The University of Arkansas System said Monday that it will cancel the contract under which QualChoice handles third-party administrator duties for its employee health plan, even though the University of Arkansas for Medical Sciences has an ownership interest in the Little Rock health insurance company.

The UA System has hired UnitedHealthcare of Hartford, Conn., which on Jan. 1 will begin managing the administration duties for about 35,000 employees and dependents covered by the system’s health insurance, said Ann Kemp, vice president for administration for the UA System.

The UA’s health plan includes campuses at the University of Arkansas at Fayetteville, Pine Bluff and UAMS.

“Our health care costs continue to increase at a level that we just can’t sustain, and we are looking at everything,” Kemp said.

One of the areas it reviewed was third-party administration fees.


The UA System asked for bids on the work on June 29. Kemp said that five companies submitted bids, and a committee recommended that the UA System President Donald Bobbitt contract with UnitedHealthcare.


Kemp said late Monday morning that she would have to check with the UA’s attorney before she could release the amount of money the UA System will pay United. She didn’t have the amount it paid QualChoice immediately available.


UA’s contract with QualChoice was binding until June 30. Kemp said the UA could cancel the contract with a 90-day notice, which it has given.


She said the UA System had been using QualChoice’s services since 1995. read more…