Mayor Asks AG To Investigate Blue Cross Reimbursement Rate Negotiations With Landmark

Mayor Leo Fontaine has added his voice to those calling for fair reimbursement rates from Blue Cross Blue Shield RI for , asking Attorney General Peter Kilmartin to review the now-stalled negotiations.

Fontaine said he's asked Kilmartin to investigate whether the insurer has violated anti-trust law.

"I must speak up on behalf of the people of our community, and I hope the parties will resolve their differences at the table, based upon financial realities in the best interest of all involved.  The people of this city have spoken with one loud clear voice that they want to work with Steward to save Landmark, and they should not be ignored,” Fontaine wrote in a release Tuesday.

According to an ad Steward Healthcare, which recently cleared the last regulatory hurdle in its intended purchase of Landmark Medical Center, has run in the Providence Journal posted on the blog Health Care Renewal,  BCBS refused to give Landmark a long-term contract without the participation of Steward in May.

"Steward, trying to be helpful, proposed base rates that were 5% below the state median, quality metrics used by the federal government, and a commitment to payment reform. But suddenly, the coffers had run dry. Blue Cross refused to even discuss the proposal," the ad reads.

The Providence Business News reports the BCBS contract with Landmark expired July 16, and the insurer has filed a modification plan with the Department of Health to stop coverage for the hospital.

“I am no expert in antitrust law, but I have not been convinced that this is really a fight about reimbursement rates.  It looks a lot more like our local non-profit health insurer is using its dominant position in the marketplace to bully a failing community hospital out of existence.  I don’t think the people of the Blackstone Valley who rely upon this hospital should sit idly by and allow that to happen,” Fontaine wrote.

On Monday, Senators Marc A. Cote (D—Dist. 24, Woonsocket, North Smithfield) and Roger A. Picard (D—Dist. 20, Woonsocket, Cumberland) called on residents of area communities to lend their support to ensuring good faith negotiations between the insurer and the hospital.

"“We urge the parties to return to the bargaining table to resolve this issue, but we are concerned that an application for plan modification recently filed by Blue Cross with the Rhode Island Department of Health (RIDOH), if granted, would remove any incentive for Blue Cross to bargain in good faith,” said Senator Cote. “We just want what’s best for the many communities that rely on this hospital for support.”

Both senators have called on Michael Fine, RI's health director, to reject Blue Cross Blue Shield’s application for plan modification, but that’s not enough, Senator Cote said.

“I am calling on all northern Rhode Islanders and surrounding Massachusetts communities to write to the director of the Department of Health with their concerns about the possible loss of access to medical services at the Woonsocket hospital,” he said. “This is an instance where we all need to fight for what is right and equitable. Approval of Blue Cross Blue Shield’s application will simply put hospital negotiations in a position to fail.”

Cote said he and Picard are drafting a letter to Fine responding to a claim by Blue Cross that the insurer's coverage is not a significant factor in the hospital's operation. Cote referred to a recent article in the Providence Journal that stated Landmark has lost half of their scheduled elective surgeries since Blue Cross sent letters to patients notifying them they were discontinuing coverage for the hospital.

"The fact is, we can't over-state their importance," Cote said.

Landmark has also sued Blue Cross Blue Shield in Superior Court, claiming the insurer's reimbursement rates contributed to the hospital's financial failure, which its sale to Steward is intended to remedy.

Today was the deadline for the closing of the purchase of Landmark by Steward Healthcare set by Kilmartin's May 25 approval of the deal. The Providence Business News reports the deadline has been extended to July 27.