Managed Health Care Director Orders Blue Cross To Reinstate Coverage at Pomona Valley Hospital

Department of Managed Health Care Director Cindy Ehnes last week "took the unusual step" of ordering WellPoint's Blue Cross of California health plan to reinstate coverage at Pomona Valley Hospital Medical Center, which had allowed its contract with the insurer to lapse on Tuesday following a "long-running dispute over unpaid claims that the hospital values at $4.2 million," the Los Angeles Times reports. The insurer, which was involved in a "controversial" $21 billion merger with Anthem that Ehnes approved in July 2004, had dropped the hospital from plans covering about 17,000 members.

Ehnes said she issued the order because Blue Cross failed to notify affected physicians in a timely manner. She also noted that the company's transition plan was inadequate because the six hospitals to which it directed Pomona Valley members included a nursing home, a drug rehabilitation center and a general hospital that was already 99.6% occupied, the Times reports. Blue Cross has 15 days to request a hearing where it could present a new notification and transition plan.

Ehnes said, "I want Blue Cross to keep its promises to me and to California," adding that prior to approving the merger, "I received a personal commitment from Blue Cross' leadership that they would maintain their commitment to quality care for enrollees in California."

According to Ehnes, the insurer's transition plan could affect the health of Blue Cross members in the Pomona Valley. At least five pediatricians in the area have admitting privileges only at the Pomona Valley facility.

Blue Cross spokesperson Michael Chee said the company will address Ehnes's order, adding, "This is the first time we've heard this kind of concern expressed, and we certainly don't think this is anything to do with the result of the merger." Chee added that the hospital should share the blame for allowing the contract to lapse.

Pomona Valley President Richard Yochum said it would have been irresponsible for the hospital to renew its contract while Blue Cross disputed claims representing more than half of the facility's net income of $7.2 million last year. Yochum said that Ehnes's response limited the disruption of care.

The hospital continued to offer radiation treatments to Blue Cross cancer patients after the contract lapsed, the Times reports. Pomona Valley spokesperson Kathy Roche said, "The hospital took the high road. And that meant we took a financial risk" (Girion, Los Angeles Times, 2/19).