Aetna sues New York City, labor leadership over Medicare bidding process

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Aetna issued a lawsuit to New York City and various labor leaders over what it alleges was a "tainted" bidding process for the city's $34 billion Medicare contract.

The insurer filed the suit earlier this month after losing the bidding process to Alliance, a consortium that includes Anthem/Blue Cross Blue Shield and Emblem Health, according to the New York Post

The lawsuit targets both the city and the Municipal Labor Committee, accusing them of unfairly favoring Alliance's bid and violating procurement processes.  

"OLR [the city's Office of Labor Relations] has selected an inexperienced and unqualified bidder through a procurement process that violated New York Procurement law, lacked transparency, and violated principles of public trust and fairness for a procurement that could last up to a minimum of five or as many as eleven years and generate $34 billion dollars in claims revenue," the lawsuit alleged.

Specifically, the lawsuit claims Aetna's figures were leaked during a union meeting and that Alliance oversold a Colorado contract to meet an enrollment requirement, pitched a more expensive plan, and was ultimately selected by a state arbitrator, which was not mentioned as part of the procurement process. 

An Alliance spokesperson said the consortium is not commenting on active litigation.

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