CHICAGO (CN) – Health insurance provider Cigna claims it should have been awarded a $160 million contract with Illinois and the state is withholding information the company needs to prove it.
In a lawsuit filed Friday in Cook County Circuit Court, Cigna claims its competitor Aetna Life Insurance Company used inaccurate information in its proposal for five state contracts to provide medical benefits to public employees in order to get the award.
When Cigna decided to protest the Illinois Department of Central Management Services’ decision announced in January, it says CMS failed to provide all of the documents it asked for.
The Illinois Procurement Code states that all documents related to contract proposals must be made available for inspection.
“In violation of this mandate, CMS has refused to produce the complete procurement file to Cigna, which has prevented Cigna from discovering all facts relevant to its protest,” the company says in its complaint.
Cigna claims it went so far as to file a Freedom of Information Act request, but that too was denied, with CMS citing an exemption for Aetna’s trade secrets.
In its request for proposal, CMS allegedly said proposals for benefit plans must follow its current insurance plan design, which allows employees to visit in-network and out-of-network medical providers nationwide.
Aetna’s administrative fees are 19.7 percent higher than the ones Cigna submitted, which the state assumes will be offset by network discounts Aetna claims it will be giving out, Cigna says.
However, according to the lawsuit, Aetna calculated those network discounts by assuming that a quarter of employees enrolled in its plans would be in an HMO-style network that only has medical providers in Northeastern Illinois, not the nationwide network CMS required. Aetna has also not guaranteed its discounts like it was required to, according to Cigna.
“Aetna projected provider network discounts and reductions in medical claims spend that will not actually be realized given the design of the State’s plan,” the complaint states. “CMS has proposed spending millions more in vendor fees in the hope that these increased costs will be offset by Aetna’s projected provider network discounts, but those discounts are likely to prove chimerical.”
According to its complaint, “Cigna believes that production of the withheld materials will yield further evidence that these critical features of Aetna’s proposal were inconsistent with the specifications of the [request for proposal].”
Cigna, represented by Daniel K. Ryan of Hinshaw & Culbertson LLP, alleges CMS violated the Illinois Procurement Code and the Freedom of Information Act. It is asking the court to order the agency to release the documents Cigna requested and to prevent its protest from being considered until it gets the records.
CMS did not respond Monday to a request for comment.