health care

Blue Cross, Westerly tussle over contract

Posted 4/30/12

WESTERLY – Blue Cross & Blue Shield of Rhode Island, saying that they are owed more than $75,000 in payments for health insurance provided to employees at Westerly Hospital, have asked Superior Court Judge Brian Stern to compel the hospital to pay or allow the health insurer to end employees’ coverage.

The conflict began when Westerly Hospital, in receivership under court-appointed special master Mark Russo, reduced its payments, claiming that Blue Cross was overcharging the hospital by 10 percent, based on financial analysis done by hospital consultants. In an effort to bring payments in line with what the hospital thought the premiums should be, the hospital reduced its payments, according to James O’Keefe, the hospital’s chief financial officer and chief restructuring officer.

In a statement, Blue Cross said that as a matter of Rhode Island law, the health insurer was obligated to establish premiums in accordance with its filed rating formula and rate factors. “The Office of Health Insurance Commissioner has approved those filings and requires that rates be established consistent with such filings,” the statement said. “The premium rates for Westerly Hospital were developed in accordance with those requirements and were contractually agreed to by Westerly Hospital, effective Jan. 1, 2012.”

Russo is opposing the motion. “We’re not going to be intimidated and we’re not going to be overcharged,” he told The Westerly Sun.

Blue Cross is currently in mediation ordered by Superior Court Judge Michael A. Silverstein with Landmark Medical Center and its potential buyer, Steward Health Care, to resolve a dispute over fees the health insurer says it is owed by Landmark for health insurance coverage.

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