Allegiance, BCBS Reach Deal

Jackson Citizen Patriot

The financial impasse between Jackson's only hospital and its biggest private health-insurance company is settled.

Allegiance Health and Blue Cross Blue Shield of Michigan signed a contract this week setting hospital payment rates for the next three years.

The agreement ends nine months of difficult negotiations and guarantees Blue Cross insurance will continue to be accepted at Allegiance.

Terms of the agreement are considered confidential and were not released.

Georgia Fojtasek, Allegiance president and CEO, said the hospital did not get everything it wanted, but did gain some ground.

``It's certainly better than where we started,'' Fojtasek said.

Kim Sorget, Blue Cross vice president of provider contracting and network administration, called the deal a fair agreement for both sides.

``Difficult economic times can lead to tough negotiations,'' Sorget said. ``However, it was important to both

parties to finalize a fair agreement that moves in the

direction of meeting the needs of the community and allows our organizations to continue their long-standing relationship.''

Blue Cross covers 21 percent of all patients at Allegiance. It covers well over half, 68 percent, of patients with private insurance.

The negotiating impasse centered around the size of price increases Allegiance will receive in the new contract.

Allegiance officials accused Blue Cross of seeking prices so low they were ``unsustainable.''

Blue Cross countered that its proposals to Allegiance were fair and in line with other hospitals in the region.

The last contract expired July 1. Rates in the old contract stayed in place as negotiations continued.

The standoff went public in October, when Allegiance officials rallied Jackson business leaders to side with the hospital.

Fojtasek said 27 businesses wrote letters to Blue Cross supporting Allegiance.

``The amount of community support coalescing around Allegiance was very impressive,'' Fojtasek said.

Saginaw City, County, and Community Schools Sue BCBS of Michigan

mLive

Saginaw County, the city of Saginaw and Saginaw Township Community Schools have filed lawsuits against Blue Cross/Blue Shield of Michigan, claiming the insurer overcharged a total of about $7 million in “secret” fees they say they didn’t know were assessed.

The county has claimed the insurer overcharged it $4 million, while the township schools have estimated the amount reached $1.8 million. Both suits were filed in Saginaw County Circuit Court.

The fees, imposed on the county and the schools in 1994, weren’t disclosed until 2008, court filings said.

Meanwhile, the city of Saginaw is part of a lawsuit filed in Genesee County Circuit Court that seeks more than $1 million against the insurer over the same issue, said William H. Horton, a Troy attorney who represents the city, the county and the township schools.

Lawyers have sought to make that case a class action lawsuit with the Genesee County Road Commission and Tuscola and Cass counties, said Elizabeth A. Favaro, also an attorney for the plaintiffs.

Attorneys argued the city, schools and the county weren’t told of the “secret and hidden fee” added to hospital claims in addition to administrative and “stop loss” fees for catastrophic insurance coverage that were disclosed, Favaro and court records said.

Several Michigan counties have filed lawsuits against the insurer over the same issue, court records said.

Blue Cross/Blue Shield has denied wrongdoing. It said the plaintiffs failed to show evidence they didn’t know of the disputed charge, called an administrative services contract access fee, court records said.

“We’ve also demanded that (Blue Cross) stop charging these (access) fees,” Horton said.

The city, county and the school district are self-insured but use Blue Cross/Blue Shield to manage health insurance premium funds.

The insurer charges the access fee as part of the billed cost to handle the claims, court records said.

“These fees were expressly authorized by the Blue Cross contract,” said Blue Cross spokeswoman Helen Stojic, who added that group savings on hospital claims “year after year” gave the city, school district and the county “substantial savings that far exceed the fees.”

She did not have an exact amount.

“It’s unfortunate that knowing these facts, the groups and their attorneys have chosen to take legal action,” she said. “Despite the legal action, all of the groups continue to do business with us.

“We don’t believe these cases will be successful.”

Deputy County Controller Charles H. Cleaver said keeping Blue Cross to manage the self-insured fund doesn’t mean the county is satisfied.

“If we were happy with that, we wouldn’t file a lawsuit,” he said.

In late December opinions released this week, Saginaw County Circuit Judge Fred L. Borchard ruled against Blue Cross/Blue Shield’s motion to dismiss the county and school district’s lawsuit. Borchard also denied the request of both plaintiffs for an immediate finding of a breach of contract. The judge’s opinion said the contract language on the access fee was “ambiguous,” but he would leave it to a jury to decide if a breach of contract occurred.

Any money that the county might recover would go into an employee health insurance fund, Cleaver said. It’s premature to say how the schools might handle a judgment, Favaro said.

Several Michigan counties have filed lawsuits against the insurer over the same issue, court records said.

In a settlement with Oakland County, Blue Cross/Blue Shield agreed to pay $650,000 and provide three years of free administration of Oakland’s self-insured plan, The Detroit News reported in November. The free administration was worth $8.5 million to the southeast Michigan county, one official estimated.

Michigan BCBS Adds U Of M To PPO

Ann Arbor dot Com

The University of Michigan has been added to Blue Cross Blue Shield of Michigan's Medicare Advantage Network and will allow seniors who purchase the plan to access any provider at the U-M hospitals, it was announced Wednesday.

The Medicare Plus Blue PPO, which was announced in October, has lower premiums than the original Medicare Supplemental Plan C product, plus the Medicare Part D prescription drug plan, and offers additional benefits, the non-profit insurer said.

For instance, premiums will cost between $61 and $141 under the Medicare Plus Blue PPO, compared to $183 per month with the supplemental Plan C product. The PPO plan has preventative dental services, routine physicals, exanded home infusion therapy, prescription drug coverage, total body skin exams and resources to navigate the health care system, according to a release.

The network has 23,000 physicians and 136 hospitals in Michigan. Open enrollment is Jan. 1 through March 31. For more information, call 877-469-2583 or visit bcbsm.com.

BCBS Of Michigan Awards Grants To 47 Free Health Clinics

Reuters

Blues contribution to free clinics makes health care accessible to the uninsured and underinsured.



DETROIT -- Blue Cross Blue Shield of Michigan is awarding free clinics throughout the state a total of $1 million in grants that will provide health services to individuals and families without Michigan health insurance. With the Michigan unemployment rate currently at 15.3 percent more Michigan residents than ever are going without health insurance.

"In these difficult times, free clinics are putting health care in reach for people who need it," said Lynda Rossi, Blues vice president for Social Mission and Public Affairs. "Free clinics are a place for uninsured people to turn to for quality health care. Uninsured residents who get care in free clinics often otherwise would delay seeing a physician because of the cost. Delay
often leads to more expensive care in emergency rooms and even hospital stays."

The Blues have contributed $5 million to free clinics since 2005. This year's grant program aims to help clinics provide important services like primary care and behavioral health care, case management, dental services, specialty and diagnostic care, and prescription drugs.

"Most of our patients are dealing with one or more long-term diseases such as diabetes, high blood pressure and asthma," said Dave Law, executive director of the Joy-Southfield Health and Education Center in Detroit. "We also supplement our primary care with preventive health education and disease management strategies."

About 2.5 million Michigan residents under 65 years old went without health insurance at some time between 2007 and 2008. Many of these individuals, along with the underinsured, are able to seek medical care from these clinics instead of making a trip to the emergency room or forgoing care. Access to free clinics also helps curb the rising cost of health care. In 2008, Michigan free clinics were able to provide an estimated 122,000 patient visits
combined. Most other residents over 65 are covered under Michigan medicaid or Michigan medicare.

"With this grant from Blue Cross Blue Shield of Michigan we will be able to expand our scope and quality of services while using health information technology to efficiently measure health outcomes. As a result, we will be able to deliver high-quality, low-cost health care to our patients at no cost to them," said Law.

The following free clinics received a grant from the Blues this year:

Southeast Michigan

-- Brownstown Twp. - Wyandotte Clinic for the Working Uninsured, 23050
West
Rd., Suite 260, 734-365-3560
-- Detroit - HUDA Clinic, 1605 W. Davison Ave., 313-865-8446
-- Detroit - Joy-Southfield Health and Education Center, 18917 Joy Rd.,
313-581-7773
-- Detroit - Order of Malta Medical/Dental Clinic, 4860 15th St.,
313-894-2240
-- Detroit - St. Frances Cabrini Clinic, 1234 Porter St., 313-961-7863
-- Detroit - University of Detroit Mercy Counseling Clinic, 4001 W.
McNichols, 313-993-1093
-- Mt. Clemens - Mt. Clemens Regional Medical Center Medical Outreach
Clinic, 1000 Harrington Blvd., 586-493-8000
-- Pontiac - Gary Burnstein Community Health Clinic, 90 W. University,
248-758-1690
-- Pontiac - Mercy Place Clinic, 55 Clinton Street, 248-333-0840
-- Southfield - Tri-County Dental Health Council, 29350 Southfield Rd.,
Suite 35, 248-559-7767
-- Warren - St. John Community Health, 28000 Dequindre, 586-753-1484
-- West Bloomfield - Project Chessed (Jewish Family Services), 6555 W.
Maple Rd., 248-592-2300
-- Westland - Project H, Wayne County Family Center, 30600 Michigan Ave.
-- Ypsilanti - Hope Dental Clinic, 9 S. Adams, 734-481-0111

Mid-Michigan

-- Brighton - VINA Community Dental Center, 400 E. Grand River Ave.,
810-844-0240
-- Hillsdale - St. Peter's Free Clinic of Hillsdale County Inc., 3 N.
Broad
St., 517-437-4041
-- Jackson - St. Luke's Clinic, 132 Seymour Ave., 517-783-1117
-- Lansing - Care Free Medical & Dental, 5135 S. Pennsylvania Ave.,
517-887-5992
-- Pinckney - Faith Medical Clinic, 122 Howell St., 734-474-4627


Flint/Tri-Cities

-- Essexville - Helen M. Nickless Volunteer Clinic, 1460 W. Center Rd.,
989-895-4830
-- Flint - Genesee County Free Medical Clinic, 2437 Welch Blvd.,
810-235-4211
-- Lapeer - Loving Hands Clinic, 148 Maple Grove Rd., 810-667-8933
-- Saginaw - Cathedral Mental Health Care, 705 Hoyt Ave., 989-759-3356
-- Saginaw - Community Prescription Support Program, 401 Holden St.,
989-907-5602
-- Saginaw - Healthy Futures of St. Mary's of Michigan, 2215 N. Center
Rd.,
989-907-8108

West Michigan

-- Allegan - Seeds of Grace, 311 ½ Hubbard St., 269-288-0253
-- Battle Creek - Nursing Clinic of Battle Creek, 34 Green St.,
269-962-6565
-- Coldwater - Presbyterian Health Clinic of Branch County, 15 Church
St.,
517-278-7848
-- Grand Rapids - Catherine's Care Center, 224 Carrier NE, 616-336-8800
-- Grand Rapids - Health Intervention Services, 15 Andre SE, 616-475-8446
-- Grand Rapids - Oasis of Hope Center, 522 Leonard St. NW, 616-451-8868
-- Grand Rapids - Project Access, 233 E. Fulton, Suite 226, 616-459-1111
-- Hastings - Barry Community Free Clinic, 1230 W. State St.,
269-945-4444
-- Holland - Holland Free Health Clinic, 99 W. 26th St., 616-392-3610
-- Kalamazoo - Free Clinic of Kalamazoo, 2918 Portage St., 269-344-0044
-- Marshall - Fountain Clinic, 111 N. Jefferson, 269-781-0952
-- Three Rivers - Riverside Health Clinic, 207 E. Michigan Ave.,
269-273-3744
-- Zeeland - City on a Hill Ministries Health Clinic, 100 S. Pine St.,
Suite 140, 616-748-6009

Northern Lower Peninsula and Upper Peninsula

-- Big Rapids - Hope House Free Medical Clinic, 15085 220th Ave.,
231-796-0807
-- Cadillac - Cadillac Area Community Health Clinic, 521 Cobbs St.,
231-876-7818
-- Cheboygan - Northern Care Center, 225 Water St., 231-333-3019
-- Grayling - AuSable Free Clinic Inc., 1250 E. Michigan Ave.,
989-348-0740
-- Manistee - Manistee Area Community Clinic, 385 Third St., 231-309-8940
-- Petoskey - Community Free Clinic, 820 Arlington, Suite 6, 231-487-3600
-- Traverse City - Traverse Health Clinic, 3147 Logan Valley Rd.,
231-935-0668
-- Marquette - Medical Care Access Coalition Volunteer Clinic, 1414 W.
Fair Ave., Suite 26, 906-226-4400
-- Sault Ste. Marie - Community Health Access Coalition Volunteer Clinic,
508 Ashmun St., 906-635-7451



Blue Cross Blue Shield of Michigan has a unique mission that is different from other health insurance companies. The company is committed to focusing on reducing health care costs and improving quality, increasing access to health care coverage and services, and improving the health status of Michigan's residents, particularly children.

BCBS of Michigan is also concerned with senior services, including:
Assisted Living in Dearborn
Retirement Facilities in Dearborn
Senior Living in Wayne County

Blue Cross Blue Shield of Michigan, a nonprofit organization, provides and administers health benefits to 4.7 million members residing in Michigan in addition to members of Michigan-headquartered groups who reside outside the state. The company offers a broad variety of plans including:

Traditional Blue Cross Blue Shield; Blue Preferred®, Community Blue(SM) and Healthy Blue Incentives(SM) PPOs; Blue Care Network HMO; BCN's Healthy Blue Living(SM); Flexible Blue(SM) plans compatible with health savings accounts; Medicare Advantage; Part D Prescription Drug plans, and MyBlue(SM) products in the under-age-65 individual market. BCBSM also offers dental, vision and hearing plans. Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association. For more company information, visit bcbsm.com.


SOURCE Blue Cross Blue Shield of Michigan

Blue Cross Grants Additional $6 Million To MHA

Story from Crain's Detroit Business

Blue Cross Blue Shield of Michigan has decided to provide a second $6 million grant to the Michigan Health and Hospital Association for research to improve health care quality and patient safety, and to reduce costs.

The Blues made an initial $6 million grant in 2004.

The funding will go to MHA’s Keystone Center for Patient Safety and Quality.

“The MHA Keystone Center projects have already delivered a phenomenal return in improving safety and quality,” said Blue Cross CEO Dan Loepp in a statement.

Most of Michigan’s 144 hospitals have participated in the center’s projects – that include reducing hospital-acquired infections, improving care for mothers and newborns and increasing patient flow in emergency departments.

The Center's projects include reducing hospital-acquired infections, improving care for mothers and newborns and increasing patient flow in emergency departments.

For example, improving quality in hospital intensive care units the past four years have saved 1,800 lives, cut 129,000 hospital days and saved $247 million in unnecessary costs, Blue Cross said.

Hospitals also have saved more than $10 million by reducing urinary tract infections acquired from hospital catheters.

Spencer Johnson, MHA president, said patient lives have been saved by following best practices discovered through the research.

“The Michigan hospitals that participate in the MHA Keystone Center programs have achieved significant, measurable patient safety improvements – errors have been reduced and lives have been saved,” said Johnson in a statement.

Attorney General Protests Blue Cross Rate Hikes, Offers Own Plan

Story from the Detroit Free Press

Michigan Attorney General Mike Cox filed a petition Thursday to stop proposed individual rate hikes for more than 400,000 individual Blue Cross Blue Shield of Michigan customers.
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"Blue Cross should stop putting profits over people and focus on its mission as the insurer of last resort," Cox said in a statement announcing the challenge.

Overall, average increases sought would be 56% for non-elderly people buying their own insurance; 42% for group conversion policyholders who purchase coverage they once had at work, and 31% for seniors with supplemental Medicare, also known as Medigap policies.

Michigan's Office of Financial and Insurance Regulation was to have ruled on the rate hikes by June 2. Now the office has 30 days from Thursday to hold the hearing.

Blue Cross has said it needs the rate hikes to offset mounting losses for its individual policies, to exceed $1 billion through 2011, according to Blue Cross estimates. It also is laying off or not filling 1,000 jobs, has frozen executive and board salaries and cut spending on advertising, lobbying and other expenses, the Detroit-based company has said.

In a statement, Blue Cross said that it would prefer not to raise rates but "unfortunately our broken regulatory system puts us in this uncomfortable position."

Cox has had mixed results with rate challenges.

He and Ann Arbor attorney Joe Aoun lost a challenge earlier this month of 2007 Blue Cross rate hikes for non-elderly people who buy their own Michigan health insurance. But Cox won a separate challenge in 2007 to raising Medigap rates.

Cox has issued his own 10-point plan to reform Michigan's health insurance industry. He said challenges like the one he filed Thursday will be reduced by proposals pending in the House.

Rep. Marc Corriveau, D-Northville, said he has tried unsuccessfully to work with Cox to frame the bills to retain his oversight. His proposals would allow the Attorney General to file a challenge to a rate hike, but would shorten the time he could do it.

BCBS of Michigan Raises The Price For Individual Health Coverage

Story from the Detroit News

As more Michigan residents flock to Blue Cross Blue Shield of Michigan to buy their own Michigan health insurance, the state's largest insurer is replacing several types of individual policies with plans that will cost up to $600 a year more -- and come with higher co-payments and other out-of-pocket costs.

The new insurance plans -- with monthly premiums ranging from $51 to $292 per a person -- are on sale now and take effect Wednesday.

On March 27, Blue Cross stopped enrolling new consumers in several older plans, including Value Blue, a catastrophic coverage policy, and its no-deductible Individual Care Blue. The changes don't affect Blue Cross members enrolled in those plans. Instead, the new rates will apply to newly unemployed residents seeking to replace workplace coverage by buying their own insurance from Blue Cross. The new plans also differ from those for which Blue Cross is seeking state permission to raise rates and would not be affected if that request is approved.

With the rollout of these new plans, Blue Cross has introduced a lengthy application that includes optional health questions and ties insurance agents' commissions to the medical condition of new enrollees.

The changes are so drastic that some insurance agents say Blue Cross is deliberately making its money-losing individual policies less attractive to slow sales. Blue Cross contends that it's simply keeping up with market trends, as well as the rates and plan offerings of its private-sector competitors.

As the state's insurer of last resort -- a responsibility tied to its tax-exempt status -- Blue Cross must cover all Michigan residents, regardless of their medical history. But that arrangement, Blue Cross officials say, leaves them with the state's sickest and costliest members. Last year, Blue Cross lost $133.2 million on individual insurance policies, dragging its bottom line to a $144.9 million loss for 2008.

Insurance agents say the new rates will make it harder to sell the plans. New members aren't going to want to pay more in premiums for higher out-of-pocket costs, especially if there are better deals offered by other insurers.

"It's not good for the consumer," said Patrick Pennefather, president of the Michigan Association of Health Underwriters, which represents Michigan health insurance company agents and buyers for employer groups. The new plans, he added, are going to slow down sales for Blue Cross, a move that could help stem the rising tide of losses on individual policies.

Some agents are likely to stop selling Blue Cross' individual policies altogether because the commission structure lowers incentives for enrolling sickly customers into its individual plans, Pennefather added.

Blue Cross's new incentive structure offers a 15 percent commission to agents who sign up healthy members and only 2 percent for signing new enrollees with severe medical problems. A 2 percent commission could translate into only a couple of dollars a month on some policies, say insurance agents, and is much lower than the 8 percent commissions previously offered by Blue Cross on all policies, regardless of the applicant's health status.

Blue Cross said the tiered commissions better match incentives offered by their rivals in the individual insurance market.

"It may drive a lot of agents out of the individual insurance business. In fact, many have said they plan to get out of it," Pennefather said, noting that agents can make 20 percent with other private insurers.

Some Blue Cross critics, including Michigan Attorney General Mike Cox, have questioned why Blue Cross is collecting health information, since that is at odds with the company's mission as the state's insurer of last resort. Cox's office has said it's investigating whether the changes are lawful.

Answering the questions about health status, however, is voluntary and won't affect consumer eligibility or rates, but will help applicants qualify for lower co-payments, Blue Cross officials said.

Blue Cross also points out that it still pays at least some portion of the commission to agents for all applicants. Most other insurers pay no commission if they end up rejecting the applicant, said Helen Stojic, a Blue Cross spokeswoman.

As for the new plan prices and coverage, Stojic said Blue Cross hopes to better reflect the marketplace, where deductibles and higher out-of-pocket maximums are common.

The insurer also contends its rates are still better than most plans for people with serious medical conditions.

"Our plans are aligned more closely with those in the market, with one important difference: We still don't medically underwrite and we are still the insurer of last resort," Stojic said.

Unlike rate hikes for existing customers, state regulators don't require Blue Cross to seek public input before introducing new plans or closing new enrollment in existing policies.

Blue Cross is seeking rate hikes on its existing individual policies that cover about 400,000 members. It's asking for an average rate hike on three types of policies: a 56 percent increase on individual plans, 42 percent on group conversion coverage (which extends benefits from a former employer) and 31 percent for Medigap plans.