Dive Brief:
- Five Texas hospitals are suing Pennsylvania insurer Independence Blue Cross, a local licensee of the Blue Cross Blue Shield Association, for failing to pay more than $345,000 in claims between 2022 and 2024.
- The hospitals, which are all affiliated with HCA Healthcare, argue that IBX wrongfully denied or underpaid claims for medically necessary services to eight of its members based on lack of authorization, lack of medical necessity and coding issues, even for emergency services.
- The claims all stemmed from the BCBSA’s BlueCard Program, a highly controversial nationwide network that allows BCBS members to receive in-network services outside of their home plan’s local service area.
Dive Insight:
The BlueCard program links independent licensees into a single unified network, enabling members of regional plans to access in-network care and receive contracted discounts of a different Blues plan when they travel or live in another state. The program is also used by plans to track claims and make prior authorization requests between connected Blues plans and providers.
However, the program has been a point of friction between payers and providers.
A decade-long, national class action lawsuit alleged that BCBSA eliminated price competition across state lines by mandating that all out-of-state plans, also known as “home” plans, adopt the same reimbursement rates negotiated by the local “host” plan. This artificially depressed reimbursement rates and forced hospitals to accept lower rates for furnishing care to traveling patients, according to the lawsuit.
Providers have also complained that the BlueCard program has allowed out-of-state insurers to deny medical bills based on their own rules even if hospitals followed the requirements from their local Blue plan. This often occurred when a home plan required a prior authorization for services.
BCBSA agreed to pay more than 3.3 million providers $2.8 billion last year to settle the antitrust case and make the BlueCard program more transparent. The changes to the program included real-time messaging, faster payments from Blues plans and more standardized appeals and prior authorizations.
Despite the settlement, some providers including the Mayo Clinic, the Children’s Hospital of Philadelphia and Mass General Brigham, have opted out of the settlement to pursue their own litigation against BCBSA and the BlueCard program.
The lawsuit, filed earlier this month in federal court, argues that IBX required prior authorization for emergency care, in violation of federal and state laws. It also says IBX failed to provide specific clinical rationale for adverse determinations and conduct proper medical necessity reviews for appeals despite the hospitals’ requests.
The plaintiffs in the lawsuit are HCA Houston Healthcare North Cypress, HCA Houston Healthcare Medical Center and The Woman’s Hospital of Texas, which are all owned by HCA. The lawsuit also includes Methodist Healthcare System of San Antonio and St. David’s Medical Center, which operate as joint ventures with HCA. They’re seeking reimbursement for the denied claims.
IBX said in an email that it does not comment on pending litigation.