaders to provide a one-week public comment period before officially awarding the contract. They will be accepting comments on this price until Sunday, June 30. DOA asks anyone wishing to comment to email Corporate Purchasing Supervisor Gwenette Ungerman referencing “Medical TPA RFP.”

A DOA spokesperson said the new contract with BCBS is expected to begin Jan. 1, 2025, and run for an additional three years.

Editor’s note: This story has been updated to include statements from the Department of Administration and Blue Cross of Blue Shield of Montana.