Dive Brief:
- Bon Secours is suing Anthem Blue Cross Blue Shield for $93 million over unpaid claims, escalating a contract fight between the Catholic health system and Elevance subsidiary that stretches back four years.
- Bon Secours argues Anthem owes it $73 million in unpaid claims since 2019 for care provided at its 10 Virginia hospitals, and another $20 million in lost revenue from reduced or denied claims.
- The health system also accused the insurer of using burdensome tactics to delay or deny claims, including extensive and improper audits. Anthem denies the allegations.
Dive Insight:
The lawsuit filed Monday in Virginia’s Henrico Circuit Court is the latest public clash between a hospital and health insurer over reimbursement.
Bon Secours and Anthem have been at loggerheads since 2019 over contract negotiations, but reached an impasse this summer that caused tens of thousands of Anthem members to no longer be in-network at Bon Secours facilities in multiple states.
Since the start of August, roughly 19,000 of Anthem’s Medicare Advantage members in Virginia and 50,000 of Anthem’s Medicaid members in Ohio have been out of network with the system, a Bon Secours spokesperson told Healthcare Dive.
Anthem MA members in Ohio and Kentucky and Medicaid members in Virginia are set to go out of network by October if a contract agreement isn’t reached.
Commercial, Medicaid and Medicare contracts between Anthem and Bon Secours were set to expire at the end of 2024, but Anthem’s reimbursement rates haven’t kept pace with the rising cost of labor and supplies, necessitating the network reductions, Bon Secours said. Anthem filed a cease and desist against the system over the cuts.
The new lawsuit alleges Anthem has delayed and denied reimbursement, including through measures like downcoding emergency room claims and increasing special investigations unit audits — a “bad faith attempt to bludgeon [Bon Secours] Virginia into submission in the contract negotiations,” the suit argues.
One Richmond-area hospital received 15 special investigation letters representing more than 800 emergency room accounts over an eight-week span, according to the suit.
Anthem has enacted similar onerous policies in other states besides Virginia, according to Bon Secours. Anthem owes the system $85 million in Ohio and $6 million in Kentucky, Bon Secours said.
Elevance operates BCBS subsidiaries in 14 states, including Anthem BCBS of Virginia.
A spokesperson for the payer said the lawsuit is “another attempt to distract from Bon Secours' decision to leave Anthem’s provider network and deny access to care for Medicaid and Medicare Advantage members.”
“We do not agree with the allegations stated in the lawsuit. This is the latest tactic in their efforts to demand double digit price increases from employers and individuals — in the middle of an active contract with Anthem,” the spokesperson said.
Bon Secours is owned by parent company Bon Secours Mercy Health, a nonprofit Catholic system that operates 47 hospitals in seven states and Ireland.
Bon Secours Mercy Health lost $1.2 billion in 2022, while Elevance posted a profit of roughly $6 billion.
Payers and providers are perennially at odds over negotiated rates, but more disputes are leaking out into the open as health systems request higher reimbursement to alleviate rising costs, while insurers try to keep costs low.
This case, which has resulted in tens of thousands of Medicare and Medicaid beneficiaries losing in-network access to care, illustrates the ramifications of such disagreements on patients.
Health insurers have been in the hot seat lately over policies critics say improperly deny claims, including the use of algorithms or strict utilization management requirements like prior authorizations.
In July, the Virginia Bureau of Insurance ordered Anthem to pay $300,000 after the state determined the payer wasn’t reimbursing claims in a timely manner. The same month, Anthem settled a multi-million-dollar lawsuit with Winchester, Virginia-based Valley Health System over allegations of unpaid claims.
Anthem has also paid fines or settled lawsuits over claims payments in Georgia and Indiana.
