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S.C. BlueCross BlueShield Continued Partnership Means Retention of 950 S.C. Jobs, Illustrates S.C. BlueCross Total Enterprise Continues to be an Economic Engine for State

June 17, 2011

Columbia, S.C. – A Government Accountability Office (GAO) decision to uphold an award of the U.S. military’s South Region TRICARE contract to Humana Military Healthcare Services will result in 950 jobs retained in South Carolina by a BlueCross BlueShield of South Carolina subsidiary.
 
Humana Military Healthcare Services, a wholly owned subsidiary of Humana Inc. (NYSE: HUM), announced Wednesday that it had received notification of the decision by the GAO to uphold the award of the Third Generation (T-3) contract to Humana Military by the Department of Defense TRICARE Management Activity (TMA), rejecting a protest initiated by a competing bidder. 

PGBA, LLC, a wholly owned subsidiary of S.C. BlueCross, provides claims processing, customer service, fiscal services and information systems as a subcontractor to Humana Military, which is the incumbent primary contractor for the South Region.
 
The announcement means 700 PGBA employees in Florence, S.C., 75 employees in Camden, S.C., and more than 175 employees in Columbia, S.C. will continue to work to administer the program.
 
Founded nearly 65 years ago to provide health plans to South Carolinians, S.C. BlueCross began to diversify into other business lines 40 years ago, enabling the corporation to generate many more jobs in the state. Just over the last two decades, BlueCross has grown from a group of a few companies with 3,000 employees to an organization of more than 45 companies with more than 12,000 employees. A total of 8,500 employees are working in South Carolina and another 3,500 working in other states. Of the 9,000 jobs added over the last 20 years, more than 80 percent work outside of the commercial insurance division. The corporation’s group of companies has brought highly skilled and professional careers across the state, including in communities outside of the mainstream of economic development in South Carolina.

In its TRICARE business line alone, the South Region contract, along with PGBA’s subcontract work on a separate North Region contract announced in 2010, results in more than 1,900 jobs in South Carolina.
 
TRICARE is the military’s health care program for active-duty and retired service members and their families. The South Region includes approximately 3 million beneficiaries in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee and most of Texas. An excellent track record by these South Carolina employees on these contracts positions the company well to team with bidders for more upcoming federal contracts.
 
“This is a great day,” said BlueCross President and CEO David Pankau. “It not only saves jobs but contributes to the economic development of many of our South Carolina communities and elevates our state’s workforce. We are able to successfully partner and retain these contracts because of our total enterprise’s technology, our scale, our ability to manage multiple types of business, and an excellent work force. Most people don’t realize that we are much more than a commercial health insurance company.”

An independent licensee of the Blue Cross and Blue Shield Association, BlueCross BlueShield of South Carolina comprises more than 45 companies involved in insurance services, technology development and sourcing, U.S. DoD health program and Medicare contracts, and other commercial lines of insurance and employee benefits services.

The South contract was originally awarded on July 13, 2009, to the same competing bidder. Humana Military lodged an appeal on July 22, 2009, with the GAO. That protest was sustained on Oct. 28, 2009. The contract was subsequently awarded to Humana Military on Feb. 25, 2011. The competing bidder filed a protest on March 7, 2011, which was denied by the GAO on June 14, 2011.
 
The new contract is scheduled to begin on April 1, 2012, and provides for five one-year options annual exercisable by the DoD.
 
PGBA has a 30-year record of performance excellence on military health care contracts. Since implementation of the current South Region contract with Humana Military in August 2004, PGBA has processed nearly 115 million claims with an accuracy rate of 99.75 percent. More than 99.5 percent of those claims were finalized within 30 days. 
 
“I want to express my deep appreciation to our South Carolina employees for continuing their outstanding performance,” said Michael J. Skarupa, president and chief operating officer of PGBA. “Even during this long period of uncertainty, they made sure the beneficiaries and health care providers in the TRICARE program continued to receive the quality service they have come to expect from PGBA. We are honored to serve our nation’s military.”
 
PGBA handles approximately 60 percent of the nation’s TRICARE medical claims processing and related customer service, serving more than 6 million beneficiaries and their health care providers. PGBA has offices in Columbia, Florence, Camden and Surfside Beach, S.C. In addition to TRICARE, PGBA is also a claims processor for several other government programs throughout the United States.

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