PROVIDENCE -- The state Supreme Court will decide whether a new health
contract affecting some 52,000 state workers, retirees and their
families was properly awarded.
The high court will hear arguments regarding the disputed management
contract with United Healthcare of New England on Jan. 18, according to
an order released today. The state cannot go forward with its three-year
management agreement with United until the high court hears the appeal.
The soonest a new contract could be in place if the United bid is
ultimately rejected by the courts is July 1, 2005, according to the
state. The current contract with Blue Cross & Blue Shield of Rhode
Island expires Dec. 31.
The high court ordered Blue Cross and the state to work out terms to
cover those affected until the appeal is decided.
Superior Court Judge Netti Vogel last week issued a permanent injunction
blocking the state's agreement with United. Blue Cross had sought the
injunction, claiming the state's handling of the bids was unfair. Vogel
agreed, saying it was riddled with errors, and ordered the state to seek
new bids.
Governor Carcieri's administration appealed Vogel's decision to the
Supreme Court on Monday. In its appeal, the state said it was concerned
the lower court ruling could lead to a flood of court appeals from
disgruntled bidders on other contracts.
The high court granted an expedited appeal, but denied the governor's
request to suspend the injunction. The Supreme Court also granted a
motion to delay the bidding process for a new contract until after the
appeal.
The state wanted to suspend the injunction because it "has caused great
confusion and concern with state subscribers," according to its brief.
Scheduled surgeries for January could be affected, the brief said,
depending on which insurer has the management contract.
The state also said the injunction has already caused the Department of
Business Regulation to halt a preliminary review of United's proposal.
Blue Cross spokesman Scott Fraser said health coverage won't be affected
by the dispute.
"There are provisions as to who will pay what and how claims will
handled" should the contract change hands or expire, Fraser said. "But
nothing will change for customers, period."
Because the state is self-insured, the contract covers only the
administration of health benefits provided by the state.
Until the appeal is decided, Blue Cross has offered to continue coverage
at either a rate equal to what it proposed in its rejected bid, or what
United has offered.
Administration Department Director Beverly Najarian expects a
month-to-month deal with Blue Cross, with lower administrative fees than
the state is now paying.
She was pleased the Supreme Court agreed to hear the appeal quickly, in
part because of the effect the lower court ruling could have on other
contracts.
"The role of purchasing agents needs to be defined by the court," she
said.
United spokeswoman Debora Spano said the company was disappointed the
injunction was not lifted but, like the state, welcomed the decision to
decide on the appeal quickly.
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