Polk Medical Center, Blue Cross fight over payments
The insurer is sending reimbursements directly to patients
Polk Medical Center and another hospital are suing Blue Cross and Blue Shield of Georgia, accusing the insurer of sending reimbursement money for emergency room care directly to patients.
The hospitals delivering the service aren’t getting the money directly because they aren’t part of the insurer’s network.
That’s costing the hospitals money, according to the lawsuits, filed by PMC in Cedartown and Martin Luther King Jr. Community Hospital in Los Angeles — 2,000 miles apart.
Each suit also says some patients have even tried to profit from receiving the direct payments for their ER care.
The lawsuit from Polk Medical Center says that Blue Cross is seeking “retaliation” because the hospital has not agreed to “unreasonable and unfair” terms in order to be part of the insurer’s network.
By sending the money directly to patients, Polk Medical Center says, the insurer forces the hospital in turn to collect money from the patients, who are obligated to pay the facility the amount sent to them by Blue Cross.
In some cases, patients have spent the money sent to them, according to the lawsuit. And the Polk lawsuit says that some patients have sought services at the hospital to “profit” on the Blue Cross policy of payments.
Grady Memorial Hospital is not part of the lawsuit but said it too had similar problems with Blue Cross, which declined to comment on the lawsuits.
Tommy Manning, an attorney for Floyd Medical Center, said he’s not aware of any other insurer in Georgia paying the patient instead of the hospital.
The payment shift has hurt Polk Medical Center financially, hospital officials say.
Manning said he was unaware of the Los Angeles lawsuit prior to the filing of the Polk complaint.
Polk Medical Center administrator Matt Gorman said much the same in a statement he e-mailed to the Standard Journal on Friday.
“Since 2012 all Polk Medical Center has wanted from BlueCross BlueShield is a fair contract that brings the facility in-network and allows the citizens of Polk County to use their community hospital. BlueCross BlueShield’s decision to reimburse the hospital at less than half of fair market rates for some visits, and to pay patients directly for other visits is clearly a retaliatory tactic because of our unwillingness to accept an unreasonable contract. It’s unfortunate that BlueCross BlueShield’s actions have inconvenienced so many people in our community and forced us to pursue this action,” Gorman said.
An attorney representing Martin Luther King Jr. Community Hospital in Los Angeles said other Blue Cross plans in the United States use similar tactics.
The lawsuit said the practice overall has caused MLK to suffer damages in excess of $350,000.
Going after the patients for payment instead of the health plan simply hasn’t worked, attorneys for MLK said.
“We will continue to pursue collection with patients, but filing numerous lawsuits would not be fruitful, particularly given that Blue Cross Blue Shield is the party ultimately at fault,” Manning said.
Blue Cross’ paying patients directly is an insurer tool used more commonly in the West, “particularly when non-network facilities are unwilling to negotiate reimbursement related to out-of-network service,” said Janet Guptill of the Tatum firm, which provides interim chief financial officers and other executives to health care organizations.
“The insurer takes the position that the provider claim is a private pay issue between the provider and the patient, so the facility has the responsibility to collect the payment from the patient,” Guptill said.
Guptill said that when a hospital isn’t in network, its charges for ER and other care tend to be higher than the charges from facilities in the insurer’s network.
For insurers, paying patients directly is “a clever and probably effective tactic,” said Chris Kane, a consultant with DHG Healthcare. The hospital, he said, may already be dealing with other collection challenges, including those involving high-deductible health plans.
A hospital attempting to collect the money may end up alienating the patient and thereby discouraging future visits, Kane said.
And patients pocketing the money is another problem, he added. “It’s more troubling if a patient views this as a source of cash.”
Georgia Health News is a nonprofit independent news organization focusing on health care in the state.