Theresa Opeka
Carolina Journal
North Carolina State Treasurer Dale Folwell sent a letter to Dr. Tunde Sotunde, President of Blue Cross Blue Shield of North Carolina, demanding that it pay more than $2 million in legal expenses the Treasurer’s office incurred after successfully fighting a lawsuit by the health insurance giant.
Folwell’s letter opens with, “You owe the people of North Carolina $2,047,114.35 for your failed ‘sue till you’re blue’ lawsuit.”
In a media statement, Folwell blamed Sotunde for throwing an unwarranted “legal tantrum” instead of taking responsibility for shortcomings in the insurance giant’s proposal to win a contract to administer the State Health Plan (the Plan). The letter accused Sotunde of performing “inventive legal gymnastics” instead of learning from his mistakes, and improving services to win back the third-party administrator contract.
Aetna was awarded the contract to be the third-party administrator for the State Health Plan in January 2023, ousting BCBSNC after a decades-long run. The change takes place on Jan. 1.
In July, an administrative law judge upheld the decision to replace Blue Cross and Blue Shield of North Carolina with Aetna as third-party administrator of the State Health Plan for government workers and retirees.
A week later, BCBSNC decided against appealing the judge’s decision.
When asked why he thinks BCBSNC should pay the over $2 million in legal fees during a call with reporters Tuesday, Folwell responded, “You don’t get what you don’t ask for.” He added that as the “keeper of the public purse,” he has the responsibility to collect any money that he thinks is owed to the state.
“I was part of a conference call after the third-party administrator contract was awarded to Aetna many months ago with (BCBSNC) President Sotunde, as well as the chairman of the board of Blue Cross Blue Shield and I thought there was a good conversation, and an understanding that we have been married to Blue Cross Blue shield for nearly five decades and that for the length of the remainder of their current contract that they would, that we would all agree just to finish strong,” he said. “That was met just a few days, if not weeks later by this major lawsuit where we had to go out and retain outside counsel, which not only cost us thousands of hours of staff time, but also legal expenses. I have no idea how Blue Cross is going to respond to this. They have been unpredictable since losing this contract in terms of their response.”
Folwell added that he wishes BCBSNC would have put as much effort into serving State Health Plan members and into their application to continue as the third-party administrator as they did the lawsuit, which had the potential to create a tremendous amount of uncertainty for state employees.
He said that any legal course of action that needs to be taken regarding BCBSNC’s response to the letter will be discussed with their legal team and incoming state treasurer-elect Brad Briner.
Folwell decided not to seek re-election, but, instead, pursue the Republican nomination for governor. He lost to Lt. Gov. Mark Robinson in the March primary. Robinson lost his bid for the governorship to Democrat Attorney General Josh Stein in last week’s General Election.
“I have a big stack of papers (in my office), and now the biggest stack is called next treasurer,” Folwell said. “So in that stack are different folders associated with the State Health Plan, all of our major divisions at the treasurer’s office, things that he’ll be dealing with, especially over the next 12 months, and one of those files is the legal file which talks about not only this but many other legal situations that we’re currently involved in that are going to transfer to the next treasurer.”
During the call, he mentioned that he had invited both Rep. Wesley Harris and Briner, the Democratic and Republican candidates for state treasurer to every meeting he chaired or attended the past two months. Briner won the election on Nov. 5. He said Briner was scheduled to come in Tuesday to meet some of the senior staff as part of the transition of power and will attend more of the meetings he has left to chair before the end of his term.
In addition, Folwell said they are going to do a close-out audit, as they do with every major vendor, to ensure that there’s no recapture or other monies that may be owed to the State Health Plan. The close-out audit will also take place next year.
When asked about his future plans, he would only say that they remain centered on fixing things and saving money.
“I want God and my family and friends and my motorcycles to all be happy with me, so in that order, and you know I’ve been in Raleigh for 20 years, in public service 28 years, and there’s a lot that needs to be saved and a lot that needs to be fixed, and that’s where my focus is right now,” Folwell said.
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