DECATUR - The new company that administers employee insurance has saved the city $600,000 since the beginning of the year, but some council members are concerned that it is costing some employees for vital care they received under the old company.

The city is self-insured but hires an insurance company as a third-party administrator to organize the insurance plan and pay claims, said Assistant City Manager Billy Tyus.

Decatur ended its contract with Consociate/Dansig at the end of 2007 in favor of hiring Blue Cross Blue Shield of Illinois as the program's administrator, negotiating the deal through Decatur-based Behnke & Co.

Councilman Shad Edwards said the switchover has stuck some city employees with bills that were covered before.

"There are some specific examples of things that have been covered under the previous insurance plan that are not being covered today that have caused some concern, frustration and outright fear by city employees," Edwards said.

Municipal retiree Dave Jordan received screening for an abdominal aortal aneurysm in 2007 that was paid by Consociate/Dansig, but an identical procedure in February 2008 was denied by Blue Cross Blue Shield.

"We should have been paid based on Consociate's (administration), whether there was a mistake or not," Jordan said. "If there was a mistake, it was the city's problem to find this error, not for us to be penalized because of the error."

John Malachowski of Behnke said Blue Cross Blue Shield denied the payment based on the city's plan and informed the city's risk manager that Consociate had improperly paid out the prior claims.

"We verified that Blue Cross paid (Jordan's) benefits according to the way the city of Decatur plan read, and they had in fact done that," Malachowski said.

Assistant City Manager Jerry Bauer said the company uses the city's insurance plan to determine if a claim is payable, then makes the payments, and the city reimburses them after the fact. The job includes determining if claims are eligible for coverage.

Edwards said he believes either the city's former risk manager or Consociate/Dansig chose to pay or cover claims that are now being reviewed by Blue Cross Blue Shield.

"The problem is that the employees expected that the plan and their coverage would not change, thus their coverage should not be an issue," Edwards said.

Tyus said the insurance plan for employees is written by the city and has not substantially changed, only the company executing the plan.

"There is also an appeal process in the event that an employee claim would be not covered and an employee would want an appeal," Tyus said.

Malachowski delivered a progress report to the city council Monday, detailing the savings to the city since the switchover.

Malachowski said Blue Cross Blue Shield's better discounts saved the city $700,000 over what the estimated costs would have been under Consociate/Dansig. Factoring in the $100,000 in additional cost to the city of retaining Blue Cross Blue Shield, the net savings comes to $600,000. Malachowski said that, based on savings from the first half of the year, Behnke projects the city will save more than $1 million over what they would have paid with the previous company.

"Kudos have to be given to the city council for making the switch that ultimately is going to save the city of Decatur in excess of a million dollars," Malachowski said.

Malachowski said any disputes in claims are investigated by Blue Cross Blue Shield.

"It's possible that the current administrator paid those claims incorrectly, and if so, they'll be corrected," Malachowski said. "It's also possible that the previous administrator was paying those claims incorrectly, and Blue Cross Blue Shield is now paying them correctly."

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