published Wednesday, November 10th, 2010

BlueCross gets Medicare contract

After trimming more than 250 jobs in the past year because of cuts in TennCare and Medicare programs, BlueCross BlueShield of Tennessee is planning to add 150 jobs to serve a new Medicare contract next year.

  • photo
    File Photo The BlueCross and BlueShield logos hang on the company's old building in downtown Chattanooga.

Combined with growth in other commercial accounts, the Tennessee BlueCross plan should enter 2011 with as big of a Chattanooga staff as the insurer ever has had, company communications director Roy Vaughn said.

BlueCross in Tennessee lost its Medicare contract for its home state and in New Jersey a year ago, cutting 118 jobs. The company cut another 140 jobs this year in its TennCare division to pare ongoing losses from its Volunteer State Health Plan subsidiary.

But after attrition and reassignments, BlueCross is cutting only 59 jobs at the end of November, according to a required employment termination notice filed with the Tennessee Department of Labor and Workforce Development.

"We continually have to adjust our work force in response to our contracts and their cyclical nature, but we try to minimize any layoffs, wherever possible, through natural attrition and by trying to place people back within the company somewhere else," Vaughn said.

BlueCross staff in Chattanooga

- 4,449 -- Current staff

- 4,513 -- Staff at end of 2009

- 4,548 -- Staff at end of 2008

- 59 -- Employment cuts planned Nov. 30

- 150 -- Anticipated additions over the next three months

Sources: BlueCross BlueShield of Tennessee, Tennessee Department of Labor and Workforce Development

BlueCross picked up a $243 million Medicare contract for seniors in Ohio and Kentucky through a partnership with Cigna Healthcare. The new Medicare contract will add 150 jobs in Chattanooga for BlueCross to administer hospital claims while Cigna will add 250 employees in Nashville to handle physician and other medical claims.

"It is wonderful that we can utilize the years of Medicare experience residing in our company to continue to serve [the Centers for Medicare and Medicaid Services] and the Medicare population," said Stephen Walker, senior vice president of federal programs for BlueCross. "We have spent considerable time and energies cultivating our relationship with our strategic partner Cigna Government Services, and I am confident that together we will perform extremely well for the Medicare program."

Initially, the government picked the Highmark BlueCross plan in Pennsylvania over the partnership between Cigna and BlueCross's subsidiary -- Riverbend Government Administrators. But after the Tennessee-based insurers objected, the government awarded the Medicare contract to the Cigna and BlueCross partnership.

The new five-year contract covers hospital and doctor claims for seniors in Ohio and Kentucky, plus hospice and home health care claim processing in 15 other states and the District of Columbia.

Cigna Government Service President Jean Rush said Cigna and BlueCross "are committed to providing consistent and efficient Medicare claims administration" for about 2.5 million people covered by the Medicare contract.

With the new contract, BlueCross spokeswoman Mary Thompson said the company's Chattanooga staff again should exceed 4,500. BlueCross is the largest private employer in Hamilton County.

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