GIC CONTRACTS UP FOR RENEWAL IN FY14

Will Blue Cross Submit Bid?

JULY 2012 VOICE: The start of Fiscal Year 2013 marks the last remaining contract year for the state Group Insurance Commission’s six health insurance carriers. All told, the GIC offers a selection of six different Medicare and eleven different non-Medicare plans.

Under state law, the GIC cannot extend its contracts beyond five years. Typically, the agency will award a three-year contract with the option for two one-year extensions.

Of the six health insurance carriers offered by the GIC, UniCare and its Optional Medicare Extension (OME) plan remains most popular with retirees. Tufts and its corresponding Navigator Plan is the highest subscribed non-Medicare plan.

GIC officials are now putting together the parameters of the contract RFPs, which are scheduled for a fall 2012 release. Under the schedule, the Commission would vote in February to select which insurance carriers will be offered beginning in July 2013.

One area, being closely considered by the GIC, is the introduction of health care payment reform into some GIC plans. Under this scenario, the GIC would consider contracting with insurance carriers, which have already taken steps to create what are known as Accountable Care Organizations (ACO).

As we’ve previously reported, ACOs are a new concept in the fight to lower health care costs through reforming the way medical services are billed and paid. Instead of the traditional fee-for-service arrangement, whereby providers bill the insurance carrier separately for each individual service, a new system of bundled or global payments would be used.

While the Legislature is currently debating legislation that would help enable payment reform across the Commonwealth, insurance providers such as Blue Cross Blue Shield already have their own payment reform systems in place.

Blue Cross began developing what is known as Alternative Quality Care (AQC) in 2009, with the cooperation of several doctor and hospital networks. The AQC system has now been rolled out across the company’s HMO Blue network for its business customers, with plans to expand it to other insurance offerings in the coming years.

“If the GIC decides to include an ACO requirement in any of their RFPs, then it might open the door for the return of Blue Cross as a state insurance vendor,” says Association Legislative Liaison Shawn Duhamel. “It has been well over twenty years since the Blues even bid on the GIC health plans. They were outbid by John Hancock nearly thirty years ago, which was subsequently replaced by UniCare some years later.”

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