Saturday, October 19, 2013

Governor to order Blue Cross to reinstate hospitals to network status. Blue Cross takes off the gloves.

Blue Cross & Blue Shield asked a federal court yesterday to issue a restraining order against Governor Phil Bryant after he told Blue Cross he will order the reinstatement of ten HMA hospitals to "in-network" status.  Blue Cross terminated the contracts providing lower "in-network rates" to these hospitals* after HMA sued Blue Cross in Hinds County Circuit Court, alleging the insurer lowered reimbursement rates without HMA's consent. 

Governor Bryant issued an ultimatum to Blue Cross CEO Carol Pigott in an October 17 letter (P.33 in the document posted below**). He justified the executive order by claiming the access to health care for a large portion of the population was threatened by the dispute:

As you know, these ten hospitals provide critical medical care to tens of thousands of Mississippians, many of whom are BCBC enrollees. This fact, coupled with BCBS's dominant market position, has caused me great concern that the hospitals' exclusion from the BCBS network will do serious harm to BCBS enrollees and patients of these hospitals and reduce access to care in the state generally.....

The threat to patients that I feel compelled to address can be avoided only if all ten of the affected hospitals are returned to the BCBS network immediately. Let me be clear that I am not taking sides in your underlying contractual dispute with the hospitals. I have no opinion about that lawsuit. As far as I am concerned, until that dispute is settled by the parties or resolved by a court, BCBS may simply return the hospitals to the status quo as it existed before their contracts were terminated.... My only concern is patient access to care.

Therefor, please advise me by 5:00 PM tomorrow whether you will return the ten affected hospitals to network status and to the status quo as it existed prior to their termination. Otherwise, I intend to issue an executive order to begin addressing this threat to BCBS enrollees and access to care generally.

Governor Bryant sent a similar letter (p.36) to Insurance Commissioner Mike Chaney asking him  to reinstate the ten hospitals to the BCBS network.  However, it appears Commissioner Chaney did not do so, thus the more direct action taken by the Govenor.  The Governor cited the Mississippi Patient Protection Act of 1995 as the basis for his position.  The letter does not quote any language from the code but does cite the code section 83-41-409(b).  That section states:

SEC. 83-41-409. Conditions for certification or recertification.
In order to be certified and recertified under this article, a managed care plan shall:

(b) Demonstrate that its provider network has providers of sufficient number throughout the service area to assure reasonable access to care with minimum inconvenience by plan enrollees;

Blue Cross asked the court to issue a fourteen-day restraining order and hold a hearing during that period to determine whether a permanent injunction was needed.  Blue Cross also asked the court to declare  the Governor violated the contracts clause, equal protections clause, and due process clauses of the U.S. and Mississippi Constitution.

Blue Cross didn't pull any punches in its petition as it charged the Governor engaged in some good ole boy nepotism.  Blue Cross states a member  of the Governor's family (his daughter) is an attorney at Butler Snow.  Butler Snow represents HMA*** in the suit against Blue Cross.  The insurance company also states Butler Snow attorney Paul Hurst serves as Senior Vice-President of Government Relations for HMA.  Blue Cross attempted to follow the money as it claimed: 

the Governor has received nearly half a million dollars, collectively, in political contributions from HMA, Butler Snow, Capital Resources ( a lobbying firm that represents HMA), and Beth Clay (a lobbyist who represents HMA) and her clients.

Blue Cross then uses the Governor's own Obamacare arguments against him as it questions how the Governor can argue the government can not order people to enter into private contracts to buy health insurance while it is ordering Blue Cross to enter into a private contract with HMA.  Blue Cross then claims no one has been denied access to health care as the dispute between the two companies is over reimbursement rates and network coverage.  Blue Cross states its members can still go to "any hospital they desire" and that the policies provide network coverage for emergency care regardless of hospital. 

Blue Cross  re-directed its fire towards HMA as it charged HMA gouges patients and manipulates the system so as to fatten the bottom line.  Blue Cross (p.12) argues HMA  overcharges and provides some data in support of its claim. The lawsuit provides Commissioner Chaney's recent testimony at a recent legislative hearing on the dispute as an exhibit as well as copies of the letters sent by the Governor. It is not known whether the Governor actually issued the threatened executive order. 


*Hospitals: CMMC (Jackson), Biloxi HMA, Brandon HMA (Crossgates), Amory HMA (Gilmore), Madison HMA (Madison), Natchez Community Hospital, Clarksdale HMA (Northwest), River Oaks (Flowood), Alliance Health Partners (Tri-Lakes), and ROH (Woman's)

**If the document embedded below does not appear and you are on an Apple product, you can not read it because it is in flash.

***HMA purchsed advertising on this site.

Kingfish note: Hmm.... did the Governor serve on the Rankin County School Board?  (Ducking).  Couldn't resist that one.  Sorry.   One thing that is interesting is the Governor's vague citation of antitrust issues.   Interesting because he provided no economic evidence in support of the claim.  Such analysis and support is usually required for that argument to succeed in court.  He doesn't cite any specific antitrust laws or violations. Just a vague threat.  There may indeed be antitrust violations in Blue Cross's case but the Guvnah is going to have to get a little bit more specific if he wants to go down this path.  Anyone want to start reading The Antitrust Paradox?

What is also weird is the use of the Patient Protection Act. It states "In order to be certified and recertified under this article, a managed care plan shall:"  Um, so all the state can do under THAT section is cert, recert, or deny cert.  So if it denies cert, then all Blue Cross policies are invalidated? Um, am I reading this right?



29 comments:

Anonymous said...

Bold move by Feeeel. Glad someone is standing up against BCBS and their horrible service in our state. I commend him. They better watch out or he will put his boots on and get them.

bill said...

It's a mistake for the Governor or any other politician to involve himself in a dispute between private companies unless there's a clear public danger that has been caused by the dispute. Even at that point it's iffy, and that is certainly not the case here. BC/BS is still paying out of network reimbursement for HMA owned facilities and practices, and HMA has claimed to be waiving the out of pocket cost to the patients so the only thing that should have been hurt is HMA's bottom line. BC/BS is my insurance carrier and I don't like them any better than anyone else, but this needs to be settled in a court of law. If the Governor wants to get involved he can make a call to the judge and ask him to move it along, but that's about it.

Anonymous said...

So, Phil is a free market guy until white R voters' oxen are getting a goring.

Whowuddathunkit?

Anonymous said...

Bill, I respect your opinion and am usually a "keep government out of business guy" but I believe Governor Bryant is correct.

BCBSMS has a board, it is time now to hear from them.

Anonymous said...

The entire notion that BCBS complains about the price that HMA charges is IRRELEVENT! The law suit is over the CONTRACTED rates that they agreed to pay. What difference does it make what they charge a patient? What they are paying for a procedure is already determined.

BCBS is diverting the focus on what is really going on. I believe if any of the other hospitals, Baptist and St D, would drop a pair, man up and voice the truth about how they are being treated as it relates to reimbursements, this would be over quickly. Or I guess they can lay there and take it.
Go Phil! Screw BCBS on this one.

Anonymous said...

Did Bryant switch to the Democratic Party? Put him the list of RINOs.

Anonymous said...

I disagree with the governor's approach. BCBS and HMA are private entities. HMA has sued BCBS for alleged non-payment of benefits. BCBS and HMA contract negotiations are at a standstill, in part, due to HMA having sued BCBS.

BCBS has a duty to its members (insureds) to manage costs. All netwrok providers agree to their terms. Think about how many providers are in the BCBS netwrok who have not sued BCBS.

Health care for Mississippians is not in jeopardy. HMA has agreed not to charge BCBS members any more than non-members.

The governor has miscalculated the problem.

Anonymous said...

You tea party folks are such hypocrites.You are against government interference,unless its something you want

Anonymous said...

HMA is getting their money's worth out of Henry Barbour.

Anonymous said...

Curious that BCBS plays the conflict of interest angle with Bryant's relative working for Butler Snow. I guess Brunini's client St. D doesn't benefit from this any.

Anonymous said...

I don't care for BCBS, and HMA even less. If push comes to shove, BCBS will prevail.

Bill Dees said...

I don't like BC/BS, but I laughed out loud when I read that Gov Doofus Bryant is complaining that Blue Cross is denying health care to thousands of Mississippians. Hey, Phil!! What about the 300,000 very poor Mississippians you've kept off of Medicaid, when the cost to the state for the first few years would be NOTHING?

Anonymous said...

The one thing that would revolutionize heath care in America is if each provider charged the actual acceptable rate for services to each customer. If St Dominic accepts $200 for a certain diagnostic procedure, then charge that across the board to each customer regardless of insurance. People would not have been scared of health care cost if they knew what the real charges were. An uninsured person who would like to pay cash would get an actual price instead of a made up outrage off of the Charge Master.
Can anyone elaborate on this?

Anonymous said...

What about the 300,000 very poor Mississippians you've kept off of Medicaid, when the cost to the state for the first few years would be NOTHING?

Dees, after the first few years how do you propose to pay the bill? You Donkeys are a broken record on this. You want it but you NEVER step up and identify where the revenue would come from after "the first few years".

Anonymous said...

So, Phil is a free market guy until public health is endangered.

Fixed it for you.
===================================
"An uninsured person who would like to pay cash would get an actual price instead of a made up outrage off of the Charge Master.
Can anyone elaborate on this?"

I did elaborate on how hospitals bill, how insurance companies discount off the "retail" price charged, and why they can't legally lower the "retail" price (although they will take it after the patient explains they can't pay the charged rate).

Look it up on a previous thread on this subject - I'm too tired to type it again.

Anonymous said...

Insurance..as it exists... Needs to go away.

Catastrophic policies? Sure

Outlaw the rest and let rates set naturally. Fat people pay more...and I bet they get skinny if they save cash.

Anonymous said...

5:56, Sorry, I guess I blinded by the crazy thought that Phil's actions just happened to coincide with a bunch of White R voters losing something.

Crazy me.

Anonymous said...

Did Guvnur Phil also issue an order vs LSU scoring any points? WTF TIGERS?

Anonymous said...

@5:00, you're generally correct on this, but the problem arises when some of those people end up paying NOTHING.....then everything gets skewed.

We should all gladly subsidize the costs for those who can't pay, but the problem is with the HUGE number of people who'd prefer to by iPhones, flat-screens and 40's rather than pay for insurance. The liberals out there still want to give those folks a fighting chance.....

Anonymous said...

Interesting that not a damned one of the above responses mentions the name Mike Chaney. It's as if Cole and Nosef are in a posting war to out-prick each other.

Anonymous said...

Judge Wingate has been assigned to the case. Good luck on getting a ruling on the motion.

Anonymous said...

The reimbursement rates, or margins, hold BCBS to a fine line as they are unable to adjust premiums or income on a daily basis as the hospitals are able to do it seems. One solution would be for BCBS to reimburse a flat fee in lieu of a percentage. Like everything else, government controls our lives through taxation and regulation.

Anonymous said...

I have no respect for Blue Cross! Furthermore, I believe their business practices against HMA are less than honorable. However, I also believe Bryant should stay out of this a mind his own business. He can't even take care of his duties for the State of Mississippi! The BCBS/HMA issue is private business not state government business. Bryant is already in way over his head - he should stay completely out of this!

Anonymous said...

Who mentioned the Tea Party?

Some anti-Tea Party nut demonizing the TPs to be pulling the strings on everything they don't like.

Conspiracy nut.

Anonymous said...

Where is the BCBSMS board of directors?

You have a monopoly, when this is over you will not.

Anonymous said...

Everyone wants lower insurance premiums right? In order for that to happen, hospitals need to stop overcharging, over testing and fraudulent billing.

Anonymous said...

HMA hospitals charge two to three times more than its peers. Where is the story on that? WHERE? They admit to charging much more because they are more efficient. Seriously? Anyone who buys that also buys that Obama Care is affordable! Don't go complaining when you have to pay a lot more in premiums for getting sub-standard care. Costs have to be managed. If they are not managed they have to be passed on to consumers. That is not an option "intelligent" people want.

Anonymous said...

7:36 For the umpteenth time, it doesn't matter what they charge BCBS patients, BCBS pays whatever the contract says they will pay (a steep discount off the original price).

Until they stopped paying.

That's not how contracts work. You don't just decide "I don't want to do this anymore" and walk away. If you don't like it, you can renegotiate for a steeper discount with the next contract.

What would happen if just decided to start sending your mortgage company $100 less each month because you felt like it?

Anonymous said...

I’m trying to understand this issue and am struggling. It seems to me there are actually two separate issues.

1. Has Blue Cross been abiding by its coverage contract with HMA or not?
2. Even if it has not, is it lawful for the Governor to temporarily force Blue Cross to interpret that contract in a way that the Governor (and HMA) says is the proper interpretation on two provisions:
A) the amount of reimbursement Blue Cross must pay HMA; and
B) whether Blue Cross does indeed have the right to terminate the coverage contract as it recently did.

As I understand it, the Governor argues that he does have that right under the Mississippi Patient Protection Act of 1995 since:
A) He says Blue Cross is the insurer for over 80% of those having health insurance in this State;
B) the reason Blue Cross insures so many people is due to an unfair legal advantage it has a result of legislation passed decades ago; and
C) the Governor’s executive order is only temporary to give HMA the chance to negotiate with Blue Cross and/or find some alternative to Blue Cross.

As I understand Blue Cross, it responds by saying the Mississippi Patient Protection Act of 1995 deals with certification of plans and does not apply. Moreover, even if it might apply, it does not here because:
A) this dispute is an ordinary contract dispute and should be treated as such without interference by the State’s Chief executive. Blue Cross says that if HMA wants an injunction, it can ask Judge Wingate for one;
B) no State official has authority to demand a particular interpretation and/or reinstatement of a private contract; and
C) even if a State official does have such authority, in this case that authority belongs to the Commissioner of Insurance, not the Governor.

I’m sure I’ve left out some details but in a nutshell, is that it? Thanks for any clarification and correction.


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