BLUE CROSS: Hospital Charges Unfair Negotiating Tactics
Fed up with what it calls Blue Cross of California's favoritism to larger hospitals, Coast Plaza Doctors Hospital in Norwalk has severed its contract with the nonprofit insurer and "has filed a wide-ranging discrimination lawsuit." The Los Angeles Times reports that the suit charges that "Blue Cross favors certain larger hospitals to the detriment of other, smaller hospitals in an attempt to put small hospitals out of business." The lawsuit also contends that Blue Cross' insistence on confidentiality in financial dealings with hospitals is an attempt "to further its discriminatory conduct." Coast Plaza Board Chair Gerald Garner said Blue Cross had been paying the hospital "only 6% to 8%" of its enrollee's bills, "often very late." He added that Blue Cross gave Catholic Healthcare West an 8% reimbursement increase in negotiations last year, while Coast Plaza received only an 0.8% increase. Blue Cross spokesperson John Cygul countered that rates "take into account the mix of services that a facility has to offer" and therefore, "the rates for services will be different for facilities depending on the level of sophistication of services offered" (Reich, 3/11).
In related news, Marshall Hospital in El Dorado County and Blue Cross "are down to the wire in negotiating a contract," with the parties facing an Apr. 30 deadline, at which time 8,000 Blue Cross customers may be forced to pay out-of-pocket or find another hospital. A hospital statement acknowledged that "with fewer than 60 days remaining on the contract ... the public has the right to know that the contract is in jeopardy." Arguing that residents will not be adversely affected if Marshall's quest for higher reimbursements end in a severed contract because they will still be able to go to other area facilities. Blue Cross' Elise Anderson said, "There is still a lot of choice. People think that we would be leaving them high and dry without a facility. That is not the case." But Sue Allen of the El Dorado County Office of Education, Blue Cross' largest single local group, said, "It's not conceivable for employees to go to Folsom or the Sacramento area. We're a small community. We live in the mountains. We don't have access to bigger places. And we all have Blue Cross" (Rhodes, Placerville Mountain Democrat, 3/5).