Hospital Employees Want Accounting of Deal with Blue Cross

Employees of five Montana hospitals are concerned they may be overpaying for their health benefits

By Justin Franz

HELENA — Employees of five Montana hospitals are concerned they may be overpaying for their health benefits after learning the hospitals had six-year coverage agreements with Blue Cross Blue Shield of Montana in which the carrier paid the hospitals more than $20 million.

The employees filed a federal complaint in U.S. District Court in Great Falls on Dec. 29 seeking an accounting of payments to hospitals to find out if they were overcharged and whether the hospitals put the payments from Blue Cross toward the health plan or diverted the money for other uses, Lee Newspapers of Montana reported Thursday.

The complaint argues the hospitals entered into the long-term contract at such an excessive rate that Blue Cross was willing to pay “substantial sums” back to the hospitals in exchange for the contracts.

Blue Cross expected to more than recoup its $20 million over the terms of the contracts, the complaint argues.

Blue Cross declined to comment.

The employees said they learned about the agreement, which went into effect in January 2012, within the past year when they were told they couldn’t negotiate insurance benefits as part of their contracts.

However, the agreement was the subject of news coverage in 2011, when the hospitals controlled New West Health Services, the state’s second-largest private health insurer and a competitor of Blue Cross.

The hospitals sought to leave the health insurance business and transferred coverage of employees to Blue Cross.

“Due to the complexity of the transaction in a highly regulated industry, the federal District Court and Blue Cross Blue Shield were both involved in the transaction, and we have strictly complied with the terms of that agreement,” said Lauren Brendel, spokeswoman for Bozeman Health Deaconess Hospital. “We take financial stewardship and the well-being of our employees very seriously.”

Andrea Groom, spokeswoman at St. Peter’s Health in Helena, offered a similar response.

“It’s our understanding that the transaction that occurred as part of this transition did not result in any financial disadvantage to the employees who participated in our medical plan,” she said.

A spokesman for Billings Clinic said the hospital doesn’t comment on pending litigation. Officials with Northern Montana Hospital in Havre and Community Medical Center in Missoula did not immediately return phone calls or emails seeking comment on Thursday.

The hospitals have 21 days from being served with the complaint to respond.

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