HELENA, Mont. (AP) — The state's largest private health insurer missed a deadline to bid on an estimated $13.5 million, three-year contract to manage the state of Montana's employee health plan.
Blue Cross and Blue Shield of Montana submitted its proposal on Nov. 18, but not before a 2 p.m. deadline, disqualifying it from competing for the contract that would start in 2013, Lee Newspapers of Montana reported Thursday.
"In the world of public procurement around the nation, late is late, whether its two minutes, two hours or two days," Sheryl Olson, deputy director of the state Department of Administration, told The Associated Press. "We didn't take it lightly that they didn't get in, but we have a rule that says regardless of cause, late is late."
Recommended For You
Blue Cross president and CEO Mike Frank emailed employees last Friday that said the late submission "was a mistake for which I cannot make excuses," and that a team is reviewing the causes of the missed deadline.
The state health plan covers 34,000 employees, their dependents and some retirees. Olson said about 80 percent of those people currently have Blue Cross as their plan manager.
Olson said the state is reviewing bids from Employee Benefit Management Services of Billings, UnitedHealth of Minnesota and Cigna of Connecticut. Delta Dental is bidding only on the dental coverage.
An advisory council of state employees and benefit managers will evaluate the proposals, taking into consideration access to doctors and costs, and make recommendations.
"We look at the best combined package that they're offering," she said. "It may go to one, it may go to all three. It just depends on the prices that they're offering us."
The overall contract is worth an estimated $4.5 million a year, and could be renewed for up to a total of 10 years, making it a potential $50 million contract, considering inflation, if one company was awarded the entire contract, Olson told the AP.
The companies base their bids, in part, on their financial relationships with medical providers and Olson said she is not sure if people who currently have Blue Cross managing their health plan will have to change doctors to the preferred providers of the company that wins the contract.
Frank Cote, senior director of government relations for Blue Cross, said Tuesday the company took the request-for-proposal "very seriously" and spent many hours preparing its submission.
"We are currently undertaking a thorough review to determine the factors that contributed to the proposal being late," Cote said.
Cote said the company "sincerely regrets and apologizes for the disruption and potentially higher costs to the state of Montana and its employees, retirees, legislators and their families."
Olson said the state didn't look at the proposal Blue Cross planned to submit, but said it is speculation that any contract the state awards might cost more.
"We don't know they would have won anyway," she said.
Cote said the state contract Blue Cross has is worth $3 million a year, just a fraction of the company's overall revenue, which will top $500 million this year.
When asked if losing the state contract would affect lead to layoffs, Cote said it's "too early to know all the impacts" on Blue Cross.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
