A jawboning campaign by the Massachusetts Hospital Association has turned back the state's Blues plan's attempt to avoid paying $30 million into a free-care pool.
The reversal followed a three-week crescendo of opposition to a decision by Blue Cross and Blue Shield of Massachusetts to finance its newly imposed liability for uncompensated care by taking the full amount out of claims payments to hospitals.
The liability stemmed from a law passed last summer to spread the burden of annual contributions to a state-operated uncompensated-care pool. Justifying the law was the premise that the state's hospitals were getting stuck with the full $315 million cost of replenishing the pool each year and that $100 million of the cost should be assigned to payers.
But the law didn't specify how payers were to raise their shares. The Blues early last month told hospitals that 5% of their payments for care would be withheld and forwarded to the state to take care of the payer's pool bill (Dec. 8, 1997, p. 24).
Decrying the move, the MHA began a public campaign that produced a drumbeat of local news coverage amid admonitions by the law's authors, the governor's insurance aide and the state attorney general's office, among others.
All stopped short of declaring the Blues action illegal. For example, a letter to the Blues from the attorney general's public protection bureau only ventured that "a very credible argument can be made that (the Blues') actions do indeed violate the statute." But the bureau also said the insurer's stance "defies logic."
A few days later, more than 100 state legislators signed a letter to William Van Faasen, the Blues' chief executive officer, saying the Blues' decision "is certainly not within the spirit of what was championed as a cooperative effort" and is "inconsistent with the intent of the legislation."
In a letter to Sen. Mark Montigny, one of the law's sponsors, Van Faasen said the company will implement the law "in a manner consistent with the spirit intended." He said the turnabout was "in respectful response to the clear consensus of the community and the legislative intent."