MLGW OKs UnitedHealth [The Commercial Appeal, Memphis, Tenn.]

Sept. 17--The board of Memphis Light, Gas and Water Division voted again to keep health insurer UnitedHealthcare for as much as another year, despite lobbying from rival insurer Cigna to get the board to reverse its decision.

At a meeting Thursday, the board didn't address a lawyer's request that it reverse another decision, to pick Medco Health Solutions Inc. rather than Express Scripts Inc. as pharmacy benefits manager.

Tens of millions of dollars are at stake as health care companies lobby MLGW's board to win lucrative, multiyear contracts to provide benefits to the utility's employees.

Now the lobbying is likely to move to the Memphis City Council, which approves MLGW's major contracts.

The council is scheduled to address both the health insurance and pharmacy benefit items on Sept. 28, said MLGW's president and CEO, Jerry Collins Jr. The council could send the items back to MLGW's board for reconsideration, he said.

On Sept. 2, board members rejected a plan to give a $116-million, three-year contract to low bidder Cigna Healthcare to handle medical claims for roughly 1,900 current employees and 2,200 retirees in the largest of MLGW's health care plans.

Cigna's proposal would be more than $4 million cheaper than UnitedHealthcare's over the term of the contract, according to MLGW staff.

But board member Dedrick Brittenum said MLGW should seek new proposals, because the companies hadn't provided enough information about how they would keep employees healthy and avoid claims.

So the board voted to keep UnitedHealthcare for up to 12 months while companies submitted new bids.

On Thursday, the head of the retirees' association, Sandra Kinsey, spoke against that decision, expressing concern that it would lead to higher premiums.

"We would like to see the least amount of increase that we can see," she said.

And attorney Ricky Wilkins, representing Cigna, said its plan is not only cheaper, but offers greater participation to minority businesses.

Commissioner Steve Wishnia called for the board to rescind the motion in favor of UnitedHealthcare he had voted for earlier this month.

"I'm just asking us to really look at this because we need to save this money for our ratepayers," he said.

Brittenum responded that MLGW was almost certain to get a better price if it sought new proposals. He also said the wellness proposals that companies have put forth so far don't take the latest research into account.

"It's the same old wellness that was pulled off the shelf that we've heard for decades," he said.

The motion to rescind resulted in a 2-2 tie, with Darrell Cobbins and Wishnia voting to rescind and Brittenum and Rick Masson voting against. Board member V. Lynn Evans was absent.

Also Thursday, lawyer Bert Wolf asked the board to rescind its Aug. 19 decision to give Franklin Lakes, N.J.-based Medco a three-year, $53.9 million contract to handle pharmacy benefits, even though its price was about $123,000 higher than that of St. Louis-based Express Scripts Inc.

Wolf, who represents Express Scripts, said the board violated state law by considering the fact that Medco's specialty pharmacy subsidiary, Accredo, employs about 1,800 people in the Memphis area.

Executives for Medco and Accredo said MLGW should stick with its decision, and MLGW's board didn't move to reverse.

-- Daniel Connolly: 529-5296

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