Blue Cross and Blue Shield of Ohio has been ordered through binding arbitration to pay $14.4 million to University Hospitals Health System for violating an agreement involving a jointly run business.
The Blues plan did not hold up its end of the deal, according to a 2-1 vote by a panel of the American Arbitration Association.
The claim by University Mednet, a physician group that is part of University Hospitals Health System, was heard by arbitrators as dictated by the original contract with the Blues.
"Legal counsel has received the ruling and is reviewing it," Blues spokesman Dave Buckel said last week.
The Blues plan, the state's largest health insurer, and University Mednet signed a 15-year agreement in 1985 to share the duties of operating an HMO.
Under the agreement, University Mednet's 115 doctors would provide medical care to HMO Health Ohio enrollees, and the Blues would manage the insurance and market HMO Health Ohio in eastern Cuyahoga County and Ashtabula, Geauga, Lake, Mahoning and Trumbull counties.
University Mednet said the Blues stopped promoting HMO Health Ohio in 1994, about the time it started its own HMO, Super Blue. The Blues also began steering HMO Health Ohio customers to Super Blue, University Mednet said.
HMO Health Ohio has 40,000 northeast Ohio enrollees, down from 68,000 in 1994. HMO Health Ohio had been expected to grow to more than 100,000 enrollees by 1999, said Dick Hammond, University Mednet's chief executive officer.
Jim McMonagle, general counsel for University Hospitals, said the health system was happy with the award but felt it should have been more.
Officials of University Mednet said HMO Health Ohio had suffered $18 million in damages from the Blues' actions. The company also sought punitive damages, which were not awarded.