Irvine-based clinical management company Core Inc. has won a round in its bid for a multimillion-dollar contract to administer disability insurance benefits for Wisconsin state employees.
The Wisconsin Group Insurance Board voted last week to deny United Wisconsin Insurance Co.’s protest of the contract award to Core, said Thomas Korpady, insurance services administrator for the Wisconsin Department of Employee Trust Funds.
Korpady said board members acted on a recommendation from the Wisconsin attorney general’s office. The contract’s value is in the neighborhood of $7.5 million for a three-year period, he said.
“So far, the results of the bid process stand,” Korpady said.
Pending a court challenge, the Department of Employee Trust Funds is scheduled to award the new contract to Core by Sept. 6, after all parties are notified of the board’s action, Korpady said. That could change if United Wisconsin Insurance goes to court to prevent the department from executing the bid.
Mona Winn, Core’s corporate communications director, declined comment on the Wisconsin contract because a formal agreement hasn’t been signed yet.
Core is a national provider of employee absence management services to large companies, self-insured employers, third-party administrators and insurance carriers. Its services also include healthcare benefits utilization review and case management services.
United Wisconsin Services Inc., United Wisconsin Insurance’s owner, still was evaluating the situation as of late last week, said Jill Van Calster, a company spokeswoman. Milwaukee-based United Wisconsin has been the state of Wisconsin’s third-party administrator for disability benefits since 1972.
Core’s bid was selected by the Department of Employee Trust Funds and the Group Insurance Board this summer over bids submitted by United Wisconsin and Seabury & Smith, a division of Marsh Inc. United Wisconsin, claiming its bid for the new contract was lower than Core’s, protested the outcome.
United Wisconsin officials also have alleged that the Department of Employee Trust Funds was biased against their company. Dick Braun, a Wisconsin assistant attorney general who investigated United Wisconsin Insurance’s protest, said there have been concerns about United Wisconsin’s performance. But, he said, “Disability programs are extremely difficult to administer.”
Braun said the state rated contract proposals based on a combination of cost and a technical score card in an interview prior to last week’s meeting.
“Core’s was the best bid, and the Group Insurance Board agreed,” Braun said. “We then put out a notice of intent to award the contract, and United Wisconsin had five days to protest.”
The new contract is set to start in January and covers administration of short- and long-term disability benefits for state employees. Nearly 52,000 state workers would be covered under the pact, said Julie Reneau, a spokeswoman for the Department of Employee Trust Funds.
If Core does finally end up with the Wisconsin contract, it won’t be company’s first foray into disability program management for state government. Winn said her company has done short- and long-term disability benefit administration for the state of Virginia since January 1999.
Core recently released its second-quarter financial results, reporting earnings of $290,000 on revenue of $16.2 million, compared with earnings of $1.3 million on revenue of $16.7 million in the previous second quarter. n
