Blue Cross and Blue Shield of Ohio went to court last week to stop the termination of its national Blues license, claiming its very corporate existence is at stake.
The Cleveland plan asked that the national Blue Cross and Blue Shield Association be forced to state publicly that it remains a member in good standing.
The association voted to oust the Ohio Blues because it agreed to sell most of its assets to Columbia/HCA Healthcare Corp., the giant for-profit hospital chain.
The plan said its subscribers were alarmed by a Sept. 30 letter from association Vice President Roger Wilson, which said its license automatically terminated Sept. 9.
The letter said no action would be taken to disconnect the plan from the national Blues system until after a court hearing scheduled for this week. But that didn't stop calls from worried customers and the news media, according to court documents filed by the Ohio Blues.
The Cleveland plan said the letter violated a "standstill agreement" the association signed in August.
"They said we have no license," plan President Kent Clapp testified in U.S. District Court in Cleveland. "The damage has been done. We need a remedy."
Judge Lesley Brooks Wells hadn't ruled on the request for a temporary restraining order as of late last week.
The plan challenged the basis for the automatic termination. The license agreements call for automatic termination if there is legal action calling for a trustee to oversee the plan's assets and if that action is not dismissed within 60 days. Ohio Attorney General Betty Montgomery asked for trusteeship in a lawsuit filed July 11.
However, the Ohio Blues argued that the provision only applies if a plan is insolvent. Montgomery's lawsuit sought to protect the plan's charitable assets.