CATHOLIC HEALTHCARE WEST: Sues Blue Cross Over Payment Practices
Following months of failed negotiations, San Francisco-based Catholic Healthcare West filed a lawsuit Thursday against Blue Cross of California, demanding $50 million for unpaid bills and accusing the insurer of engaging in practices to "delay, deny and otherwise reduce the amounts of claims it pays," the Sacramento Bee reports. CHW charged that up to 25% of claims its facilities submitted to Blue Cross have resulted in at least $50 million in underpaid or unpaid claims. The civil lawsuit adds to Blue Cross' troubles, as the insurer is already embroiled in a criminal lawsuit brought on last month by the California Medical Association. "This is D-Day," Michael Mattoch, chief counsel for the California Healthcare Association, said, adding, "When an organization the size of Catholic Healthcare West decides to make a move like this, I think it has to be taken as a clear indication of the level of frustration among hospitals." According to Blue Cross spokesperson Michael Chee, CHW notified Blue Cross that its hospitals will terminate its contracts with the insurer on July 15. Chee suggested that the lawsuit may be a negotiation tactic. "In our view, this is just a disappointing move to gain leverage," he said. Mattoch, however, views the suit as much more critical. "We've got a situation where finally the bully gets you up against the wall and you've got to throw a punch and try to knock him out," he said (Fisher, 6/10).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.