Saginaw hospitals respond to lawsuit against Blue Cross

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The U.S. Department of Justice and Michigan Attorney General Mike Cox are suing Michigan’s largest insurer, Blue Cross Blue Shield of Michigan, for forming anti-competitive contracts with hospitals, including St. Mary’s of Michigan and Covenant HealthCare in Saginaw.

Both St. Mary’s and Covenant have cooperated with the investigation, the attorney general’s office said.According to the lawsuit filed Monday, the insurance provider’s contracts includes clauses that require hospitals to charge other insurers more than they charge Blue Cross, giving Blue Cross an unlawful advantage. These clauses give Blue Cross the equivalent of “Most Favored Nation” status, according to the office of the attorney general, and result in “driving up prices for consumers and damaging competition in the health care market place — all to benefit Blue Cross’s market share.”

In all, 23 large and 45 rural Michigan hospitals were found to have entered into anti-competitive contracts with Blue Cross.

At Covenant, the Blue Cross contract requires the hospital to charge most of Blue Cross’s competitors at least 39 percent more than the hospital charges Blue Cross.

“When making business decisions, Covenant HealthCare keeps the best interest of our patients and our community at heart and is committed to providing the best possible care to any and all patients that seek medical attention 24 hours per day, 365 days per year,” said Kristin Knoll, a spokeswoman for Covenant.

Knoll said she could not discuss specifics of the lawsuit or contracts.

“However, a number of our patients are covered through contracts that are not subject to the Blue Cross Blue Shield of Michigan clause restrictions,” Knoll said.

“Covenant is complying with the Department of Justice to assist in any way possible with the investigation.”

A spokeswoman for St. Mary’s of Michigan said the hospital is aware of the lawsuit but is declining to comment at this time.

Blue Cross, a nonprofit insurance provider, defended its practices, saying the suit seeks to restrict the insurer’s ability to provide the most deeply discounted rates from Michigan hospitals.

Andrew Hetzel, a spokesman for Blue Cross, said the insurer’s contracts have saved customers billions of dollars.

“Negotiated hospital discounts are a tool that Blue Cross uses to protect the affordability of health insurance for millions of Michiganders,” Hetzel said.

“Through this lawsuit, the federal government seeks to deny millions of Michigan residents the lowest cost possible when they visit the hospital.”

He said the lawsuit will only hurt customers — of which it has about 4 million. Hetzel also said hospitals willingly enter into contracts with Blue Cross, which he said has 50 percent or less of the market share in most of the counties in the state.

“If this lawsuit succeeds and our ability to stipulate that Blue Cross will receive the deepest discounts is taken away from us, it will negatively change how our contracts work to benefit our members and customers,” Hetzel said.

“It will likely increase the cost of care that our customers receive in the hospital setting.”

Consumers Energy Suspends $2.3 Billion Coal-Fired Power Plant near Bay City

Bay City News

 

HAMPTON TWP. — Consumers Energy is halting a project to build a $2.3 billion coal-fired power plant on the shores of Saginaw Bay in Hampton Township.

Officials from the company announced today that Consumers is deferring - not canceling - plans for the 830-megawatt plant that was expected to create 1,800 construction jobs and more than 100 permanent jobs when the facility went online in 2017.

Officials said the decision to put off the project was made because of reduced customer demand for electricity and forecasted lower natural gas prices, among other factors.

"It's a combination of customer demand just being lower and significantly lower natural gas and electricity prices," said David G. Mengebier, senior vice president of governmental and public affairs for Jackson-based Consumers Energy.

Mengebier said the company, in 2009, generated 900 megawatts of energy less than it projected. He also said original projections for the amount of energy the company will generate in 2017 - when the new plant was to become operational - were 700 megawatts above what the company now believes it will generate, based on customer demand.

"We continue to believe that new clean coal generating capacity will be in the long-term best interests of our 1.8 million electric customers as part of a balanced energy portfolio," John Russell, president and CEO of Consumers Energy and its parent company, CMS Energy, said in a statement.

"But, the current timetable for the new unit isn't consistent with today's market conditions. Based on the latest market dynamics, we have determined that it is in the best interest of our customers to defer development of the new plant at this time."

Mengebier said the deferment has nothing to do with opposition from the Natural Resources Defense Council or other environmental groups that oppose construction of a new coal-fired plant.

"They'll claim victory, but the fact is ... it had nothing to do with whether to build this plant or not," Mengebier said."It had everything to do with what are the market conditions and how do they affect the economics of this project and the timing of it?"

Consumers Energy announced plans to build the new plant at its Karn-Weadock Generating Complex in 2007 and received its air permit for the project from the Michigan Department of Environmental Quality in December.

The NRDC filed a lawsuit in Ingham County Circuit Court in March challenging the air permit.

As part of the permit process, Consumers agreed to shutter up to seven of its oldest, less efficient coal-fired power plants in Michigan when the new plant in Hampton Township came online.

Mengebier said the company will now take another look at those plants to determine their future and whether to retire, mothball or upgrade those facilities.

Meanwhile, Mengebier said Consumers Energy plans to invest $730 million from 2011 to 2015 to make environmental upgrades to the Karn-Weadock plant based on future clean air and clean water legislation.

He said that work, and other future projects at the plant, is expected to create and retain more than 4,300 jobs through 2018.

Mengebier said coal still will be a part of Consumers Energy's future.

"I think that there is a consensus in this state for building new clean coal plants," he said. "I think it will be part of Michigan's future."

Local politicians want to believe it will still be a part of Bay County's future, too.

"We obviously want to see this move forward," said State Rep. Jeff Mayes, D-Bay City, who has been an avid supporter of the project.

"We also know there's a significant investment in Michigan regarding energy today, not only in terms of green energy in the region and around the state, but also anticipated in transmission."

Mayes said when it comes to the construction of the plant, under the energy laws we are under, it puts any investment under greater scrutiny.

"The demand for power has dropped off more between 2000 and 2008 than anticipated," said State Sen. Jim Barcia, D-Bay City, who also supports the project. "It doesn't mean it's a death sentence for the plant but it certainly extends the time frame in which Consumers Energy will pursue this."

Barcia said he believes the company is doing what it believes to be the best thing for its customers and the future of energy in Michigan.

Michael Seward, president of the Bay Area Chamber of Commerce, reiterated that there will still be investment in Bay County from Consumers Energy and today's announcement is not a death knell for the proposed plant.

"We have to remember this is a deferment and they aren't canceling the program," Seward said. "There's still going to be a very large investment in the area in Karn-Weadock."

Russell said Consumers Energy will continue monitor customer demand, fuel and power prices and other market conditions, but has set no timetable for a future decision about the project.

Secret of Saginaw Basketball's Present Lies in its Past

The Detroit News

Less than a half hour after classes ended for the day at Saginaw Heritage High School, Preston Walker Jr. is dribbling on the hardwood at a local gym across the street.

"I work for about four hours every day on my game," said Walker, who went to the Class A district finals with Heritage this season before the team bowed out to its crosstown rival, Saginaw Arthur Hill.

Like many youths in this struggling, old manufacturing town, Walker's life is largely about basketball. They have role models in abundance, including Draymond Green, the emerging star at Michigan State, who is performing brilliantly in the NCAA Tournament.

"Draymond was my coach in eighth grade in a basketball camp," Walker said. "So, I got to work with him. And in eighth grade going into ninth grade, I worked with him at open gyms at Saginaw High.

"He was real nice. He's hard-working," Walker said. "He's always telling me to stay in school and keep my grades up."

Vexed by street gangs and crime and struggling to mend the local economy, Saginaw is increasingly renowned as the incubator for a long line of successful men's and women's college and NBA players like Green, who won two state championships at Saginaw High. Hang around the gyms and streets of the city for even an afternoon, and one learns quickly that there is an informal, organic system in place to bring local kids up playing the game, and playing it right.

And it has been going on for five or six decades.

"All those Flint schools and Detroit schools know they can't touch Saginaw in basketball," Green said, after practice earlier this season. "It's something we take seriously. We're tough, we can score and we play defense."

Doing their part

According to basketball people around town, the basis for the Saginaw system is that so many of the guys and gals who make it big return as coaches, teachers and mentors, long after they leave for the top basketball programs in the nation. It happens so often that while there is a lot of celebration of Green's accomplishments around town these days, the commemoration comes with a bit of a shrug of the shoulders: They have seen this all before in Saginaw.

"Day-Day," as everyone calls Green, is merely the honored son of the city who is currently in the spotlight. And he is already part of the Saginaw system.

Early in a budding career, Green has already come back to teach the young.

"It's something I take seriously," Green said. "There was someone that always came back and taught me things."

Jason Richardson, the former Spartan and current player for the Phoenix Suns also does it. LaMarr Woodley, who starred in basketball and football at Saginaw High before playing linebacker at Michigan and for the Pittsburgh Steelers, finances a summer basketball tournament, in town. Darvin Ham, who played for the Pistons, also returns regularly to Saginaw to teach.

The list is a long one.

"I am a Buena Vista High alumnus," said Leslie Toole, the coach of the Ntume Jets, a girls AAU team in Saginaw. "At one time, Buena Vista needed a coach for the girls' team. So I did that."

Toole also runs a company called FarMar Media Services, which helps local athletes market themselves to recruiters.

"Lou Dawkins, the coach at Saginaw High, played at Saginaw High," Toole said. "He came back after college and came up through the system, did his turn at junior varsity under Coach Marshall Thomas, who had also taken his turn as the junior varsity coach at Saginaw High before he became the head coach. Greg McMath, the coach over at Arthur Hill. Even with the girls at Carrollton High, they've had several state championships girls over the years come back to coach those girls over there.

"Saginaw does a fantastic job of bringing its own back to help," he said. "And I don't know what it is. It's just that we're willing to bide our time to get into that position."

Dawkins coached Draymond Green at Saginaw High. Green called his old coach Tuesday to ask him to listen to a local sports talk radio program, on which Green appeared.

Green wanted an evaluation of how he did.

"That's my man," said Dawkins, who returned to Saginaw High after playing at Tulsa. "I love him to death. I've been in his life since he's been 10 or 11 years old."

Feeder program

That early involvement by coaches in the lives of middle school and even elementary school basketball players in Saginaw is an essential ingredient in producing a long line of successful players, including Dawkins; his older cousins, Paul and Willie, who had collegiate careers; Green's aunt, the former Saginaw High and Michigan State star Annette Babers; and some others, including Anthony Roberson, formerly of the University of Florida and the NBA; Ernie Thompson, formerly of Bradley University; Eugene Seals, formerly of Miami of Ohio; Tony Smith, formerly of UNLV; Dar Tucker, formerly of DePaul; Josh Southern, of Boston College; and Brad Redford, of Xavier.

"It's our feeder program," Dawkins said. "We actually have meetings with the coaches at the elementary and middle school level to try to teach what I need, here at Saginaw High School."

In that way, Dawkins knew about Green long before Day-Day averaged 30 points per game in middle school. He knew about Green when Day-Day was tested on the ultimate proving grounds for young players in Saginaw, the concrete courts in Veteran's Park, where Day-Day's name is now mentioned with the others among the pantheon.

"Vet's Memorial has built many a reputation in this area," said Toole, who is 46. "Going back before I even stepped on the courts, if you had game you went to Vet's Memorial.

"The two northern courts are where all of the ballers played," he said. "If you have a reputation you could get on those courts. If you didn't you had to play on the two southern courts. You have to be able to earn your way from south to north.

"People are always coming back, donating nets and so forth to keep that going up there."

The courts at Vet's Memorial were empty, this week. The action picks up there in the summertime, after schools let out.

But just yards from the courts is a monument, financed by some local businesses and the city, to Lawrence McKinney, who for nearly half a century busied himself coaching players, mentoring youths, sponsoring tournaments and distributing balls and nets so the game could be played around town.

Almost any ball player in Saginaw over the past two generations almost certainly ran into McKinney at some point. It is that kind of town -- pre-eminent among the many volunteers who are part of the system in Saginaw.

A half block away, on a driveway, a half dozen elementary school children played at a backboard, rim and net which was scaled down to their size.

"I want to go to Michigan State like Day-Day does," said Ladell Lenoir, 10. "I am going to try to go there, because my uncle went there, too."

As he shot around with his pals, Lenoir paused long enough to explain that he is currently playing AAU ball in Saginaw, for one of the most successful AAU programs in the country.

"We got like six games left," he said. "And, so far, we haven't lost any.

"There's a lot of ball in Saginaw. There's a lot of people trying to make something of themselves -- and don't want to end up on the street."

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

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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.