Blue Cross and Blue Shield of Louisiana again was selected as the third-party administrator for the state’s self-funded health insurance program.
The state Office of Group Benefits announced the selection Wednesday for the key job in the program that provides health insurance for some 230,000 state employees, retirees and their dependents.
Blue Cross Blue Shield, which has had the contract since 2013, won out over three other entities seeking the work.
The three-year contract is estimated to be worth $35 million annually.
The contract is effective Jan. 1 and has two one-year renewal options.
Under the pact, Blue Cross Blue Shield of Louisiana is responsible for claims processing, subrogation, population health management, reporting and customer service.
Also included in the contract is payment to providers on Group Benefits’ behalf. While claims payments are processed through a third-party administrator, the payments are made weekly from OGB’s fund balance. Claims fluctuate significantly year to year depending on market trends and population health.
Blue Cross Blue Shield will be administering a program that’s been through a series of major changes in recent months as Group Benefits reserves dwindled and insurance costs to its members grew.
Of those considered, Blue Cross offered the lowest administrative and claims cost to Group Benefits and its members as well as the largest provider network. Group Benefits officials said $18.4 million in administrative savings are expected over the next three years when compared with the current contract rates. The per member, per month rate Blue Cross will be paid is $2.25 lower.
West said working with a third-party administrator gives Group Benefits members access to a larger local and national provider network, provider discounts and the opportunity to participate in wellness and health management programs.
“Offering quality health care has always been OGB’s top priority,” said Susan West, chief executive officer at OGB. “I support the evaluation committee’s selection of Blue Cross and I look forward to continuing our efforts to improve the health of our 230,000 members.”
The selection committee included members from all areas of state government, including representatives from the departments of Transportation and Development, Health and Hospitals, Corrections, and Insurance, as well as the Louisiana Retired Teachers Association, the Office of Group Benefits, the Division of Administration and OGB’s Policy and Planning Board.