An aerial view of the Blue Cross Blue Shield of Tennessee headquarters in downtown Chattanooga is shown in this 2012 staff file photo. / Staff file photo

NASHVILLE — Blocked in his effort to obtain the information directly, a Tennessee lawmaker wants state Comptroller Justin Wilson to see if Chattanooga-based BlueCross BlueShield of Tennessee is "properly and legally" carrying out its responsibilities in administering state employees' health insurance plan.

In a hand-delivered letter to Wilson's office on Tuesday, House Government Operations Committee Chairman Martin Daniel, R-Knoxville, requested the comptroller to "undertake an audit to determine whether [BlueCross] is properly and legally performing its contractual and fiduciary duties.

"Among other things to be determined at your discretion, I request that you perform a significant sample survey of medical claims paid in 2018 to ensure that the amounts paid are reasonable," Daniel's letter continues. "Also, I request that you perform a similar survey to determine if there is any difference between amounts actually paid in 2018 by [BlueCross] to the medical providers and the amounts that are removed from [state] Plan trusts accounts."

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Tennessee state Rep. Martin Daniel

BlueCross is a third-party administrator of state employees' health plan.

After the Tennessee Department of Finance and Administration notified BlueCross, Cigna Health Insurance and Optum Health last week that it planned to release the information to Daniel, all three filed lawsuits in U.S. District Court in Nashville seeking to block it.

In its injunction request, BlueCross charged that releasing the information would violate federal antitrust laws, as well as the U.S. Constitution. The nonprofit company also said that what Daniel seeks is "extremely competitively sensitive, valuable, confidential, proprietary, and trade secret information ... that BCBST provided to the State of Tennessee solely in connection with BCBST performing its obligations under contracts with the State."

U.S. District Judge Eli Richardson on Monday approved the companies' requests for a temporary restraining order.

Asked Tuesday about his reaction to BlueCross' lawsuit, Daniel said in a Times Free Press interview that "I think somebody's trying to hide something. What do you think?"

The lawmaker said his purpose in seeking the information "is to determine whether the third party contractor is properly performing its duties under the contract."


BlueCross, Cigna lawsuit


In response to Daniel's hope to enlist Comptroller Wilson's aid, BlueCross Senior Vice President Roy Vaughn said in a statement to the Times Free Press that "we've been serving the State of Tennessee Employee Health Plan for many years. As part of this relationship and consistent with our contract with the State, BCBST has supported — and will continue to support — the State as it exercises its audit rights.

"Routine audits are a way to ensure we're meeting all expectations and requirements," Vaughn added. "At this point, we are not subject to an audit or notice."

Wilson spokesman John Dunn said in a statement that "Comptroller Wilson and Deputy Comptroller Mumpower spoke with Chairman Daniel earlier [Tuesday]. They are aware of his request, and they will be working with staff to evaluate the issue."

Asked by a reporter whether that means the comptroller will perform the audit on items requested by Daniel, Dunn replied "whether or not we can or are best suited to perform this audit will be part of our evaluation."

Daniel said his interest was stirred over what "seems" to be "a wide variation in amounts paid" by BlueCross "for very similar, uncomplicated claims."

Citing a colonoscopy as an example, Daniel said it's a "pretty simple, uncomplicated" procedure. Yet, he said, BlueCross pays $600 on many claims but as much as $17,000 on the "high end."

"Maybe there's a good explanation for that," Daniel said. "I don't know. But we need the data for claims paid to determine" that. "It could be costing the taxpayers of the state of Tennessee tens of millions of dollars a year."

Calling it the "state's information," Daniel said he is trying "to determine if the third party administrator is doing its job properly. And they don't want to give it up."

An attorney, Daniel indicated he may be also seek an attorney to represent him in the federal case.

In addition to being chairman of the Government Operations Committee, Daniel serves on the General Assembly's Fiscal Review Committee which reviews and approves nonbid contracts between the state and companies. That includes the third party administrator contract that BlueCross has for employee and retiree health plans, Daniel noted.

The lawmaker said he had been going back and forth with Finance and Administration Department officials over the last four to five months on obtaining claims data and payments.

"Lo and behold, two months ago F&A has a one-year extension request of the third party administrator contract," Daniel said. "This is a five-year contract that's only half through. Now they're trying to cram this nonbid contract extension down our throat."

Contact Andy Sher at or 615-255-0550. Follow him on Twitter @AndySher1.