Blue Cross, CHW Settle Lawsuit Over Reimbursement Practices
Blue Cross of California announced yesterday that it has reached a settlement with Catholic Healthcare West in a lawsuit alleging that the insurer "routinely declined to pay for patient services as a way to boost profitability," the Los Angeles Times reports. Although the two companies reached a contract agreement in August, the dispute surrounding reimbursements has continued through the past six months. In the suit, filed last June, CHW argued that "Blue Cross has engaged in a pattern of practices designed to increase its own profitability by delaying and denying payments due to hospitals that provide necessary care" (Hirsch, Los Angeles Times, 2/15). The suit also contended that Blue Cross owed more than $50 million in unpaid services (Mansfield, Ventura County Star, 2/15). While neither company disclosed the terms of the settlement, the Times reports that they "did agree to work jointly to improve patient care as well as nursing recruitment and retention." According to John Ray, CHW senior vice president, the August contract agreement and "greater efforts to electronically connect CHW's billing system and Blue Cross' payment system" should mitigate further reimbursement disputes (Los Angeles Times, 2/15). "It's the kind of deal that both sides walked away with what they needed," he said (Ventura County Star, 2/15). The settlement follows an announcement on Tuesday by Blue Cross' parent company, WellPoint Health Networks, that its fourth-quarter profits increased 14% (Bloomberg News/Los Angeles Times, 2/14).
Separately, Blue Cross also announced yesterday that it has a reached a new contract with St. John's Health Center that will give the Santa Monica hospital a "more favorable" arrangement for treating Blue Cross patients. Citing low reimbursements, St. John's stopped accepting Blue Cross insurance last August, although it reversed that policy earlier this month after patient load declined at the hospital. The Times reports that the settlements with CHW and St. John's "appea[r] to resolve some of the tensions between Blue Cross and several ... providers that in the last year have criticized the insurer over its payment practices and low reimbursement fees."
Finally, CHW reached an agreement earlier this week with the California Nurses Association that "paves the way for union organizing efforts" at CHW hospitals. Under the agreement, which union officials say goes "well beyond existing labor law governing union representation campaigns and elections," nurses will have greater flexibility in discussing CNA representation at CHW hospitals. CHW spokesperson Lori Andrete said the agreement "shores up" the hospital chain's relationship with its nursing staff and "allows it to address more important issues than fighting over how to conduct a representation campaign." Currently CNA represents 5,000 of the 14,000 registered nurses at CHW hospitals (Los Angeles Times, 2/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.