Superior Court Judge Netti C. Vogel has blocked the state from signing a new health contract with UnitedHealthcare of New England and switching more than 52,000 people over from Blue Cross & Blue Shield of Rhode Island as of Jan. 1, citing “compelling evidence” that the state acted with “total disregard” for the law and clearly abused its discretion.
Blue Cross went to court after the state promptly rejected its protest of the bid award and refused to consider the possibility that, as Blue Cross claimed, its bid was actually lower than United’s. After several hearings, Vogel on Wednesday issued a preliminary injunction that halts the switchover until the matter is fully resolved.
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Vogel said she had approached the case “with grave caution,” recognizing that “government by injunction, save in the most compelling cases, is to be strictly avoided.” But there’s “overwhelming evidence that the procurement process was characterized by both a palpable abuse and a clearly unwarranted exercise of discretion,” she said, and United was favored while Blue Cross “was denied fair consideration of its bid.”
Vogel scheduled a follow-up hearing on Friday to determine the next step in the case, and how much money she will require Blue Cross to post to cover any costs and damages to the state and United if they prevail in the case after all.
Should Blue Cross win, Vogel predicted, she would likely order the state to put the health contract up for bid again, which could result in Blue Cross getting the award. Issuing a preliminary injunction, she said, will protect the state workers and retirees from potential disruptions to their coverage.
It’s unclear what would happen if the process went on past Jan. 1, but Vogel seemed to imply that Blue Cross would continue covering the workers until a new contract is in place.
Blue Cross spokesman Scott A. Fraser said the company was “thrilled” with Vogel’s ruling, which “certainly vindicates the position we’ve had all along.”
Director of Administration Beverly Najarian would not comment on the ruling. She and Governor Donald L. Carcieri have said all along that United’s bid was substantially lower, by as much as $8 million, and $25 million lower than the current contract.
