Blue Cross Blue Shield sues hospital for waiving patient out-of-pocket expenses

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Horizon accuses Bayonne Medical Center in the lawsuit of inflating its fees and then waiving the patient's out-of-pocket expenses, a violation of Horizon's contract with its members.

IJKG Opco, LLC bought the bankrupt hospital in February 2008 to run it as a for-profit facility and early this year the BMC did not renew in-network contracts with healthcare insurers. The hospital then told patients it would accept whatever it was reimbursed by the insurer as payment in full.

Typically, healthcare providers like BMC choose to be in an insurer's network, the tradeoff being more patients but collect discounted fees, which are set by the insurer. When a hospital is out-of-network, it typically won't see as many patients, but is reimbursed by the insurer at a higher rate for the same procedures.

Horizon claims that its contract with members demands that members pay the extra costs not reimbursed by Horizon. So in essence, Horizon is suing the BMC because BMC is refusing to make Horizon members pay more.

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In response to the suit, BMC said the lawsuit would hurt patients more than the hospital. The hospital's policy of waiving co-payments and deductibles makes healthcare more affordable for patients, hospital officials said.

"BMC recently terminated its participation contract with Horizon on account of Horizon's grossly inadequate payment rates, and Horizon has chosen to act out by filing this trivial lawsuit," said attorney David Sokolow, Fox Rothschild, LLP, who dismissed the case as "meritless, baseless and frivolous."

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BMC officials says Horizon and other insurers are putting hospitals in New Jersey in "dire financial trouble" by "bullying" them into accepting "grossly inadequate" reimbursement rates.

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Horizon spokesman Dan Emmer said Bayonne Medical Center can't blame its financial problems on low reimbursement rates from Horizon.

"BMC may claim to only be serving the community, but increasing their rates by over 100 percent it's quite clear who they are really serving," Emmer said in a statement.

http://www.nj.com/hudson/index.ssf/2009/05...lue_shield.html