By Sarah Vogelsong

Virginia Mercury

The fight between a major health system in the Richmond and Hampton Roads regions and Virginia’s largest health insurer escalated Monday after Bon Secours Mercy Health’s Virginia operations filed a lawsuit against Anthem Blue Cross Blue Shield.

In a complaint filed in Henrico Circuit Court, Bon Secours says Anthem has adopted “slow pay and no-pay tactics” in Virginia to avoid reimbursing the system more than $73 million for services in a timely fashion and improperly deny it more than $20 million in reimbursements.

The result, said Bon Secours, is “an enormous volume of BSMH Virginia claims being arbitrarily denied, downgraded and/or pended, thereby forcing BSMH Virginia to spend an inordinate number of hours responding to excessive and unreasonable requests for additional information, and undertaking extraordinary efforts to secure payment of properly payable claims for medically necessary care rendered to Anthem members.” 

In a detailed filing, Bon Secours outlines several years of what it describes as Anthem’s failure to pay for services the hospitals provided. By the end of June 2023, the hospital system said it had identified 18,105 Virginia cases where it believed the insurer had either failed to provide reimbursement or erroneously denied it. Bon Secours says similar tactics by Anthem have led to $85 million in unpaid claims in its Ohio system and $6 million in its Kentucky system. 

Bon Secours especially criticizes a new policy it said Anthem rolled out in October 2020 requiring a third-party vendor to assess select emergency department claims and adjusting its reimbursement framework. The hospital system said it objected to the change, which it says will allow the insurer to pay less for emergency services, but said it received no response from Anthem. 

Anthem has said it does not agree with the allegations in the lawsuit and calls it “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.” 

“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,” said Kersha Cartwright, a spokesperson for Anthem parent company Elevance. “With these actions, they are closing off opportunities to work collaboratively, despite numerous requests to refocus the discussion and reach a solution.” 

The hospital system and insurance company have been fighting for months over reimbursement rates Anthem pays Bon Secours. On Aug. 1, roughly 11,000 Virginians who have Medicare Advantage plans through Anthem were affected by Bon Secours’ departure from Anthem’s network, meaning they could no longer get services from the hospital system covered under favorable in-network prices. 

If a resolution isn’t reached by Oct. 1, another 39,000 Virginians who have managed Medicaid plans through Anthem could also find themselves out of network for Bon Secours, which has numerous medical facilities in Franklin, Richmond, Newport News, Suffolk and Kilmarnock. 

Anthem has accused the hospitals of using Medicare and Medicaid patients as leverage in the broader dispute, which it says Bon Secours initiated by abruptly asking for a rate hike mid-contract. Bon Secours, in turn, has said Anthem’s reimbursement rates have not kept up with inflation or labor costs and that the company has engaged in “poor payment and contract practices,” including a pattern of backlogged and denied reimbursement payments. 

Following the termination of the Medicare Advantage contract, Anthem last week sent a cease and desist letter to Bon Secours, which it said was wrongfully denying care to people with Medicaid and employer-sponsored insurance plans through Anthem. Bon Secours called the claims “unfounded and false,” according to WRIC. 

Anthem declined to provide a copy of the letter. 

In its Monday suit, Bon Secours said Anthem has retaliated against the hospital system for its role in the dispute by denying and more closely scrutinizing claims and requiring pre-payment reviews of all emergency room visit claims from Southern Virginia Medical Center in Emporia.

“In June 2023 alone, BSMH Virginia received requests to audit 672 accounts from Anthem for Emergency Department visits — by comparison to a range of 1 to 111 accounts in prior months during 2023,” Bon Secours wrote. “This drastic increase occurred in the same month as when BSMH Virginia sent its second demand letter seeking payment.”

Cartwright said that “as recently as last Thursday,” the insurer had reached out to Bon Secours about the Medicare Advantage termination and potential Medicaid termination on Oct. 1. 

“We have not heard back,” she wrote. “We urge Bon Secours to engage in productive discussions instead of these unproductive tactics that continue to spread misinformation and put vulnerable populations at risk.” 

Both Bon Secours and Anthem have been under heightened scrutiny in Virginia in recent years. In September 2022, a New York Times investigation accused Bon Secours of using its low-income and under-resourced Richmond Community Hospital as a tool to tap large profits through a federal prescription drug program. 

And this July, Virginia’s Bureau of Insurance ordered Anthem to pay $300,000 to settle findings that it hadn’t been paying claims within a 40-day window set by the state. The company told The Richmond Times-Dispatch the settlement “does not constitute, nor should be construed as an admission of any violation of law.”

 

Reprinted courtesy of Virginia Mercury, virginiamercury.com.