By Mike Shields

KHI News Service

July 11, 2008

TOPEKA The commission that oversees the state employees" health plan approved two service contracts with health insurance companies, but told state officials to go back to the bargaining table with three other potential vendors, including Blue Cross Blue Shield of Kansas, currently the state plan"s dominant provider.

"Cost, basically, that"s what the negotiation is about and to some degree the mechanics of providing services, but the key thing is negotiating on costs," said Duane Goossen, secretary of administration and the chairman of the Kansas State Employee Health Care Commission.

Thursday, after reviewing five contract proposals in executive session, the commission approved contracts for Coventry Health Services and Preferred Health Services.

But members instructed officials with the Kansas Health Policy Authority, which administers the plan, to continue talks with Blue Cross, the Government Employee Health Association and United Health Care.

The state plan, which covers about 90,000 state and local government workers, retirees and their dependents, has been self insured since the beginning of the year. The contracts for 2009 now being considered would be for administrative services and medical care offered through each vendor"s network of health professionals. The contracts collectively are worth about $330 million a year in business, officials said.

The state now contracts with three plan providers: Blue Cross, Coventry and Preferred Health. Blue Cross provides services for about 84 percent of the plan participants.

"We are kind of in a wait-and-see mode. We have not yet heard back from the state"s purchasing folks," said Mary Beth chambers, a Blue Cross spokesperson. "So, we are waiting from them to see what additional information they"re wanting from us. It could be price. It could be something else. We thought we had all the i"s dotted and the t"s crossed, but obviously they"ve got some other questions we"ll need to respond to. We"ll be ready to do that as soon as they tell us what those questions are."

Doug Farmer, plan director for the health policy authority, said it remains uncertain how many vendors ultimately will be chosen, though the goal is to assure state workers are provided a range of good options to choose from.

"We will deal with whatever contractors we have at the table and the mainstay of what we"re doing is making sure our members are getting the services they"re paying for," Farmer said.

"We"re trying to offer plans for employees that are both reasonably priced for them and also reasonably priced for the state," Goossen said.

The health care commission is scheduled to next meet at 1:30 p.m. on July 30.

Goossen said the expectation was that a decision will be made on the remaining vendors under consideration at that meeting.

-Mike Shields is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at mshields@khi.org or 785-233-5443, ext. 123.