May 29, 2007
Blue Cross and Blue Shield of Kansas , Wheatlands Subsidiary Out of Running for New Medicare Contract
The bid submitted by Wheatlands Administrative Services, a subsidiary of Blue Cross and Blue Shield of Kansas, for the Jurisdiction 5 Medicare Part A and B contract has been deemed by the Centers for Medicare and Medicaid Services (CMS) as not in the competitive range and, therefore, Wheatlands is no longer being considered for the five-year contract, according to Graham Bailey, BCBSKS vice president of corporate communications and public relations.
"Both the BCBSKS and Wheatlands boards of directors, our management teams and employees are certainly disappointed that our 41-year relationship with CMS will come to an end in 2008," Bailey said. "We feel that we submitted a competitive bid, and certainly appreciate the assistance that local and state entities offered to us as we prepared our bid.
"At this point, we will continue to provide Medicare beneficiaries and providers in Kansas, Nebraska and Northwest Missouri the outstanding service that they are accustomed to," Bailey said. "We also will concentrate on making the coming months as comfortable as possible for our approximately 350 Wheatlands employees in Topeka and Salina."
Bailey said the company will work with prospective contractors to explore what employment opportunities might be available for Wheatlands employees. In addition, the company's human resources department will work closely with employees regarding incentives, severance packages and other employment opportunities within BCBSKS.
CMS expects to announce the new contractor for Jurisdiction 5 – to include administration of Parts A and B in Kansas, Nebraska, Iowa and Missouri – by the end of July. The work currently being done by Wheatlands will transition to the new contractor by mid-2008.
The loss of the contract also will require BCBSKS to review its entire business operations.
"For many years our Medicare operations have contributed to the fixed operating costs of Blue Cross and Blue Shield of Kansas," Bailey explained. "The loss of this income will require us to examine our expenses even more closely than we already do to determine areas where cost savings can be realized."
BCBSKS has served as a contractor for Medicare since the inception of the program July 1, 1966. Wheatlands Administrative Services was created in 2006 to conduct the company's current and future Medicare business.
Blue Cross and Blue Shield of Kansas is an independent licensee of the Blue Cross and Blue Shield Association. BCBSKS is the state's largest health insurer, serving all Kansas counties except Johnson and Wyandotte.- Back -