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March 12, 2012 at 01:30 PM
CHICAGO (AP) — A new audit finds serious problems with the way Illinois awarded $7 billion in contracts last year for state employees’ health insurance.
In a report released Wednesday, Auditor General William Holland said Illinois awarded Blue Cross Blue Shield of Illinois, a unit of Health Care Service Corp., Chicago, contracts in 24 counties which the company had no primary care doctors.
Illinois Blue was the biggest winner in the contracts awarded last year, getting a 5-year contract totaling $6.6 billion.
The audit cited other problems, including that the state’s Department of Healthcare and Family Services overlooked a potential conflict of interest by using a consulting firm with business ties to insurers, including Illinois Blue.
“These are serious problems given that this involved over 400,000 enrollees and eligible dependents and $7 billion in taxpayer monies,” Holland wrote.
Department Director Julie Hamos defended the contracting in a letter to the auditor, saying the overall process was “executed in a fair and competitive manner.” Hamos said the audit report would be “a useful blueprint to our agency and others to strengthen the internal procedures that are necessary.”
The audit comes as the state is settling a lawsuit by insurers who lost in the bidding for the contracts. Officials at one of those companies, Health Alliance, Urbana, Ill., said they weren’t surprised by the auditor’s findings because “many were pointed out in our original protest of the procurement.”
