A judge Monday ordered the state to reconsider its award of a contract to Blue Cross and Blue Shield of Louisiana to administer the HMO health plan for state workers, retirees and their dependents.

Humana previously held the contract, which is scheduled to take effect July 1.

"Humana has certainly raised some valid issues concerning the awarding of this contract," state District Judge Mike Caldwell said at the conclusion of a hearing, adding that the contract "may not be valid."

Caldwell sent the matter back to the Louisiana Division of Administration and the state Office of Group Benefits.

OGB announced in early March that it had awarded the contract to Blue Cross.

Humana and UnitedHealthcare appealed to Commissioner of Administration Angele Davis to block the contract, but Davis rejected the appeals in April.

Humana and UnitedHealthcare then sued the state.

OGB has traditionally offered a statewide health maintenance organization plan as well as a nationwide exclusive provider organization plan to eligible state employees, retirees and their dependents.

OGB sought proposals in October from companies interested in administering the HMO and EPO plans.

UnitedHealthcare held the EPO contract.

Humana and UnitedHealthcare claim in their suits that OGB specifically stated it was seeking someone to administer the self-insured HMO "on a statewide basis." The suits say nationwide networks were not sought.

When Blue Cross was awarded the HMO contract over Humana and UnitedHealthcare, the suits say, OGB Chief Executive Officer Tommy Teague sent a letter saying the office had decided to withdraw the EPO.

Teague explained in the letter that because Blue Cross was offering a nationwide network as part of its HMO proposal, it was unnecessary to offer the EPO plan to OGB's members, the suits state.

Humana attorney Phil Franco argued Monday that the contract was "illegally awarded" to Blue Cross.

Blue Cross attorney Brandon Black, OGB attorney Wendell Clark, and Franco declined comment after the hearing.

Teague testified in Caldwell's courtroom last month that the Blue Cross contract will save the state $34 million in the first year.

Teague said OGB is folding the current EPO plan into the HMO plan.

The HMO covers more than 114,400 employees, retirees and their dependents.

The EPO covers 37,200-plus employees, retirees and dependents.


Information from: The Advocate,