Topeka Blue Cross and Blue Shield of Kansas will lose 350 jobs in the state after a bid for a five-year Medicare contract was rejected.
The company was told Tuesday that a bid by one of its subsidiaries, Wheatlands Administrative Services, was rejected by the Centers for Medicare and Medicaid Services, company spokesman Graham Bailey said.
After the current contract expires, Topeka is expected to lose 335 jobs and Salina 15 jobs.
Blue Cross, which has worked with Medicare since 1966, handles Medicare physician claims from Kansas, Nebraska and part of Missouri. The new contract would have expanded that work to include all of Missouri and Iowa.
It has not yet been determined who will get the new contract. Bailey said the names of the companies that did submit competitive bids has not been released. An announcement is expected this summer.
Topeka and state governments had provided about $3 million in incentives to Blue Cross to sweeten the Kansas bid for the contract.
The Legislature approved $2 million in tax breaks to Blue Cross to win the four-state Medicare contract covering 2 million Medicare recipients. And the Joint Economic Development Organization approved $1 million in incentives to help land the deal.
"I'm very disappointed that Blue Cross has been eliminated from this contract, especially when they bring their years of service and state support to the table," Gov. Kathleen Sebelius said.
The current contract was scheduled to end Sept. 30 but has been extended through February and may continue through June 2008.
Shawnee County Commissioner Vic Miller said it was disappointing to lose the Blue Cross jobs, which pay an average of $40,000 per year.
"It's devastating, particularly since they were optimistic about making the list," Miller said.
Blue Cross had 1,821 employees on Dec. 31, 2006, including 1,699 employees in Topeka.