Blue Cross Blue Shield will soon return as the third party administrator of North Carolina's State Health Plan, set to supplant Aetna in 2028 after a unanimous vote by the Health Plan's Board of Trustees on Friday.
"Blue Cross brings deep experience, proven capabilities and a shared commitment to delivering better value and a better experience for the people who depend on the plan," State Treasurer Brad Briner told reporters after the vote.
In addition to the third party administrator role, where it processes claims for the health plan and builds out a provider network, the Health Plan's Board of Trustees also unanimously voted to make Blue Cross NC the plan's pharmacy benefit manager. It will begin both roles on Jan. 1, 2028.
The contract is for an initial three-year term, with two one-year options for 2031 and 2032.
"In the months ahead, our focus will be on ensuring a seamless experience for members and partnering with the plan and their leadership to deliver practical solutions that reduce costs and support a better health for the State Health Plan and all North Carolinians," said Roy Watson Jr., a vice president at Blue Cross NC.
Blue Cross NC served as the health plan's third party administrator for more than 40 years before then-Treasurer Dale Folwell pushed for a change in late 2022. The board at the time selected Aetna to replace Blue Cross NC, with the change taking effect in 2025.
Earlier this year, the State Health Plan decided not to trigger year-long extensions on either the Aetna contract of that of pharmacy benefit manager CVS Caremark.
There were three respondents to the state's request for proposals for the third party administrator, including Aetna, with two making it past minimum requirements.
"We ran a fulsome RFP process here. We got the results of that and the decision was very, very clear. Both from a cost perspective, from a member service perspective, as well, and then from every dynamic we can think of, there was really not much of a contest," said Briner, a Republican in his first term in office.
State Health Plan Executive Administrator Tom Friedman said the cost of the contract to the state is not immediately available because there are a number of options around population health management programs or member steerage programs that plan officials need to decide to activate or not. That process will take about two months, Friedman said, and plan officials will be focusing on what can best help their members.
"We are in the ROI business, not getting the lowest admin fee business," Friedman said.
Among the concerns Folwell raised when he was treasurer about Blue Cross NC's oversight of the State Health Plan was a lack of transparency about pricing.
Asked about that Friday, Briner said that the State Health Plan has started to take a much more active role in contracting directly with healthcare providers, making it more of a partner to the third party administrator than a customer of it.
"Our ability to understand exactly what is going on increases dramatically as a result of that, and so those two things are linked in that way in that we have a front-row seat now rather than a back-row seat to all these conversations," Briner said.
Put together with the preferred provider program announced earlier Friday, Briner said, the State Health Plan expects to save about $1 billion between 2028 and 2030.
Aetna's response
Aetna responded Friday by saying it remains committed to supporting the State Health Plan and its members until the current contract expires on Dec. 31, 2027.
"We continue to believe Aetna is the strongest partner for the State Health Plan. Our expertise and service have helped the State Health Plan to advance its cost containment goals, successfully implement the Plan’s complex provider tiering strategy, and provide members access to high-quality care," Phil Blando, an Aetna spokesman, wrote in a statement.
Blando also said that Aetna would review the Health Plan's decisions "in the coming weeks" and then decide how to move forward, raising the possibility of a lawsuit over the decision.
When Aetna won the bid in 2022, Blue Cross NC unsuccessfully sued in administrative court.
State Health Plan leaders said they are confident in their decision to award the new contract to Blue Cross NC.
"There was really no contest in these RFPs. The decision was so very clear that I would hope that it would make people think twice about bringing action," Briner said.
