Blue Cross, HMA dispute threatens insurance networks


The contract dispute between Blue Cross Blue Shield of Mississippi and Hospital Management Associates may require legislative action, including a bill preventing insurance networks for hospitals.

HMA, which owns 10 hospitals throughout Mississippi, sued the insurer for $13 million for allegedly improperly reducing inpatient payments for services and breaching contracts by unilaterally changing terms. A few weeks later, Blue Cross ended its contracts with HMA, the second largest hospital company in Mississippi.

Speaking before a state House and Senate committee meeting, HMA's Paul Hurst, senior vice president of government affairs, said Blue Cross's decision to remove some hospitals from its network could lead to hospital closings, particularly in rural areas, reported Mississippi News Now. "The ultimate result is going to be that those hospitals close. It's not a threat. It's just a reality," he said.

Doctors and an executive from the University of Mississippi Medical Center also testified at the hearing, saying Blue Cross has a monopoly in the state insurance market, which threatens patient care and access to care, the Jackson Clarion Ledger reported.

But Charles Pace, Blue Cross's director of governmental affairs, responded saying, "any closure is not the result of Blue Cross. ... The people that own these hospitals are the ones that make those decisions, not Blue Cross."

Adding that HMA hospitals' rates are too high, Pace said, "we are trying to reduce the cost of healthcare and manage those costs." Plus, "no one, no one, no one has been denied access to care."

Because of this ongoing dispute, House Insurance Committee Chairman Gary Chism (R-Columbus) said lawmakers will consider a bill that alters or eliminates insurance networks for hospitals, which would limit insurers' ability to exclude whole groups of hospitals from their networks, reported the Associated Press.

"BCBS is nearly a monopoly, and somebody needs to be regulating them," Chism said. "I know it's going to defeat the purpose of some of the networks," he said, but "if this was a power company, asking for permission to raise rates or shut down 10 hospitals, it wouldn't be allowed."

To learn more:
- check out the Mississippi News Now article
- read the Associated Press article
- see the Jackson Clarion Ledger article

Related Articles:
Mississippi Blues ends contracts with 10 hospitals
Mississippi ready to operate small business exchange
10 hospitals sue Blue Cross for shortchanging them $13M