Bon Secours Mercy Health sued Anthem Blue Cross Blue Shield on Monday, alleging that the insurer owes the health system nearly $100 million in unpaid, reduced and denied claims for patient care provided in Virginia.
According to the lawsuit, Anthem owes Bon Secours Mercy more than $73 million in unpaid claims for care delivered at its 10 Virginia hospitals and affiliated facilities, as well as more than $20 million in incorrectly reduced or denied claims. Bon Secours Mercy argues that this is an example of Anthem's alleged systemic strategy of shortchanging health systems by delaying, downgrading and denying treatment charges.
Cincinnati-based Bon Secours Mercy filed the suit in the Circuit Court of Henrico County. It seeks the damages of at least $93 million and an injunction that would stop “Anthem’s slow pay and systemic, unfair claims practices,” according to the suit.
“Anthem’s [special investigations unit] audits are a bad faith attempt to bludgeon BSMH Virginia into submission in the contract negotiations, as opposed to a good faith exercise of Anthem’s discretion,” the suit states.
Elevance Health, parent company of Anthem Blue Cross Blue Shield, disputed the allegations in a statement. "This is the latest tactic in their efforts to demand double-digit price increases from employers and individuals, in the middle of an active contract with Anthem," the company said.
According to the suit, Anthem allegedly modified its emergency visit pricing policy to downgrade emergency department treatment claims, made onerous requests for medical records through its special investigations unit, imposed a prepayment review for one Bon Secours Mercy hospital and removed a designation for several of the other hospitals in Virginia that recognizes facilities for providing high-quality, efficient care.
Bon Secours Mercy argues that the situation in Virginia represents similar billing and reimbursement issues in other states, contending that Anthem owes the system an outstanding claims balance of $85 million in Ohio and $6 million in Kentucky. Contract impasses in those states have led to tens of thousands Medicare and Medicaid beneficiaries losing their in-network status at Bon Secours Mercy facilities, according to the system, and that more patients in Virginia, Ohio and Kentucky may fall out of network by October if the standoff continues.
Bon Secours Mercy said in a statement that it has “exercised every possible non-legal option available to us for nearly four years to address this issue privately.”
Health systems and insurers are increasingly taking their contract disputes public as they debate appropriate reimbursement rates and billing practices. So far this year, 49 provider-payer contracting disputes have become public, said Adam Broder, a managing director at FTI Consulting, which has been tracking the growing number of contract standoffs. Only 20 public contract disputes were recorded through Aug. 30 of last year, he said.
Providers look to set multiyear contracts that account for higher-than-average labor and supply costs, looming Medicare reimbursement cuts and other financial pressures. Meanwhile, insurers seek to curb costs, in part, by downgrading or denying healthcare claims for treatment they deem was not necessary or not urgent. When providers and insurers fail to reach an agreement, patients often face higher costs when their preferred health systems are excluded from their health plan’s network.
Nineteen of the 49 contracting stalemates this year have led to out-of-network care, compared with nine from January through August 2022, Broder said.