At least one of the three companies that submitted proposals to replace the Office of Group Benefits (OGB) as a third party administrator (TPA) for OGB’s preferred provider organization (PPO) has done what the Louisiana Civil Service Commission lacked the courage to do: ask tough questions about the selection process.
In fact, United Healthcare on Friday filed a formal protest over the awarding of the three-year, billion dollar contract to Blue Cross/Blue Shield of Louisiana (BCBS).
Reports received by LouisianaVoice indicate there was only a 20-point differential between BCBS and United in the scoring and that BCBS did not have the best score in certain important segments of the overall proposal, namely for the score on claims processing, an area in which one source said BCBS was actually the highest of the three companies.
The Civil Service Commission on Wednesday voted 3-2 in favor of approving the BCBS contract that will result in 121 OGB employees losing their jobs. The approval came after scant testimony supported by an eight-page Power Point presentation by the Division of Administration (DOA) and after allowing opponents less than 20 minutes in which to state their opposition.
Word leaked out immediately following the commission meeting that there had been heated discussion among commission members prior to their entering the aptly-named Louisiana Purchase Room for the meeting—in apparent violation of the state’s open meeting law.
It was also clear from the tone of commission members’ questions, mostly soft balls lobbed at DOA and OGB officials. Conversely, attorney J. Arthur Smith, representing about 100 OGB employees was allowed 15 minutes to present the opposition’s side as commission members appeared to pay scant attention and offer no follow up questions.
When Smith later attempted to correct what he said was incorrect information provided by DOA, commission Chairman David Duplantier rudely stopped him, saying, “This is not a public debate. This proposal was received by the commission in April and you submitted a three-inch thick set of documentation to us on Monday.”
Jindal has benefitted financially from BCBS and its parent company, Louisiana Health & Indemnity. The two combined to funnel $56,000 to Jindal’s political campaign and BCBS gave an additional $100,000 to the Supriya Jindal Foundation, a charity run by Jindal’s wife.
Jindal has been attempting to privatize OGB for more than a year now and is currently on his third agency director since initial efforts to privatize OGB.
Tommy Teague was fired on April 15, 2011, after failing to demonstrate sufficient enthusiasm for the privatization plan.
Teague had taken the agency from a deficit of about $60 million to a $500 million surplus in just over five years.
His successor, Scott Kipper, lasted only six weeks after testifying before a legislative committee that were it left for him to decide, he would not lay off any of the OGB employees. His remarks were made only minutes after his boss, Commissioner of Administration Paul Rainwater had insisted that OGB needed to be downsized by 149 positions.
Rainwater visibly winced at Kipper’s comment and his departure was announced soon thereafter.
It was not immediately clear if United Healthcare, if its protest is denied, would file a lawsuit over the selection of BCBS.
Humana was the other company that submitted a proposal for the PPO takeover.
Two years ago, when BCBS was selected as the TPA of the HMO program for state employees, Humana and United Healthcare filed suit and the court ordered the state to re-bid the proposal.

