Regence Blue Cross Blue Shield is laying off 56 employees across four states, including 14 at its Commerce Drive office in Medford.
The news was delivered to employees Tuesday.
Regence said the move was necessary to keep the cost of its services competitive and said it has engaged Cognizant Technology Solutions to perform claims and membership duties.
"This decision saves Regence millions of dollars and improves quality, efficiency and service for our members," a Regence spokesperson said.
Scott Powers, vice president of insurance operations, sent out an email to employees Tuesday, announcing the move.
"As reform draws near, we continue to explore ways to reduce costs and improve quality and efficiency to create an economically sustainable health care system for our members — this means investing in some areas and reducing investments in others," Powers wrote.
"We are competing in a market where nearly every major health insurer in the country realizes significant cost savings and greater quality and efficiency by sending certain types of transactional work to service providers whose core competencies and IT systems are set up for fast and efficient processing."
Powers detailed what functions will be handled by Cognizant and then itemized the cuts.
"Today, we delivered the difficult news to 56 Claims coworkers that their positions are being eliminated and these transactional claims functions will be moved to Cognizant over the next few months," he wrote. "Additionally, we notified 30 Membership employees that their positions are being moved to group membership in advance of open enrollment, and their current transactional membership functions are being assumed by Cognizant.
The transition is expected to extend several months and employees were told they would be given 30 days notice prior to their layoffs, severance packages, and career transition training.
"We understand how difficult change can be, especially on the heels of many changes over the past few years and particularly when it affects our own Regence team members," he wrote.
— Greg Stiles
Correction: Scott Powers' name has been corrected throughout this story.