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Politics & Government

PERS chairman: We did the financially responsible thing in picking Sanford over Blue Cross

The chairman of the Public Employees Retirement System board is defending the board’s decision to select Sanford Health as the state’s new insurance carrier.

Sanford replaces Blue Cross-Blue Shield, who had the contract for 37 years.

Jon Strinden testified before the Senate Human Services Committee on a bill that would change some of the bidding procedures for PERS. He says when the board weighed the two bids, the Blues’ plan would have been a 20 percent increase over the previous two years, while the Sanford plan was a 15 percent increase. That saved about $31 per month per employee.

Questions have been raised about the Sanford plan, and the bill would require that any replacement proposal would have to have the same coverage as the previous plan.

"We knew the network was not exactly identical," Strinden told the committee. "We knew the authorization procedure was slightly different. And we knew the Sanford Health Plan was owned by Sanford Health."

There's been some concern because Sanford owns a number of hospitals and clinics in North Dakota.

Strinden says if the bill would have been in-place before the board made its decision, PERS would have been asking for more money than what Governor Dalrymple had in his budget – or PERS would have started the discussion about a reduction in benefits.

"Instead, we made this decision concluding it was the best option for our members," Strinden said.

Other legislators worry Sanford could sue for breach-of-contract, if the legislation would force the contract to be re-bid. 

"I can show you in the contract three sections which clearly state that the contract is subject to state law," Rep. George Keiser (R-Bismarck), one of the sponsors of the bill, told the Senate committee. "I can show you a fourth section where it is implied."

Keiser says it could very well be an issue for the courts.

"I can speak for the House -- the House is ready to address that issue," Keiser said.

The Senate committee is still working on the bill.

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