Blue Cross lawsuit: State contract review was 'legally flawed'

Blue Cross Blue Shield of Nebraska wants to void a contract the state awarded last month to UnitedHealth to administer health insurance for state employees.

In a lawsuit filed Wednesday, Blue Cross alleged the state of Nebraska conducted a contract bidding process that was "erroneous, unfair, legally flawed, believed to be conducted in a manner contrary to industry standards, and in violation of the state's own relevant and applicable requirements relating to the handling and consideration of the [request for proposal]," reported the Lincoln Journal Star.

Blue Cross also claimed that Nebraska's GOP chairman, Mark Fahleson, improperly lobbied on behalf of UnitedHealth while the state's request for bids was still pending, which is against state regulations, the Associated Press reported.

"The Nebraska Republican Party is the party of the governor, who is responsible for the employment of those in a position to award the contract," said Blue Cross attorney Kermit Brashear. "There can be no denying that as a person with the leading role in the Republican Party, the chairman is a 'political activist.'"

The lawsuit seeks to force the Nebraska Department of Administrative Services to hold a hearing on the contract, which Blue Cross says is required under state law. Because the department doesn't hold such hearings, Blue Cross lodged its protest of the contract through an informal administrative procedure. The protest was denied, reported the Omaha World-Herald.

In response to the suit, Department of Administrative Services General Counsel Bo Botelho said, "the hearing that Blue Cross Blue Shield is requesting is not required in a bid process under state law." He added that the department did reconsider Blue Cross's contract bid, but it "came up with the same conclusion: The lower bidder and lowest cost was with United Healthcare and not with Blue Cross."

To learn more:
- see the Omaha World-Herald article
- read the Associated Press article
- check out the Lincoln Journal Star article

Suggested Articles

Silicon Valley giants are building software and technology tools to serve as trusted healthcare resources in the ongoing COVID-19 outbreak.

An advisory group to ONC is standing up a coronavirus task force to tackle privacy and interoperability issues impeding frontline clinicians.

The coronavirus pandemic puts a spotlight on some of the biggest risks for states seeking to roll out Medicaid block grants, a new analysis shows.